Question 1

Mauna decides that worker turnover is too high at her firm.She hopes that by paying above-market wages,workers will stay longer.This may create

Accepted Answer

A)  a surplus of workers. 
B)  a surplus of jobs. 
C)  a shortage of workers. 
D)  a shortage of overtime. 
E)  no disequilibrium. 
A)  a surplus of workers. 
B)  a surplus of jobs. 
C)  a shortage of workers. 
D)  a shortage of overtime. 
E)  no disequilibrium. A

Question 2

Labor supply in the purchasing profession can be represented by the equation LS = 10 + W,whereas labor demand can be depicted as LD = 40 - 4W.
a.What is the equilibrium number of workers hired and their wage in this profession?
b.Workers see that the number of good positions in other professions is shrinking,so they shift into the purchasing profession,causing labor supply to be two times what it used to be.What is the equilibrium number of workers hired now? What wage do they earn?
c.When will workers stop changing professions? Or will this process continue indefinitely?

Accepted Answer

a.First,set the labor supply and demand equations equal to each other to find the equilibrium wage:
10 + W = 40 - 4W
W = 6.Use W = $6 in either the labor supply or demand equations to find L*.Because this wage is equilibrium wage,labor supply is equal to labor demand and either equation produces the same L*:
L_S = 10 + 6 = 16 workers = L*
b.The new labor supply equation is L_s = 20 + 2W.Recalculating W* gives us:
20 + 2W = 40 - 4W
W = $3.33 and L* becomes:
L_S = 20 + 2*3.33 = 26.67 workers = L*.
c.Workers have an incentive to move into the purchasing field as long as its wages and benefits are higher than their options elsewhere.When wages have equalized,there is no reason to move to a different job,so the number of incoming purchasers will stabilize.

Question 3

The substitution effect describes the

Accepted Answer

A)  incentive to work more when the wage rises. 
B)  incentive to work less when the wage rises. 
C)  decision whether to work more or less. 
D)  decision whether to join the labor force. 
E)  incentive to change jobs. 
A)  incentive to work more when the wage rises. 
B)  incentive to work less when the wage rises. 
C)  decision whether to work more or less. 
D)  decision whether to join the labor force. 
E)  incentive to change jobs. A

Question 4

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.
  
-If the wage of the fifth worker is $20 and his or her value of the marginal product of labor is $25,the firm

Accepted Answer

A)  benefits by stopping at this level of labor. 
B)  is likely to fire the fifth worker. 
C)  asks this fifth worker to work overtime. 
D)  is likely to benefit by hiring more workers. 
E)  is likely to lose profit by hiring more workers. 
A)  benefits by stopping at this level of labor. 
B)  is likely to fire the fifth worker. 
C)  asks this fifth worker to work overtime. 
D)  is likely to benefit by hiring more workers. 
E)  is likely to lose profit by hiring more workers.

Question 5

Refer to the following graphs to answer the following questions:
A.   
B. 
C.  
D. 
E. 
-Which graph shows the substitution effect dominating the income effect of higher wages?

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E 
A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 6

Use the following table to answer the following questions:
  
-What is the value that belongs in cell D6?

Accepted Answer

A)  $50 
B)  $100 
C)  $150 
D)  $200 
E)  $300 
A)  $50 
B)  $100 
C)  $150 
D)  $200 
E)  $300

Question 7

When their wages rise,Raymond works more and Brandi works less.We can infer that Raymond values income ________ than Brandi.

Accepted Answer

A)  less 
B)  the same 
C)  more 
D)  half as much 
E)  a third more 
A)  less 
B)  the same 
C)  more 
D)  half as much 
E)  a third more

Question 8

Which of the following situations describes a monopsony?

Accepted Answer

A)  Nicolette is an ice cream artist and several shops are hiring. 
B)  Francine is the only teleport technician in the world. 
C)  Fernando is an accountant in New York City. 
D)  Leslie is a college instructor and there is only one university within 300 miles of her permanent residence. 
E)  Leo is the only professional dog groomer in town. 
A)  Nicolette is an ice cream artist and several shops are hiring. 
B)  Francine is the only teleport technician in the world. 
C)  Fernando is an accountant in New York City. 
D)  Leslie is a college instructor and there is only one university within 300 miles of her permanent residence. 
E)  Leo is the only professional dog groomer in town.

