Question 1

A characteristic of a purely competitive labor market would be:

Accepted Answer

A)  many firms competing in hiring workers. 
B)  firms hiring different types of labor. 
C)  wage-maker behavior by the firms. 
D)  price-maker behavior by the firms. 
A)  many firms competing in hiring workers. 
B)  firms hiring different types of labor. 
C)  wage-maker behavior by the firms. 
D)  price-maker behavior by the firms.

Question 2

Other things being equal,if a formerly competitive firm attains a high degree of monopoly power,its resource demand curve will:

Accepted Answer

A)  become perfectly inelastic. 
B)  remain perfectly elastic. 
C)  become more elastic. 
D)  become more inelastic. 
A)  become perfectly inelastic. 
B)  remain perfectly elastic. 
C)  become more elastic. 
D)  become more inelastic.

Question 3

If the supply of labor in a purely competitive labor market increases,the labor:

Accepted Answer

A)  supply curve for a single employer will shift downward. 
B)  supply curve for a single employer will shift upward. 
C)  demand curve for a single employer will shift upward. 
D)  demand curve for a single employer will shift downward. 
A)  supply curve for a single employer will shift downward. 
B)  supply curve for a single employer will shift upward. 
C)  demand curve for a single employer will shift upward. 
D)  demand curve for a single employer will shift downward.

Question 4

An example of derived demand is the demand for:

Accepted Answer

A)  housing by consumers. 
B)  machines by businesses. 
C)  paper products by households. 
D)  agricultural products by foreign consumers. 
A)  housing by consumers. 
B)  machines by businesses. 
C)  paper products by households. 
D)  agricultural products by foreign consumers.

Question 5

In a purely competitive industry,which of the following could cause a firm's marginal revenue product for an economic resource to increase?

Accepted Answer

A)  An increase in demand for the firm's product 
B)  A reduction in the price of the resource 
C)  An increase in the elasticity of the firm's supply curve 
D)  A decrease in the price of the product produced by the resource 
A)  An increase in demand for the firm's product 
B)  A reduction in the price of the resource 
C)  An increase in the elasticity of the firm's supply curve 
D)  A decrease in the price of the product produced by the resource

Question 6

The best example of an industrial union is the:

Accepted Answer

A)  United Association of Plumbers and Pipefitters. 
B)  International Brotherhood of Electrical Workers. 
C)  American Medical Association. 
D)  United Auto Workers. 
A)  United Association of Plumbers and Pipefitters. 
B)  International Brotherhood of Electrical Workers. 
C)  American Medical Association. 
D)  United Auto Workers.

Question 7

Which is an example of a change in productivity that decreases labor demand?

Accepted Answer

A)  A financial crisis in Asian nations reduces the demand for exports to Asia,thus decreasing the demand for domestic workers in the computer industry. 
B)  Tattoos fade in popularity,thus decreasing the demand for tattoo artists. 
C)  More government regulation decreases output per worker in the fast food industry,thus decreasing demand for fast food workers. 
D)  An increase in the price of construction equipment reduces the demand for construction equipment operators. 
A)  A financial crisis in Asian nations reduces the demand for exports to Asia,thus decreasing the demand for domestic workers in the computer industry. 
B)  Tattoos fade in popularity,thus decreasing the demand for tattoo artists. 
C)  More government regulation decreases output per worker in the fast food industry,thus decreasing demand for fast food workers. 
D)  An increase in the price of construction equipment reduces the demand for construction equipment operators.

Question 8

Refer to the above graph.What will shift D1 to D2?

Accepted Answer

A)  An increase in the price of a substitute input (if the output effect is greater than the substitution effect) 
B)  An increase in the price of a substitute input (if the substitution effect is greater than the output effect) 
C)  A decrease in the price of a substitute input (if the substitution effect is greater than the output effect) 
D)  An increase in the price of a complementary resource 
A)  An increase in the price of a substitute input (if the output effect is greater than the substitution effect) 
B)  An increase in the price of a substitute input (if the substitution effect is greater than the output effect) 
C)  A decrease in the price of a substitute input (if the substitution effect is greater than the output effect) 
D)  An increase in the price of a complementary resource

Question 9

The strength of labor demand and the rightward position of the labor demand curve differ greatly among occupations due to differences in how much various occupational groups contribute to their firm's revenue.

