Question 1

Which of the following will result when the pay-as-you-go Social Security program is introduced in a country?

Accepted Answer

A) The supply curve of saving will shift rightward 
B) The market interest rate will decline 
C) Gross investment in the economy will decline 
D) The investment demand curve will become inelastic 
A) The supply curve of saving will shift rightward 
B) The market interest rate will decline 
C) Gross investment in the economy will decline 
D) The investment demand curve will become inelastic

Question 2

Use the following figure to answer the question : Figure 18-1 : 
shows the demand and supply of unskilled labor that determines the equilibrium wage rate in the labor market.The minimum wage rate at $5.15 is higher than the equilibrium wage rate at $4.  
-Refer to Figure 18-1.Which of the following distances represents the disemployment effect of the minimum wage?

Accepted Answer

A) L1L3 
B) L2L3 
C) L2 L1 
D) OL2 
A) L1L3 
B) L2L3 
C) L2 L1 
D) OL2

Question 3

In a labor market characterized by a downward-sloping demand curve and an upward-rising supply curve,the disemployment effect of a minimum wage does not equal the total unemployment caused by the minimum wage.Which of the following can explain this difference?

Accepted Answer

A) The demand for unskilled labor increases with an increase in the wage rate 
B) At a higher wage,more people may enter the job market 
C) The demand for skilled labor increases with an increase in the wage rate 
D) At a higher wage,the supply of labor becomes inelastic 
A) The demand for unskilled labor increases with an increase in the wage rate 
B) At a higher wage,more people may enter the job market 
C) The demand for skilled labor increases with an increase in the wage rate 
D) At a higher wage,the supply of labor becomes inelastic

Question 4

Which of the following is true regarding the incidence of the social security tax?

Accepted Answer

A) Regardless of how the tax is collected,employees always bear the entire tax burden. 
B) Most economists believe that employers generally bear most of the burden of the social security tax. 
C) When the aggregate labor supply curve is said to be inelastic,the income and substitution effects of a social security tax exactly offset one another. 
D) When the supply curve of labor is perfectly elastic the net wage received by workers falls by the entire amount of the tax. 
A) Regardless of how the tax is collected,employees always bear the entire tax burden. 
B) Most economists believe that employers generally bear most of the burden of the social security tax. 
C) When the aggregate labor supply curve is said to be inelastic,the income and substitution effects of a social security tax exactly offset one another. 
D) When the supply curve of labor is perfectly elastic the net wage received by workers falls by the entire amount of the tax.

Question 5

Suppose the firms in a competitive industry form a cartel to reduce the price of one of the inputs they purchase.Which of the following will result from this collusive behavior?

Accepted Answer

A) The firms will employ fewer units of the input whose price they want to reduce. 
B) The firms will substitute other inputs for the input whose price they want to reduce. 
C) The price of the firms' final product will increase. 
D) The firms will be able to earn lower profits. 
A) The firms will employ fewer units of the input whose price they want to reduce. 
B) The firms will substitute other inputs for the input whose price they want to reduce. 
C) The price of the firms' final product will increase. 
D) The firms will be able to earn lower profits.

Question 6

The Social Security system affects the demand curve for labor because:

Accepted Answer

A) it lowers savings which translates to a lower capital stock. 
B) it promotes capital accumulation. 
C) it increases the productivity of the workers. 
D) it increases overall investment in a nation. 
A) it lowers savings which translates to a lower capital stock. 
B) it promotes capital accumulation. 
C) it increases the productivity of the workers. 
D) it increases overall investment in a nation.

Question 7

Which of the following will be a long run impact of a pay-as-you-go Social Security program?

Accepted Answer

A) A shortage in the labor market 
B) A sluggish growth in the capital stock of the economy 
C) An increase in the gross domestic product 
D) An increase in the average wage rate 
A) A shortage in the labor market 
B) A sluggish growth in the capital stock of the economy 
C) An increase in the gross domestic product 
D) An increase in the average wage rate

Question 8

Explain how you would investigate whether wage differences are due to discrimination.

Accepted Answer

To determine whether wage differences ar

Question 9

When the supply curve of labor is perfectly inelastic the burden of a social security tax is:

Accepted Answer

A) borne partly by the employers and partly by employees. 
B) borne partly by the employers only if the demand for labor is elastic. 
C) entirely borne by the employees. 
D) entirely borne by the employers. 
A) borne partly by the employers and partly by employees. 
B) borne partly by the employers only if the demand for labor is elastic. 
C) entirely borne by the employees. 
D) entirely borne by the employers.