Question 9

Refer to the following table to answer the following questions: 
 
-If the price of output is $5,the value of the marginal product of labor of the third worker is

Accepted Answer

A)  $8. 
B)  $30. 
C)  $40. 
D)  $38. 
E)  $190. 
A)  $8. 
B)  $30. 
C)  $40. 
D)  $38. 
E)  $190.

Question 10

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.
  
-If 80 workers are hired,you know that the wage rate must be

Accepted Answer

A)  $25. 
B)  $20. 
C)  $15. 
D)  $10. 
E)  $5. 
A)  $25. 
B)  $20. 
C)  $15. 
D)  $10. 
E)  $5.

Question 11

Use the following table to answer the following questions:
  
-What is the marginal product of the second worker?

Accepted Answer

A)  9 units 
B)  8 units 
C)  10 units 
D)  7 units 
E)  18 units 
A)  9 units 
B)  8 units 
C)  10 units 
D)  7 units 
E)  18 units

Question 12

Refer to the following table to answer the following questions: 
 
-If the price of output falls from $5 to $2,the value of the marginal product of labor of all workers

Accepted Answer

A)  increases. 
B)  remains unchanged. 
C)  increases at an increasing rate. 
D)  decreases at an increasing rate. 
E)  decreases. 
A)  increases. 
B)  remains unchanged. 
C)  increases at an increasing rate. 
D)  decreases at an increasing rate. 
E)  decreases.

Question 13

Use the following table to answer the following questions:
  
-What is the value that belongs in cell D4?

Accepted Answer

A)  $600 
B)  $500 
C)  $150 
D)  $450 
E)  $300 
A)  $600 
B)  $500 
C)  $150 
D)  $450 
E)  $300

Question 14

Bobby knows that she is producing a value just equal to her wage.If the price of what she makes falls,Bobby knows that she

Accepted Answer

A)  will be able to keep her job. 
B)  is likely to work overtime. 
C)  will work less. 
D)  is likely to be fired. 
E)  will not be able to find work anywhere. 
A)  will be able to keep her job. 
B)  is likely to work overtime. 
C)  will work less. 
D)  is likely to be fired. 
E)  will not be able to find work anywhere.

Question 15

No matter how high his wage rises,Johann will always work more.His labor supply curve is

Accepted Answer

A)  downward-sloping. 
B)  horizontal. 
C)  vertical. 
D)  upward-sloping. 
E)  upward-sloping at an increasing rate. 
A)  downward-sloping. 
B)  horizontal. 
C)  vertical. 
D)  upward-sloping. 
E)  upward-sloping at an increasing rate.

Question 16

Which of the following would increase the demand for labor?

Accepted Answer

A)  a decrease in the product price 
B)  a decrease in the product price and a labor-saving machine acquisition 
C)  an increase in the product price 
D)  an increase in the product price and a labor-enhancing machine acquisition 
E)  a decrease in the product price,an increase in the product price,and a labor-saving machine acquisition 
A)  a decrease in the product price 
B)  a decrease in the product price and a labor-saving machine acquisition 
C)  an increase in the product price 
D)  an increase in the product price and a labor-enhancing machine acquisition 
E)  a decrease in the product price,an increase in the product price,and a labor-saving machine acquisition

Question 17

Rowan is deciding whether to pick up more hours at work or to take a vacation.This decision best describes

Accepted Answer

A)  her hours decision. 
B)  her labor force participation decision. 
C)  the value she places on income. 
D)  the labor-leisure trade-off. 
E)  the necessity of income. 
A)  her hours decision. 
B)  her labor force participation decision. 
C)  the value she places on income. 
D)  the labor-leisure trade-off. 
E)  the necessity of income.

Question 18

Refer to the following figure to answer the following questions:
  
-If the price of the product is $30,then what is the value of the marginal product of labor (VMPL)of the third worker?

Accepted Answer

A)  $60 
B)  $120 
C)  $420 
D)  $30 
E)  $240 
A)  $60 
B)  $120 
C)  $420 
D)  $30 
E)  $240

Question 19

The diminishing marginal product of labor exists when the last worker hired produces ________ the previous worker.

Accepted Answer

A)  more output than 
B)  more value than 
C)  less value than 
D)  the same amount of output as 
E)  the same amount of value as 
A)  more output than 
B)  more value than 
C)  less value than 
D)  the same amount of output as 
E)  the same amount of value as

Question 20

Talia just applied for a position with Rory's firm.Rory knows that Talia will earn $20 an hour and can produce a value of the marginal product of labor (VMPL)of $40.Rory will ________ Talia because her VMPL is ________.

