Question 1

According to proponents of human capital theory,education:

Accepted Answer

A)  increases a worker's productivity. 
B)  identifies more productive workers for employers but does not directly increase productivity. 
C)  should result in all workers with college degrees earning more than all workers who hold only high school diplomas. 
D)  is an investment with primarily higher returns and lower risks than those available through investments in physical or financial capital. 
A)  increases a worker's productivity. 
B)  identifies more productive workers for employers but does not directly increase productivity. 
C)  should result in all workers with college degrees earning more than all workers who hold only high school diplomas. 
D)  is an investment with primarily higher returns and lower risks than those available through investments in physical or financial capital.

Question 2

The lack of job information for workers would be an example of what explanation for wage differentials among workers?

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 3

Which would decrease the demand for a particular type of labor?

Accepted Answer

A)  An increase in the demand for the products produced by that type of labor 
B)  An increase in the prices of the resources that are complements to that type of labor 
C)  A decrease in the prices of those resources that are complements for that type of labor 
D)  An increase in the wages of that type of labor 
A)  An increase in the demand for the products produced by that type of labor 
B)  An increase in the prices of the resources that are complements to that type of labor 
C)  A decrease in the prices of those resources that are complements for that type of labor 
D)  An increase in the wages of that type of labor

Question 4

A college graduate who works at a firm is also working part-time on a master's degree in business and expects to be paid a higher wage after earning the degree.The basic reason for this wage differential is:

Accepted Answer

A)  efficiency wages. 
B)  compensating differences. 
C)  investment in human capital. 
D)  nonmonetary aspects of work. 
A)  efficiency wages. 
B)  compensating differences. 
C)  investment in human capital. 
D)  nonmonetary aspects of work.

Question 5

The carpenters' union is an industrial union.

Accepted Answer

A) True 
 B)False

Question 6

Which is an example of a change in the price of another resource that increases labor demand?

Accepted Answer

A)  Software sales rise,thus increasing the demand for software developers. 
B)  Snowboarding increases in popularity,thus increasing the demand for the workers who make snowboards. 
C)  A decrease in the price of wood decreases the cost of furniture,thus increasing the demand for furniture workers. 
D)  A technological change increases output per worker in the computer industry,thus increasing the demand for computer workers. 
A)  Software sales rise,thus increasing the demand for software developers. 
B)  Snowboarding increases in popularity,thus increasing the demand for the workers who make snowboards. 
C)  A decrease in the price of wood decreases the cost of furniture,thus increasing the demand for furniture workers. 
D)  A technological change increases output per worker in the computer industry,thus increasing the demand for computer workers.

Question 7

The reason that the supply curve for labor in a purely competitive market rises is because:

Accepted Answer

A)  the wage rate paid to workers falls as more are hired. 
B)  the marginal product of labor falls as output increases. 
C)  marginal resource cost rises as productivity increases. 
D)  higher wages must be paid to bid workers away from other opportunities. 
A)  the wage rate paid to workers falls as more are hired. 
B)  the marginal product of labor falls as output increases. 
C)  marginal resource cost rises as productivity increases. 
D)  higher wages must be paid to bid workers away from other opportunities.

Question 8

Refer to the above graph.A monopsonist will set the wage at:

Accepted Answer

A)  Wy. 
B)  Wx. 
C)  Wz. 
D)  Cannot be determined. 
A)  Wy. 
B)  Wx. 
C)  Wz. 
D)  Cannot be determined.

Question 9

The major reason that presidents of major corporations receive an average salary of over $1 million a year and truck drivers receive an average salary of about $55,000 a year can best be explained by:

Accepted Answer

A)  discrimination. 
B)  lack of job information. 
C)  compensating differences. 
D)  noncompeting labor groups. 
A)  discrimination. 
B)  lack of job information. 
C)  compensating differences. 
D)  noncompeting labor groups.

Question 10

If the price of a product produced by an input decreases,the quantity demanded,but not demand,for the input will also decrease.

Accepted Answer

A) True 
 B)False

Question 11

If MRP < Wage rate,a firm should hire more workers.

Accepted Answer

A) True 
 B)False

Question 12

Equilibrium price differentials for productive resources:

Accepted Answer

A)  tend to be self-eliminating. 
B)  may be caused by differences in the quality of those resources. 
C)  are eliminated when the allocation of resources is in a state of equilibrium. 
D)  are unrelated to differences in nonmonetary benefits. 
A)  tend to be self-eliminating. 
B)  may be caused by differences in the quality of those resources. 
C)  are eliminated when the allocation of resources is in a state of equilibrium. 
D)  are unrelated to differences in nonmonetary benefits.

Question 13

Increased resource productivity will,ceteris paribus,increase a firm's demand for an input.

Accepted Answer

A) True 
 B)False

Question 14

Other things being equal,the elasticity of demand for labor will be greater the:

Accepted Answer

A)  smaller the proportion of total costs accountable for by labor costs. 
B)  smaller the elasticity of demand for the product it produces. 
C)  larger the number of close substitute resources available. 
D)  more rapid the decline in its marginal productivity. 
A)  smaller the proportion of total costs accountable for by labor costs. 
B)  smaller the elasticity of demand for the product it produces. 
C)  larger the number of close substitute resources available. 
D)  more rapid the decline in its marginal productivity.