Accepted Answer

A) True 
 B)False

Question 10

An increase in the price of aluminum increases the cost of producing aluminum products and reduces the demand for aluminum workers.This decrease in labor demand would be caused by which change in a determinant of labor demand?

Accepted Answer

A)  A fall in labor productivity 
B)  An increase in product demand 
C)  A decrease in product demand 
D)  An increase in the price of another resource 
A)  A fall in labor productivity 
B)  An increase in product demand 
C)  A decrease in product demand 
D)  An increase in the price of another resource

Question 11

Marginal revenue product describes the:

Accepted Answer

A)  output produced by the last unit of input employed. 
B)  revenue received for the last unit of output produced. 
C)  price a consumer paid for the last unit of output produced. 
D)  revenue received for the output produced by the last unit of labor employed. 
A)  output produced by the last unit of input employed. 
B)  revenue received for the last unit of output produced. 
C)  price a consumer paid for the last unit of output produced. 
D)  revenue received for the output produced by the last unit of labor employed.

Question 12

In firm X,labor costs are 85 percent of production costs,while in firm Y labor costs are 40 percent of production costs.A 20 percent increase in wages would increase production costs by:

Accepted Answer

A)  23 percent in firm X and 20 percent in firm Y. 
B)  19 percent in firm X and 15 percent in firm Y. 
C)  15 percent in firm X and 6 percent in firm Y. 
D)  17 percent in firm X and 8 percent in firm Y.
In firm X,production costs would increase by 0.85 * 0.2= 0.17 (i.e. ,17 percent),whereas in firm Y production costs would increase by 0.4 * 0.2 = 0.08 (i.e. ,8 percent). 
A)  23 percent in firm X and 20 percent in firm Y. 
B)  19 percent in firm X and 15 percent in firm Y. 
C)  15 percent in firm X and 6 percent in firm Y. 
D)  17 percent in firm X and 8 percent in firm Y.
In firm X,production costs would increase by 0.85 * 0.2= 0.17 (i.e. ,17 percent),whereas in firm Y production costs would increase by 0.4 * 0.2 = 0.08 (i.e. ,8 percent).

Question 13

Derived demand is the demand:

Accepted Answer

A)  that arises because of monopoly control of resources in a market. 
B)  for a product based on the tastes and preferences of consumers. 
C)  derived from consumer satisfaction with a product. 
D)  for a resource to produce a product. 
A)  that arises because of monopoly control of resources in a market. 
B)  for a product based on the tastes and preferences of consumers. 
C)  derived from consumer satisfaction with a product. 
D)  for a resource to produce a product.

Question 14

A firm would be likely to lay off workers following:

Accepted Answer

A)  an increase in the demand for labor. 
B)  an increase in the marginal revenue product of labor. 
C)  the imposition of a new minimum wage below the current equilibrium wage. 
D)  a successful attempt by an industrial union to push wages above the marginal revenue product of labor. 
A)  an increase in the demand for labor. 
B)  an increase in the marginal revenue product of labor. 
C)  the imposition of a new minimum wage below the current equilibrium wage. 
D)  a successful attempt by an industrial union to push wages above the marginal revenue product of labor.

Question 15

A union composed of all workers in a given plant or industry is called a(n):

Accepted Answer

A)  closed shop. 
B)  craft union. 
C)  monopsony union. 
D)  industrial union. 
A)  closed shop. 
B)  craft union. 
C)  monopsony union. 
D)  industrial union.

Question 16

What will the elasticity of resource demand be if unit wages rise by 5 percent and the number of employed workers falls by 12 percent?

Accepted Answer

A)  0.42 
B)  1.60 
C)  2.40 
D)  6.00
Elasticity of resource demand is the absolute value of the percentage change in quantity of workers divided by the percentage change in resource price.In this case,elasticity is |-0.12/0.05| = 2.40. 
A)  0.42 
B)  1.60 
C)  2.40 
D)  6.00
Elasticity of resource demand is the absolute value of the percentage change in quantity of workers divided by the percentage change in resource price.In this case,elasticity is |-0.12/0.05| = 2.40.

