Question 1

Which of the following summarises the impact of population growth on the labour market?

Accepted Answer

A) This will increase the labour supply,reduce the equilibrium wage and increase the quantity of labour demanded. 
B) There will be an increase in the demand for labour.As a result,the wage rate will rise and the quantity of workers supplied will decrease. 
C) There will be an increase in the demand for jobs.This will result in an increase in the equilibrium wage rate and a movement along the labour supply curve. 
D) There will be an increase in both the demand for labour and the supply of labour.As a result,the equilibrium wage will not change. 
A) This will increase the labour supply,reduce the equilibrium wage and increase the quantity of labour demanded. 
B) There will be an increase in the demand for labour.As a result,the wage rate will rise and the quantity of workers supplied will decrease. 
C) There will be an increase in the demand for jobs.This will result in an increase in the equilibrium wage rate and a movement along the labour supply curve. 
D) There will be an increase in both the demand for labour and the supply of labour.As a result,the equilibrium wage will not change.

Question 2

A firm's demand for labour curve is also called its

Accepted Answer

A) marginal revenue product of labour curve. 
B) marginal factor cost of labour curve. 
C) marginal valuation curve. 
D) marginal benefit of labour curve. 
A) marginal revenue product of labour curve. 
B) marginal factor cost of labour curve. 
C) marginal valuation curve. 
D) marginal benefit of labour curve.

Question 3

The marginal productivity theory of income distribution states that

Accepted Answer

A) as more and more units of labour are added to a fixed quantity of capital,eventually labour's contribution to a firm's income will decrease. 
B) income distribution is determined by the marginal productivity of the factors of production that individuals own. 
C) factors of production in short supply command higher prices than those available in abundant quantities. 
D) capital owners receive the bulk of a nation's income because capital-intensive production generates productivity gains. 
A) as more and more units of labour are added to a fixed quantity of capital,eventually labour's contribution to a firm's income will decrease. 
B) income distribution is determined by the marginal productivity of the factors of production that individuals own. 
C) factors of production in short supply command higher prices than those available in abundant quantities. 
D) capital owners receive the bulk of a nation's income because capital-intensive production generates productivity gains.

Question 4

Personnel economics is

Accepted Answer

A) the study of the factors that determine wage rates. 
B) the study of how workers are affected by tax law changes. 
C) the application of economic analysis to human resource issues. 
D) the application of economic analysis to the hiring decision. 
A) the study of the factors that determine wage rates. 
B) the study of how workers are affected by tax law changes. 
C) the application of economic analysis to human resource issues. 
D) the application of economic analysis to the hiring decision.

Question 5

Compensating differentials are

Accepted Answer

A) nonmonetary benefits from being employed,such as health-care benefits. 
B) wages paid to workers where the supply of labour is great relative to demand. 
C) higher wages that compensate workers for unpleasant aspects of a job. 
D) higher wages that compensate the more experienced workers in a field. 
A) nonmonetary benefits from being employed,such as health-care benefits. 
B) wages paid to workers where the supply of labour is great relative to demand. 
C) higher wages that compensate workers for unpleasant aspects of a job. 
D) higher wages that compensate the more experienced workers in a field.

Question 6

The demand curve for labour is also

Accepted Answer

A) the demand curve for the output produced with labour since the demand for labour is a derived demand. 
B) the marginal product of labour curve. 
C) the marginal revenue product of labour curve. 
D) the supply curve for the output labour is used to produce. 
A) the demand curve for the output produced with labour since the demand for labour is a derived demand. 
B) the marginal product of labour curve. 
C) the marginal revenue product of labour curve. 
D) the supply curve for the output labour is used to produce.

Question 7

As nonunion construction workers replace a unionised work force,the average wage in the construction sector is likely to rise.

Accepted Answer

A) True 
 B)False

Question 8

Table 12-4
   Table 12-4 lists data for the production of Apple iPods.Apple is assumed to be a price maker,so to increase its sales of iPods the firm must lower its price.MPS1U1B1LS1U1B0 and MRPS1U1B1L S1U1B0refer to the marginal product of labour and the marginal revenue product of labour,respectively.
-Refer to Table 12-4.What are the price and quantity of workers that result in the maximum amount of revenue Apple would earn from selling iPods?

Accepted Answer

A) $180;1 
B) $140;2 
C) $120;2 
D) $120;4 
A) $180;1 
B) $140;2 
C) $120;2 
D) $120;4

Question 9

The difference between the salaries paid to movie stars and to actors who play supporting roles is much greater today than it was in the 1930s and 1940s.What factor explains this increase in relative salaries over time?