Question 10

Suppose the current wage of Type A workers is $5 per labor hour,while that of Type B workers is $7 per labor hour.If the government sets the minimum wage in the labor market at $8 per labor hour,which of these two groups would experience a higher increase in the wage rate and by what percentage?

Accepted Answer

A) Type B workers;the wage rate would increase by 10 percent 
B) Type A workers;the wage rate would increase by 10 percent 
C) Type A workers;the wage rate would increase by 60 percent 
D) Type B workers;the wage rate would increase by 60 percent 
A) Type B workers;the wage rate would increase by 10 percent 
B) Type A workers;the wage rate would increase by 10 percent 
C) Type A workers;the wage rate would increase by 60 percent 
D) Type B workers;the wage rate would increase by 60 percent

Question 11

In determining who bears the burden of the social security tax,it is important to consider:

Accepted Answer

A) the number of workers employed. 
B) the way it is imposed on employers and employees. 
C) the supply elasticity of labor. 
D) the total labor hours supplied by each worker. 
A) the number of workers employed. 
B) the way it is imposed on employers and employees. 
C) the supply elasticity of labor. 
D) the total labor hours supplied by each worker.

Question 12

The cost of the minimum wage is most likely borne by:

Accepted Answer

A) consumers who buy goods produced in the covered industry. 
B) producers who produce goods in the covered industry. 
C) producers in both the covered and uncovered industries. 
D) consumers who have a perfectly elastic demand for goods produced by the covered industry. 
A) consumers who buy goods produced in the covered industry. 
B) producers who produce goods in the covered industry. 
C) producers in both the covered and uncovered industries. 
D) consumers who have a perfectly elastic demand for goods produced by the covered industry.

Question 13

Discrimination in hiring practices is influenced by all of the following factors,except:

Accepted Answer

A) the number of firms that discriminate in hiring. 
B) the desire of firms to make a profit. 
C) the presence of nondiscriminating employers in the market. 
D) the minimum wage. 
A) the number of firms that discriminate in hiring. 
B) the desire of firms to make a profit. 
C) the presence of nondiscriminating employers in the market. 
D) the minimum wage.

Question 14

Which of the following is a major economic impact of immigration in the U.S.?

Accepted Answer

A) An increase in the labor supply 
B) An increase in employment opportunities 
C) A fall in the population density 
D) An increase in the number of retirees 
A) An increase in the labor supply 
B) An increase in employment opportunities 
C) A fall in the population density 
D) An increase in the number of retirees

Question 15

Which of the following best describes wage discrimination?

Accepted Answer

A) Workers in one firm are paid more than the workers in another firm 
B) Workers in different industries are hired for different jobs 
C) Workers are paid according to their productive capabilities 
D) Workers having equal expected productive talents are paid differently 
A) Workers in one firm are paid more than the workers in another firm 
B) Workers in different industries are hired for different jobs 
C) Workers are paid according to their productive capabilities 
D) Workers having equal expected productive talents are paid differently

Question 16

Most of a payroll tax is eventually paid by:

Accepted Answer

A) employers if the supply curve of labor is very inelastic. 
B) employers if the labor demand curve is unit elastic. 
C) employees if the supply of labor curve is very inelastic. 
D) employees if the supply of labor curve is very elastic. 
A) employers if the supply curve of labor is very inelastic. 
B) employers if the labor demand curve is unit elastic. 
C) employees if the supply of labor curve is very inelastic. 
D) employees if the supply of labor curve is very elastic.

Question 17

Using a graph,explain the employment effects of a binding minimum wage.Who benefits,who loses,and how large are these effects?

Accepted Answer

For the labor market for unskilled worke

Question 18

Which of the following defines an efficiency wage?

Accepted Answer

A) It is the equilibrium wage rate in the labor market where the demand for labor exactly matches the supply of labor. 
B) It is an above-market wage which increases the firms' profits by increasing the productivity of all factors of production. 
C) It is an above-market wage which increases the firms' profits by lowering the costs of searching for,selecting,and training new workers. 
D) It is a below-market wage which increases the employment opportunities in an economy and reduces overall poverty. 
A) It is the equilibrium wage rate in the labor market where the demand for labor exactly matches the supply of labor. 
B) It is an above-market wage which increases the firms' profits by increasing the productivity of all factors of production. 
C) It is an above-market wage which increases the firms' profits by lowering the costs of searching for,selecting,and training new workers. 
D) It is a below-market wage which increases the employment opportunities in an economy and reduces overall poverty.