Question 17

Refer to the above graph.If a monopsonist bargains with an inclusive union,as shown,the wage rate will be:

Accepted Answer

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

Question 18

A characteristic of a purely competitive labor market would be:

Accepted Answer

A)  "price-maker" behavior by the firms. 
B)  "wage-taker" behavior by workers. 
C)  a few firms competing for labor services. 
D)  significant differences among workers in the level of work skills. 
A)  "price-maker" behavior by the firms. 
B)  "wage-taker" behavior by workers. 
C)  a few firms competing for labor services. 
D)  significant differences among workers in the level of work skills.

Question 19

Which action taken by a worker would not be an investment in human capital?

Accepted Answer

A)  Enrolling in college 
B)  Enrolling in trade school 
C)  Purchasing exercise equipment 
D)  Purchasing stock in a pharmaceutical company 
A)  Enrolling in college 
B)  Enrolling in trade school 
C)  Purchasing exercise equipment 
D)  Purchasing stock in a pharmaceutical company

Question 20

If the price of a good increases,then in the market for labor that is used to make this product:

Accepted Answer

A)  employment will decrease. 
B)  the labor supply will increase. 
C)  the marginal product (MP)of labor will increase. 
D)  the marginal revenue product (MRP)of labor will increase. 
A)  employment will decrease. 
B)  the labor supply will increase. 
C)  the marginal product (MP)of labor will increase. 
D)  the marginal revenue product (MRP)of labor will increase.

A characteristic of a purely competitive labor market would be:

Other things being equal,if a formerly competitive firm attains a high degree of monopoly power,its resource demand curve will:

If the supply of labor in a purely competitive labor market increases,the labor:

An example of derived demand is the demand for:

In a purely competitive industry,which of the following could cause a firm's marginal revenue product for an economic resource to increase?

The best example of an industrial union is the:

Which is an example of a change in productivity that decreases labor demand?

Refer to the above graph.What will shift D₁ to D₂?

The strength of labor demand and the rightward position of the labor demand curve differ greatly among occupations due to differences in how much various occupational groups contribute to their firm's revenue.

An increase in the price of aluminum increases the cost of producing aluminum products and reduces the demand for aluminum workers.This decrease in labor demand would be caused by which change in a determinant of labor demand?

Marginal revenue product describes the:

In firm X,labor costs are 85 percent of production costs,while in firm Y labor costs are 40 percent of production costs.A 20 percent increase in wages would increase production costs by:

Derived demand is the demand:

A firm would be likely to lay off workers following:

A union composed of all workers in a given plant or industry is called a(n):

What will the elasticity of resource demand be if unit wages rise by 5 percent and the number of employed workers falls by 12 percent?

Refer to the above graph.If a monopsonist bargains with an inclusive union,as shown,the wage rate will be:

A characteristic of a purely competitive labor market would be:

Which action taken by a worker would not be an investment in human capital?

If the price of a good increases,then in the market for labor that is used to make this product:

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 characteristic of a purely competitive labor market would be:

Other things being equal,if a formerly competitive firm attains a high degree of monopoly power,its resource demand curve will:

If the supply of labor in a purely competitive labor market increases,the labor:

An example of derived demand is the demand for:

In a purely competitive industry,which of the following could cause a firm's marginal revenue product for an economic resource to increase?

The best example of an industrial union is the:

Which is an example of a change in productivity that decreases labor demand?

Refer to the above graph.What will shift D1 to D2?

The strength of labor demand and the rightward position of the labor demand curve differ greatly among occupations due to differences in how much various occupational groups contribute to their firm's revenue.

An increase in the price of aluminum increases the cost of producing aluminum products and reduces the demand for aluminum workers.This decrease in labor demand would be caused by which change in a determinant of labor demand?

Marginal revenue product describes the:

In firm X,labor costs are 85 percent of production costs,while in firm Y labor costs are 40 percent of production costs.A 20 percent increase in wages would increase production costs by:

Derived demand is the demand:

A firm would be likely to lay off workers following:

A union composed of all workers in a given plant or industry is called a(n):

What will the elasticity of resource demand be if unit wages rise by 5 percent and the number of employed workers falls by 12 percent?

Refer to the above graph.If a monopsonist bargains with an inclusive union,as shown,the wage rate will be:

A characteristic of a purely competitive labor market would be:

Which action taken by a worker would not be an investment in human capital?

If the price of a good increases,then in the market for labor that is used to make this product:

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

Refer to the above graph.What will shift D₁ to D₂?