Accepted Answer

A)  hire; positive 
B)  not hire; positive 
C)  hire; negative 
D)  not hire; negative 
E)  possibly hire; positive 
A)  hire; positive 
B)  not hire; positive 
C)  hire; negative 
D)  not hire; negative 
E)  possibly hire; positive

Mauna decides that worker turnover is too high at her firm.She hopes that by paying above-market wages,workers will stay longer.This may create

The substitution effect describes the

Refer to the following graphs to answer the following questions: A. B.11efbc7a_aae2_b1ce_a154_5b2bc6d63cd5_TB4871_00 C. D. E. -Which graph shows the substitution effect dominating the income effect of higher wages?

Use the following table to answer the following questions: -What is the value that belongs in cell D6?

When their wages rise,Raymond works more and Brandi works less.We can infer that Raymond values income ________ than Brandi.

Which of the following situations describes a monopsony?

Refer to the following table to answer the following questions: -If the price of output is $5,the value of the marginal product of labor of the third worker is

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10. -If 80 workers are hired,you know that the wage rate must be

Use the following table to answer the following questions: -What is the marginal product of the second worker?

Refer to the following table to answer the following questions: -If the price of output falls from $5 to $2,the value of the marginal product of labor of all workers

Use the following table to answer the following questions: -What is the value that belongs in cell D4?

Bobby knows that she is producing a value just equal to her wage.If the price of what she makes falls,Bobby knows that she

No matter how high his wage rises,Johann will always work more.His labor supply curve is

Which of the following would increase the demand for labor?

Rowan is deciding whether to pick up more hours at work or to take a vacation.This decision best describes

Refer to the following figure to answer the following questions: -If the price of the product is $30,then what is the value of the marginal product of labor (VMPL)of the third worker?

The diminishing marginal product of labor exists when the last worker hired produces ________ the previous worker.

Talia just applied for a position with Rory's firm.Rory knows that Talia will earn $20 an hour and can produce a value of the marginal product of labor (VMPL)of $40.Rory will Talia because her VMPL is .

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters

Exam 14: The Demand and Supply of Resources

Mauna decides that worker turnover is too high at her firm.She hopes that by paying above-market wages,workers will stay longer.This may create

The substitution effect describes the

Refer to the following graphs to answer the following questions: A. B.11efbc7a_aae2_b1ce_a154_5b2bc6d63cd5_TB4871_00 C. D. E. -Which graph shows the substitution effect dominating the income effect of higher wages?

Use the following table to answer the following questions: -What is the value that belongs in cell D6?

When their wages rise,Raymond works more and Brandi works less.We can infer that Raymond values income ________ than Brandi.

Which of the following situations describes a monopsony?

Refer to the following table to answer the following questions: -If the price of output is $5,the value of the marginal product of labor of the third worker is

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10. -If 80 workers are hired,you know that the wage rate must be

Use the following table to answer the following questions: -What is the marginal product of the second worker?

Refer to the following table to answer the following questions: -If the price of output falls from $5 to $2,the value of the marginal product of labor of all workers

Use the following table to answer the following questions: -What is the value that belongs in cell D4?

Bobby knows that she is producing a value just equal to her wage.If the price of what she makes falls,Bobby knows that she

No matter how high his wage rises,Johann will always work more.His labor supply curve is

Which of the following would increase the demand for labor?

Rowan is deciding whether to pick up more hours at work or to take a vacation.This decision best describes

Refer to the following figure to answer the following questions: -If the price of the product is $30,then what is the value of the marginal product of labor (VMPL)of the third worker?

The diminishing marginal product of labor exists when the last worker hired produces ________ the previous worker.

Talia just applied for a position with Rory's firm.Rory knows that Talia will earn $20 an hour and can produce a value of the marginal product of labor (VMPL)of $40.Rory will ________ Talia because her VMPL is ________.

Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Market Outcomes and Tax Incidence

Price Controls

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income,inequality,and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

International Trade

Filters

Talia just applied for a position with Rory's firm.Rory knows that Talia will earn $20 an hour and can produce a value of the marginal product of labor (VMPL)of $40.Rory will Talia because her VMPL is .