Question 1

A monopsonist in equilibrium will hire labor at a level where MRP = MRC > W.

Accepted Answer

A) True 
 B)False  True

Question 2

The best example of a craft union would be the:

Accepted Answer

A)  United Auto Workers. 
B)  United Steelworkers. 
C)  Teamsters. 
D)  International Brotherhood of Electrical Workers. 
A)  United Auto Workers. 
B)  United Steelworkers. 
C)  Teamsters. 
D)  International Brotherhood of Electrical Workers. D

Question 3

The marginal revenue product curve for an input is downward sloping because of the law of diminishing returns.

Accepted Answer

A) True 
 B)False  True

Question 4

Other things being equal,which would tend to increase the mobility of labor?

Accepted Answer

A)  A reduction in job information services 
B)  Fewer opportunities for job training 
C)  A reduction in discrimination at work 
D)  Increased licensing requirements by occupational groups 
A)  A reduction in job information services 
B)  Fewer opportunities for job training 
C)  A reduction in discrimination at work 
D)  Increased licensing requirements by occupational groups

Question 5

Critics of the minimum wage argue that an increase in the minimum wage rate above the equilibrium rate of a purely competitive labor market would:

Accepted Answer

A)  increase unemployment in the labor market. 
B)  increase firms' demand for labor. 
C)  decrease the supply of labor. 
D)  cause firms to substitute labor for capital. 
A)  increase unemployment in the labor market. 
B)  increase firms' demand for labor. 
C)  decrease the supply of labor. 
D)  cause firms to substitute labor for capital.

Question 6

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits.It is currently operating in the elastic range of its MRP curve.If the wage rate increases,its total spending on wages at the new equilibrium will:

Accepted Answer

A)  be larger. 
B)  be smaller. 
C)  be unchanged. 
D)  change,but it is impossible to determine the direction. 
A)  be larger. 
B)  be smaller. 
C)  be unchanged. 
D)  change,but it is impossible to determine the direction.

Question 7

The wages of plumbers are likely to increase when:

Accepted Answer

A)  licensing standards for the occupation are increased. 
B)  there is an increase in the cost of plumbing supplies. 
C)  the length of the training period for plumbers is decreased. 
D)  more do-it-yourself home improvement centers open across the nation. 
A)  licensing standards for the occupation are increased. 
B)  there is an increase in the cost of plumbing supplies. 
C)  the length of the training period for plumbers is decreased. 
D)  more do-it-yourself home improvement centers open across the nation.

Question 8

The marginal revenue product of labor in a competitive market decreases as a firm increases the quantity of labor used because of the:

Accepted Answer

A)  law of diminishing returns. 
B)  law of diminishing marginal utility. 
C)  homogeneity of the product. 
D)  free mobility of resources. 
A)  law of diminishing returns. 
B)  law of diminishing marginal utility. 
C)  homogeneity of the product. 
D)  free mobility of resources.

Question 9

If a minimum wage is set at W,what will happen to employment in the monopsonistic labor market shown in the diagram above?

Accepted Answer

A)  Employment will decrease. 
B)  Employment will increase. 
C)  Employment will stay the same. 
D)  Employment may increase but usually it tends to stay the same. 
A)  Employment will decrease. 
B)  Employment will increase. 
C)  Employment will stay the same. 
D)  Employment may increase but usually it tends to stay the same.

Question 10

The elasticity of demand for labor varies inversely with the elasticity of demand for the product it is used to produce.

Accepted Answer

A) True 
 B)False

Question 11

Refer to the above graph,which shows the supply and demand for unionized manufacturing workers.The initial equilibrium point is point 1.There is an increase in the demand for manufactured goods while at the same time health benefits for unionized manufacturing workers also increase.Which point would represent the new equilibrium?

Accepted Answer

A)  3 
B)  4 
C)  5 
D)  6 
A)  3 
B)  4 
C)  5 
D)  6

Question 12

What reason for wage differentials would best explain why superstar athletes in a professional sport are paid significantly more than regular athletes?

Accepted Answer

A)  Noncompeting groups 
B)  Compensating differences 
C)  Market imperfections 
D)  Principal-agent problems 
A)  Noncompeting groups 
B)  Compensating differences 
C)  Market imperfections 
D)  Principal-agent problems

Question 13

Refer to the above graph.It shows a firm that buys its inputs and sells its output in competitive markets.If the firm develops a new technology that increases labor productivity,the equilibrium level of employment for this firm is expected to be:

Accepted Answer

A)  L0. 
B)  zero. 
C)  lower than L0. 
D)  higher than L0. 
A)  L0. 
B)  zero. 
C)  lower than L0. 
D)  higher than L0.

Question 14

Immobile resources contribute to wage differentials.

Accepted Answer

A) True 
 B)False

Question 15

A craft union:

Accepted Answer

A)  creates a bilateral monopoly of unskilled and skilled workers in an industry. 
B)  organizes workers who have similar skills or jobs in an industry. 
C)  is most concerned with increasing the supply for workers. 
D)  is most effective in a purely competitive industry. 
A)  creates a bilateral monopoly of unskilled and skilled workers in an industry. 
B)  organizes workers who have similar skills or jobs in an industry. 
C)  is most concerned with increasing the supply for workers. 
D)  is most effective in a purely competitive industry.

Question 16

In percentage terms,which occupation is expected to be the fastest growing from 2008 to 2018?