Question 19

Use the following figure to answer the question : Figure 18-2 : 
shows the demand and supply curves of labor.A per-unit tax imposed on the wage income of the employees shifts the supply curve of labor upward.  
-According to Figure 18-2,the proportion of the per-unit tax paid by employees is:

Accepted Answer

A) CB/CA. 
B) BA/OB. 
C) AB/CA. 
D) OA/OC. 
A) CB/CA. 
B) BA/OB. 
C) AB/CA. 
D) OA/OC.

Question 20

Identify some of the reasons due to which wage rates may differ among individuals even in the absence of gender or racial discrimination.

Accepted Answer

Average wage rates of groups can differ

Which of the following will result when the pay-as-you-go Social Security program is introduced in a country?

In a labor market characterized by a downward-sloping demand curve and an upward-rising supply curve,the disemployment effect of a minimum wage does not equal the total unemployment caused by the minimum wage.Which of the following can explain this difference?

Which of the following is true regarding the incidence of the social security tax?

Suppose the firms in a competitive industry form a cartel to reduce the price of one of the inputs they purchase.Which of the following will result from this collusive behavior?

The Social Security system affects the demand curve for labor because:

Which of the following will be a long run impact of a pay-as-you-go Social Security program?

Explain how you would investigate whether wage differences are due to discrimination.

When the supply curve of labor is perfectly inelastic the burden of a social security tax is:

Suppose the current wage of Type A workers is $5 per labor hour,while that of Type B workers is $7 per labor hour.If the government sets the minimum wage in the labor market at $8 per labor hour,which of these two groups would experience a higher increase in the wage rate and by what percentage?

In determining who bears the burden of the social security tax,it is important to consider:

The cost of the minimum wage is most likely borne by:

Discrimination in hiring practices is influenced by all of the following factors,except:

Which of the following is a major economic impact of immigration in the U.S.?

Which of the following best describes wage discrimination?

Most of a payroll tax is eventually paid by:

Using a graph,explain the employment effects of a binding minimum wage.Who benefits,who loses,and how large are these effects?

Which of the following defines an efficiency wage?

Use the following figure to answer the question : Figure 18-2 : shows the demand and supply curves of labor.A per-unit tax imposed on the wage income of the employees shifts the supply curve of labor upward. -According to Figure 18-2,the proportion of the per-unit tax paid by employees is:

Identify some of the reasons due to which wage rates may differ among individuals even in the absence of gender or racial discrimination.

An Introduction to Microeconomics

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

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Exam 18: Using Input Market Analysis

Which of the following will result when the pay-as-you-go Social Security program is introduced in a country?

In a labor market characterized by a downward-sloping demand curve and an upward-rising supply curve,the disemployment effect of a minimum wage does not equal the total unemployment caused by the minimum wage.Which of the following can explain this difference?

Which of the following is true regarding the incidence of the social security tax?

Suppose the firms in a competitive industry form a cartel to reduce the price of one of the inputs they purchase.Which of the following will result from this collusive behavior?

The Social Security system affects the demand curve for labor because:

Which of the following will be a long run impact of a pay-as-you-go Social Security program?

Explain how you would investigate whether wage differences are due to discrimination.

When the supply curve of labor is perfectly inelastic the burden of a social security tax is:

Suppose the current wage of Type A workers is $5 per labor hour,while that of Type B workers is $7 per labor hour.If the government sets the minimum wage in the labor market at $8 per labor hour,which of these two groups would experience a higher increase in the wage rate and by what percentage?

In determining who bears the burden of the social security tax,it is important to consider:

The cost of the minimum wage is most likely borne by:

Discrimination in hiring practices is influenced by all of the following factors,except:

Which of the following is a major economic impact of immigration in the U.S.?

Which of the following best describes wage discrimination?

Most of a payroll tax is eventually paid by:

Using a graph,explain the employment effects of a binding minimum wage.Who benefits,who loses,and how large are these effects?

Which of the following defines an efficiency wage?

Use the following figure to answer the question : Figure 18-2 : shows the demand and supply curves of labor.A per-unit tax imposed on the wage income of the employees shifts the supply curve of labor upward. -According to Figure 18-2,the proportion of the per-unit tax paid by employees is:

Identify some of the reasons due to which wage rates may differ among individuals even in the absence of gender or racial discrimination.

An Introduction to Microeconomics

Supply and Demand

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

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