Accepted Answer

A) Technological advances in the entertainment industry increase the revenue that successful movies can earn.This has increased the movie studios' willingness to pay high salaries to movie stars. 
B) Agents of movies stars are effective in obtaining large salaries for their clients today.Few movie stars had agents to negotiate for them in the 1930s and 1940s. 
C) The studio system that dominated the industry in the 1930s and 1940s no longer exists.The studio system allowed movie studios to sign actors to long-term contracts that kept salaries down. 
D) There was no actors' union in the 1930s and 1940s.The rise of strong actors' unions has caused salaries of movies stars to be greater today than in previous years. 
A) Technological advances in the entertainment industry increase the revenue that successful movies can earn.This has increased the movie studios' willingness to pay high salaries to movie stars. 
B) Agents of movies stars are effective in obtaining large salaries for their clients today.Few movie stars had agents to negotiate for them in the 1930s and 1940s. 
C) The studio system that dominated the industry in the 1930s and 1940s no longer exists.The studio system allowed movie studios to sign actors to long-term contracts that kept salaries down. 
D) There was no actors' union in the 1930s and 1940s.The rise of strong actors' unions has caused salaries of movies stars to be greater today than in previous years.

Question 10

Which of the following statements regarding equilibrium in the markets for capital and for a natural resource used in producing a good is true?

Accepted Answer

A) The marginal revenue product of capital will equal the marginal revenue product of the natural resource. 
B) The rental price of capital will equal the price of the natural resource. 
C) The marginal product of capital will equal the rental price of capital and the marginal product of the natural resource will equal the price of the natural resource. 
D) The marginal revenue product of capital will equal the rental price of capital and the marginal revenue product of the natural resource will equal the price of the natural resource. 
A) The marginal revenue product of capital will equal the marginal revenue product of the natural resource. 
B) The rental price of capital will equal the price of the natural resource. 
C) The marginal product of capital will equal the rental price of capital and the marginal product of the natural resource will equal the price of the natural resource. 
D) The marginal revenue product of capital will equal the rental price of capital and the marginal revenue product of the natural resource will equal the price of the natural resource.

Question 11

Marginal revenue product of labour for a competitive seller is

Accepted Answer

A) the change in total product from hiring one more worker. 
B) equal to the marginal product of labour multiplied by the output price. 
C) the output price multiplied by the quantity sold. 
D) the marginal revenue of the product multiplied by the output price. 
A) the change in total product from hiring one more worker. 
B) equal to the marginal product of labour multiplied by the output price. 
C) the output price multiplied by the quantity sold. 
D) the marginal revenue of the product multiplied by the output price.

Question 12

Table 12-1
  
-Refer to Table 12-1.Suppose the output price is $3.If the wage rate is $90,what is the profit-maximising quantity of labour that the firm should hire?

Accepted Answer

A) 7 units 
B) 5 units 
C) 4 units 
D) 3 units 
A) 7 units 
B) 5 units 
C) 4 units 
D) 3 units

Question 13

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If hiring another worker would increase output by three units per hour,then to maximise profits the firm should

Accepted Answer

A) not change the number of workers it currently hires. 
B) not hire an additional worker. 
C) hire another worker. 
D) There is not enough information to answer the question. 
A) not change the number of workers it currently hires. 
B) not hire an additional worker. 
C) hire another worker. 
D) There is not enough information to answer the question.

Question 14

Competitive markets tend to eliminate economic discrimination,but there are many historical examples of firms that hired few,or no,black or female workers.Which of the following is not a reason for the persistence of this form of discrimination?

Accepted Answer

A) In many cases,white workers refused to work with black workers. 
B) Some white consumers were unwilling to buy from companies that employed black workers. 
C) If discrimination makes it difficult for a member of a group to be hired in a particular occupation,there is less incentive for members of the group to be trained to enter that occupation. 
D) Laws passed by the federal government made it more expensive to hire black or female workers.As a result,it was less expensive for employers to hire mostly white male workers. 
A) In many cases,white workers refused to work with black workers. 
B) Some white consumers were unwilling to buy from companies that employed black workers. 
C) If discrimination makes it difficult for a member of a group to be hired in a particular occupation,there is less incentive for members of the group to be trained to enter that occupation. 
D) Laws passed by the federal government made it more expensive to hire black or female workers.As a result,it was less expensive for employers to hire mostly white male workers.

Question 15

All else equal,a decrease in the supply of labour will shift the labour supply curve to the left and decrease the equilibrium wage.

Accepted Answer

A) True 
 B)False

Question 16

Why is a dollar today more valuable than a dollar a year from now?

Accepted Answer

A) The dollar today can be immediately used to buy something. 
B) A dollar a year from now will likely have less purchasing power because of inflation. 
C) The unknown future is riskier than the known present. 
D) All of these 
A) The dollar today can be immediately used to buy something. 
B) A dollar a year from now will likely have less purchasing power because of inflation. 
C) The unknown future is riskier than the known present. 
D) All of these

Question 17

If you want to know the present value of a future payment received in one year,what formula can you use?