Accepted Answer

A)  Photographic processing machine operators 
B)  Sewing machine operators 
C)  Home health aides 
D)  Biomedical engineers 
A)  Photographic processing machine operators 
B)  Sewing machine operators 
C)  Home health aides 
D)  Biomedical engineers

Question 17

A firm has a single wage rate.At present 10 workers are employed at $50 per day.Wages are raised to $55 per day to attract an extra worker.The marginal labor cost per day is:

Accepted Answer

A)  $5. 
B)  $10. 
C)  $55. 
D)  $105.
The 11th worker costs $55,but all 10 other workers require a $5 increase in wage.Thus,the total increase is $105. 
A)  $5. 
B)  $10. 
C)  $55. 
D)  $105.
The 11th worker costs $55,but all 10 other workers require a $5 increase in wage.Thus,the total increase is $105.

Question 18

Critics of the minimum wage contend that imposing a wage higher than the equilibrium wage in a competitive industry would:

Accepted Answer

A)  decrease the number of workers employed in that industry. 
B)  decrease the quantity of labor supplied to that industry. 
C)  increase the demand for labor in the industry. 
D)  increase employment in that industry. 
A)  decrease the number of workers employed in that industry. 
B)  decrease the quantity of labor supplied to that industry. 
C)  increase the demand for labor in the industry. 
D)  increase employment in that industry.

Question 19

Occupational licensing is a means of decreasing the supply of specific kinds of labor.

Accepted Answer

A) True 
 B)False

Question 20

Minimum wage laws have contributed to higher unemployment levels among teenagers and minorities.

Accepted Answer

A) True 
 B)False

A monopsonist in equilibrium will hire labor at a level where MRP = MRC > W.

The best example of a craft union would be the:

The marginal revenue product curve for an input is downward sloping because of the law of diminishing returns.

Other things being equal,which would tend to increase the mobility of labor?

Critics of the minimum wage argue that an increase in the minimum wage rate above the equilibrium rate of a purely competitive labor market would:

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits.It is currently operating in the elastic range of its MRP curve.If the wage rate increases,its total spending on wages at the new equilibrium will:

The wages of plumbers are likely to increase when:

The marginal revenue product of labor in a competitive market decreases as a firm increases the quantity of labor used because of the:

If a minimum wage is set at W,what will happen to employment in the monopsonistic labor market shown in the diagram above?

The elasticity of demand for labor varies inversely with the elasticity of demand for the product it is used to produce.

What reason for wage differentials would best explain why superstar athletes in a professional sport are paid significantly more than regular athletes?

Refer to the above graph.It shows a firm that buys its inputs and sells its output in competitive markets.If the firm develops a new technology that increases labor productivity,the equilibrium level of employment for this firm is expected to be:

Immobile resources contribute to wage differentials.

A craft union:

In percentage terms,which occupation is expected to be the fastest growing from 2008 to 2018?

A firm has a single wage rate.At present 10 workers are employed at $50 per day.Wages are raised to $55 per day to attract an extra worker.The marginal labor cost per day is:

Critics of the minimum wage contend that imposing a wage higher than the equilibrium wage in a competitive industry would:

Occupational licensing is a means of decreasing the supply of specific kinds of labor.

Minimum wage laws have contributed to higher unemployment levels among teenagers and minorities.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Elasticity of Demand and Supply

Market Failures: Public Goods and Externalities

Businesses and Their Costs

Pure Competition

Pure Monopoly

Monopolistic Competition and Oligopoly

Income Inequality and Poverty

Public Finance: Expenditures and Taxes

International Trade and Exchange Rates

Filters

Exam 10: Wage Determination

A monopsonist in equilibrium will hire labor at a level where MRP = MRC > W.

The best example of a craft union would be the:

The marginal revenue product curve for an input is downward sloping because of the law of diminishing returns.

Other things being equal,which would tend to increase the mobility of labor?

Critics of the minimum wage argue that an increase in the minimum wage rate above the equilibrium rate of a purely competitive labor market would:

A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits.It is currently operating in the elastic range of its MRP curve.If the wage rate increases,its total spending on wages at the new equilibrium will:

The wages of plumbers are likely to increase when:

The marginal revenue product of labor in a competitive market decreases as a firm increases the quantity of labor used because of the:

If a minimum wage is set at W,what will happen to employment in the monopsonistic labor market shown in the diagram above?

The elasticity of demand for labor varies inversely with the elasticity of demand for the product it is used to produce.

What reason for wage differentials would best explain why superstar athletes in a professional sport are paid significantly more than regular athletes?

Refer to the above graph.It shows a firm that buys its inputs and sells its output in competitive markets.If the firm develops a new technology that increases labor productivity,the equilibrium level of employment for this firm is expected to be:

Immobile resources contribute to wage differentials.

A craft union:

In percentage terms,which occupation is expected to be the fastest growing from 2008 to 2018?

A firm has a single wage rate.At present 10 workers are employed at $50 per day.Wages are raised to $55 per day to attract an extra worker.The marginal labor cost per day is:

Critics of the minimum wage contend that imposing a wage higher than the equilibrium wage in a competitive industry would:

Occupational licensing is a means of decreasing the supply of specific kinds of labor.

Minimum wage laws have contributed to higher unemployment levels among teenagers and minorities.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Elasticity of Demand and Supply

Market Failures: Public Goods and Externalities

Businesses and Their Costs

Pure Competition

Pure Monopoly

Monopolistic Competition and Oligopoly

Income Inequality and Poverty

Public Finance: Expenditures and Taxes

International Trade and Exchange Rates

Filters