Question 15

Craft unions typically attempt to increase wage rates for their members by:

Accepted Answer

A)  organizing all of the employees in a factory or industry. 
B)  opposing increases in the minimum wage that benefit nonunion workers. 
C)  supporting regulations and policies that increase the price of complementary resources. 
D)  restricting the supply of skilled workers through worker licensing and training requirements. 
A)  organizing all of the employees in a factory or industry. 
B)  opposing increases in the minimum wage that benefit nonunion workers. 
C)  supporting regulations and policies that increase the price of complementary resources. 
D)  restricting the supply of skilled workers through worker licensing and training requirements.

Question 16

If two resources are complementary,an increase in the price of one will increase the demand for the other.

Accepted Answer

A) True 
 B)False

Question 17

In monopsony situations,a minimum wage might increase wage and employment levels.

Accepted Answer

A) True 
 B)False

Question 18

Refer to the above graph.An inclusive union or an industrial union will set the wage rate at:

Accepted Answer

A)  Wy. 
B)  Wx. 
C)  Wz. 
D)  Cannot be determined. 
A)  Wy. 
B)  Wx. 
C)  Wz. 
D)  Cannot be determined.

Question 19

If all firms in an industry are price takers in the market for resource A,then:

Accepted Answer

A)  the price of resource A will increase if a single firm increases its output. 
B)  more efficient firms will produce at levels where the marginal revenue product of the last unit of resource A is higher. 
C)  less efficient firms will produce where the marginal revenue product of the last unit of resource A is higher. 
D)  the marginal product of the last unit of resource A will be the same in all firms in the industry. 
A)  the price of resource A will increase if a single firm increases its output. 
B)  more efficient firms will produce at levels where the marginal revenue product of the last unit of resource A is higher. 
C)  less efficient firms will produce where the marginal revenue product of the last unit of resource A is higher. 
D)  the marginal product of the last unit of resource A will be the same in all firms in the industry.

Question 20

Which would decrease a firm's demand for a particular resource?

Accepted Answer

A)  A decrease in the productivity of the resource 
B)  A decrease in the price of the particular resource 
C)  An increase in the demand for the firm's product 
D)  An increase in the price of the product the resource produces 
A)  A decrease in the productivity of the resource 
B)  A decrease in the price of the particular resource 
C)  An increase in the demand for the firm's product 
D)  An increase in the price of the product the resource produces

According to proponents of human capital theory,education:

The lack of job information for workers would be an example of what explanation for wage differentials among workers?

Which would decrease the demand for a particular type of labor?

A college graduate who works at a firm is also working part-time on a master's degree in business and expects to be paid a higher wage after earning the degree.The basic reason for this wage differential is:

The carpenters' union is an industrial union.

Which is an example of a change in the price of another resource that increases labor demand?

The reason that the supply curve for labor in a purely competitive market rises is because:

Refer to the above graph.A monopsonist will set the wage at:

The major reason that presidents of major corporations receive an average salary of over $1 million a year and truck drivers receive an average salary of about $55,000 a year can best be explained by:

If the price of a product produced by an input decreases,the quantity demanded,but not demand,for the input will also decrease.

If MRP < Wage rate,a firm should hire more workers.

Equilibrium price differentials for productive resources:

Increased resource productivity will,ceteris paribus,increase a firm's demand for an input.

Other things being equal,the elasticity of demand for labor will be greater the:

Craft unions typically attempt to increase wage rates for their members by:

If two resources are complementary,an increase in the price of one will increase the demand for the other.

In monopsony situations,a minimum wage might increase wage and employment levels.

Refer to the above graph.An inclusive union or an industrial union will set the wage rate at:

If all firms in an industry are price takers in the market for resource A,then:

Which would decrease a firm's demand for a particular resource?

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

According to proponents of human capital theory,education:

The lack of job information for workers would be an example of what explanation for wage differentials among workers?

Which would decrease the demand for a particular type of labor?

A college graduate who works at a firm is also working part-time on a master's degree in business and expects to be paid a higher wage after earning the degree.The basic reason for this wage differential is:

The carpenters' union is an industrial union.

Which is an example of a change in the price of another resource that increases labor demand?

The reason that the supply curve for labor in a purely competitive market rises is because:

Refer to the above graph.A monopsonist will set the wage at:

The major reason that presidents of major corporations receive an average salary of over $1 million a year and truck drivers receive an average salary of about $55,000 a year can best be explained by:

If the price of a product produced by an input decreases,the quantity demanded,but not demand,for the input will also decrease.

If MRP < Wage rate,a firm should hire more workers.

Equilibrium price differentials for productive resources:

Increased resource productivity will,ceteris paribus,increase a firm's demand for an input.

Other things being equal,the elasticity of demand for labor will be greater the:

Craft unions typically attempt to increase wage rates for their members by:

If two resources are complementary,an increase in the price of one will increase the demand for the other.

In monopsony situations,a minimum wage might increase wage and employment levels.

Refer to the above graph.An inclusive union or an industrial union will set the wage rate at:

If all firms in an industry are price takers in the market for resource A,then:

Which would decrease a firm's demand for a particular resource?

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