Accepted Answer

A) Present value equals future payment times the current market rate of interest. 
B) Present value equals future payment divided by one plus the rate of interest. 
C) Present value equals one plus the rate of interest in decimals divided by future payment. 
D) Present value equals future payments times one plus the rate of interest. 
A) Present value equals future payment times the current market rate of interest. 
B) Present value equals future payment divided by one plus the rate of interest. 
C) Present value equals one plus the rate of interest in decimals divided by future payment. 
D) Present value equals future payments times one plus the rate of interest.

Question 18

A commission system of compensation reduces the risk to workers during seasonal periods when business is sluggish.

Accepted Answer

A) True 
 B)False

Question 19

Figure 12-1   Figure 12-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies,a producer of linen doilies.
-Refer to Figure 12-1.If Dale can sell her doilies at $2 each,what is the marginal product of the 5th worker?

Accepted Answer

A) $28 
B) 28 doilies 
C) 14 doilies 
D) $56 
A) $28 
B) 28 doilies 
C) 14 doilies 
D) $56

Question 20

Table 12-3
  
 Hotspur Incorporated,a manufacturer of microwave ovens,is a price taker in its input and output markets.The firm hires labour at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 12-3 shows the relationship between the quantity of labour it hires and the quantity of microwave ovens it produces.
-Refer to Table 12-3.What is the amount of revenue added as a result of hiring the fourth worker?

Accepted Answer

A) $1200 
B) $7200 
C) 15 microwaves 
D) 90 microwaves 
A) $1200 
B) $7200 
C) 15 microwaves 
D) 90 microwaves

Which of the following summarises the impact of population growth on the labour market?

A firm's demand for labour curve is also called its

The marginal productivity theory of income distribution states that

Personnel economics is

Compensating differentials are

The demand curve for labour is also

As nonunion construction workers replace a unionised work force,the average wage in the construction sector is likely to rise.

The difference between the salaries paid to movie stars and to actors who play supporting roles is much greater today than it was in the 1930s and 1940s.What factor explains this increase in relative salaries over time?

Which of the following statements regarding equilibrium in the markets for capital and for a natural resource used in producing a good is true?

Marginal revenue product of labour for a competitive seller is

Table 12-1 -Refer to Table 12-1.Suppose the output price is $3.If the wage rate is $90,what is the profit-maximising quantity of labour that the firm should hire?

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If hiring another worker would increase output by three units per hour,then to maximise profits the firm should

Competitive markets tend to eliminate economic discrimination,but there are many historical examples of firms that hired few,or no,black or female workers.Which of the following is not a reason for the persistence of this form of discrimination?

All else equal,a decrease in the supply of labour will shift the labour supply curve to the left and decrease the equilibrium wage.

Why is a dollar today more valuable than a dollar a year from now?

If you want to know the present value of a future payment received in one year,what formula can you use?

A commission system of compensation reduces the risk to workers during seasonal periods when business is sluggish.

Figure 12-1 Figure 12-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies,a producer of linen doilies. -Refer to Figure 12-1.If Dale can sell her doilies at $2 each,what is the marginal product of the 5th worker?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

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Exam 12: The Markets for Labour and Other Factors of Production

Which of the following summarises the impact of population growth on the labour market?

A firm's demand for labour curve is also called its

The marginal productivity theory of income distribution states that

Personnel economics is

Compensating differentials are

The demand curve for labour is also

As nonunion construction workers replace a unionised work force,the average wage in the construction sector is likely to rise.

The difference between the salaries paid to movie stars and to actors who play supporting roles is much greater today than it was in the 1930s and 1940s.What factor explains this increase in relative salaries over time?

Which of the following statements regarding equilibrium in the markets for capital and for a natural resource used in producing a good is true?

Marginal revenue product of labour for a competitive seller is

Table 12-1 -Refer to Table 12-1.Suppose the output price is $3.If the wage rate is $90,what is the profit-maximising quantity of labour that the firm should hire?

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If hiring another worker would increase output by three units per hour,then to maximise profits the firm should

Competitive markets tend to eliminate economic discrimination,but there are many historical examples of firms that hired few,or no,black or female workers.Which of the following is not a reason for the persistence of this form of discrimination?

All else equal,a decrease in the supply of labour will shift the labour supply curve to the left and decrease the equilibrium wage.

Why is a dollar today more valuable than a dollar a year from now?

If you want to know the present value of a future payment received in one year,what formula can you use?

A commission system of compensation reduces the risk to workers during seasonal periods when business is sluggish.

Figure 12-1 Figure 12-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies,a producer of linen doilies. -Refer to Figure 12-1.If Dale can sell her doilies at $2 each,what is the marginal product of the 5th worker?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters