Question 1

If workers on the third shift make $1 per hour more than workers on the first shift,then

Accepted Answer

A)  working during the day is worth less than $1 per hour to all workers. 
B)  working during the day is worth exactly $1 per hour to all first shift workers. 
C)  working during the day is worth more than $1 per hour to all third shift workers. 
D)  working during the day is worth at least $1 per hour to all first shift workers. 
A)  working during the day is worth less than $1 per hour to all workers. 
B)  working during the day is worth exactly $1 per hour to all first shift workers. 
C)  working during the day is worth more than $1 per hour to all third shift workers. 
D)  working during the day is worth at least $1 per hour to all first shift workers.

Question 2

Predictable layoffs

Accepted Answer

A)  will not increase utility for any workers. 
B)  decrease utility of all workers. 
C)  decrease utility of risk-averse workers. 
D)  imply that leisure is an inferior good to all workers. 
A)  will not increase utility for any workers. 
B)  decrease utility of all workers. 
C)  decrease utility of risk-averse workers. 
D)  imply that leisure is an inferior good to all workers.

Question 3

Workers' indifference curves for wage rates versus benefits will be

Accepted Answer

A)  downward sloping. 
B)  upward sloping. 
C)  downward sloping and concave. 
D)  upward sloping and convex. 
A)  downward sloping. 
B)  upward sloping. 
C)  downward sloping and concave. 
D)  upward sloping and convex.

Question 4

One problem with using worker willingness-to-pay figures to set safety standards is that

Accepted Answer

A)  the utility of other parties may be affected by worker safety levels. 
B)  workers' preferences cannot be translated into monetary terms. 
C)  the use of safety equipment will decrease workers' utility. 
D)  willingness-to-pay figures usually decrease over time. 
A)  the utility of other parties may be affected by worker safety levels. 
B)  workers' preferences cannot be translated into monetary terms. 
C)  the use of safety equipment will decrease workers' utility. 
D)  willingness-to-pay figures usually decrease over time.

Question 5

Introduction of a benefit that turns out to decrease productivity would cause a firm's isoprofit curve to

Accepted Answer

A)  flatten. 
B)  become steeper. 
C)  remain unchanged. 
D)  become convex. 
A)  flatten. 
B)  become steeper. 
C)  remain unchanged. 
D)  become convex.

Question 6

In the context of the models presented in the text,why are low-income workers more likely to take dangerous jobs?

Accepted Answer

A)  Low-income workers are more easily exploited by employers. 
B)  Safety is an inferior good. 
C)  Low-income workers are not willing to pay as much for more safety as high-income workers. 
D)  All of the above 
A)  Low-income workers are more easily exploited by employers. 
B)  Safety is an inferior good. 
C)  Low-income workers are not willing to pay as much for more safety as high-income workers. 
D)  All of the above

Question 7

Graph an indifference curve for an individual that depends on the wage rate (on the vertical axis)and on the risk of injury on the job (on the horizontal axis).Explain why the indifference curve looks as you have drawn it.

Accepted Answer

The student should draw a graph with an

Question 8

The Occupational Safety and Health Administration is tasked with implementing and enforcing federal safety and health standards.Why are federal safety and health standards necessary in the workplace? Use the hedonic model to answer the question.

Accepted Answer

One rationale for workplace safety and h

Question 9

What is a compensating wage differential? What socially desirable ends does a compensating wage differential serve?

Accepted Answer

A compensating wage differential is the

Question 10

If predictable layoffs prevent workers from working as many hours as they desire,then we would expect to see

Accepted Answer

A)  increased wages to workers in industries with predictable layoffs. 
B)  decreased wages to workers in industries with predictable layoffs. 
C)  average wages in industries with predictable layoffs. 
D)  either increased or decreased wages in industries with predictable layoffs. 
A)  increased wages to workers in industries with predictable layoffs. 
B)  decreased wages to workers in industries with predictable layoffs. 
C)  average wages in industries with predictable layoffs. 
D)  either increased or decreased wages in industries with predictable layoffs.

Question 11

On a graph of wage rates versus risk of injury,indifference curves are convex because

Accepted Answer

A)  risk of injury decreases workers' utility. 
B)  each additional dollar of pay increases utility more than the previous dollar. 
C)  utility is constant on indifference curves. 
D)  at low levels of risk, a worker is less willing to give up wages for increased safety. 
A)  risk of injury decreases workers' utility. 
B)  each additional dollar of pay increases utility more than the previous dollar. 
C)  utility is constant on indifference curves. 
D)  at low levels of risk, a worker is less willing to give up wages for increased safety.

Question 12

Worker X is paid $20,000 more in a dangerous job than what Worker X could make in safe jobs.Worker X values the job characteristic of safety at $15,000.If the government makes Worker X's job safe and if safe jobs continue to pay their current wage,then,assuming markets are competitive and wages can easily adjust

Accepted Answer

A)  Worker X will be $20,000 worse off. 
B)  Worker X will be $15,000 better off. 
C)  Worker X will be $5000 worse off. 
D)  Worker X will be $20,000 better off. 
A)  Worker X will be $20,000 worse off. 
B)  Worker X will be $15,000 better off. 
C)  Worker X will be $5000 worse off. 
D)  Worker X will be $20,000 better off.

Question 13

High-paying jobs are also associated with generous benefits because

Accepted Answer

A)  benefits which cost $100 generally increase utility by more than $100 in cash. 
B)  high-paid workers can benefit from the tax advantages given to benefits. 
C)  employers know how to spend money better than their employees. 
D)  high-paid workers are risk neutral. 
A)  benefits which cost $100 generally increase utility by more than $100 in cash. 
B)  high-paid workers can benefit from the tax advantages given to benefits. 
C)  employers know how to spend money better than their employees. 
D)  high-paid workers are risk neutral.

Question 14

When we state that compensating wage differentials exist for comparable workers,we do NOT assume that

Accepted Answer

A)  workers have several jobs to choose from. 
B)  workers maximize utility. 
C)  workers maximize income. 
D)  workers accurately assess the non-pecuniary benefits of jobs. 
A)  workers have several jobs to choose from. 
B)  workers maximize utility. 
C)  workers maximize income. 
D)  workers accurately assess the non-pecuniary benefits of jobs.

Question 15

If all workers like nice working conditions and labor markets are competitive (such that workers are mobile and fully informed),then in equilibrium

Accepted Answer

A)  no worker will be in a job that does not have nice working conditions. 
B)  workers will prefer to work in jobs with nice working conditions. 
C)  workers will prefer to work in jobs without nice working conditions. 
D)  workers will be indifferent between jobs with and without nice working conditions. 
A)  no worker will be in a job that does not have nice working conditions. 
B)  workers will prefer to work in jobs with nice working conditions. 
C)  workers will prefer to work in jobs without nice working conditions. 
D)  workers will be indifferent between jobs with and without nice working conditions.

Question 16

Employers make contributions to pension funds on behalf of employees.In many instances,however,a worker is not entitled to collect from the pension unless she has worked for the firm a minimum number of years.Once the worker has worked the necessary number of years to be eligible to collect from the pension fund,the worker is said to be vested in the pension fund.A governmentally mandated change in vesting to make all workers become fully vested sooner would

Accepted Answer

A)  increase utility of all workers. 
B)  increase utility of workers who plan to stay with a company for the length of their time in the labor force. 
C)  probably cause firms affected by the legislation to decrease wages. 
D)  probably cause firms not affected by the legislation to increase wages. 
A)  increase utility of all workers. 
B)  increase utility of workers who plan to stay with a company for the length of their time in the labor force. 
C)  probably cause firms affected by the legislation to decrease wages. 
D)  probably cause firms not affected by the legislation to increase wages.

Question 17

Firm A offers the same pension to all workers,regardless of how many hours they work.Workers value the pension at $10,000 a year (and it costs Firm A $10,000 to provide the benefit).Firm B does not offer a pension but is like Firm A in all other job characteristics.The labor market is competitive and all workers have comparable skills.If there are workers in both jobs,then

Accepted Answer

A)  workers that prefer working shorter hours are more likely to work for Firm B. 
B)  all workers will prefer working for Firm A. 
C)  all workers will be indifferent between working for Firm A and Firm B. 
D)  workers that prefer working long hours are more likely to work for Firm B. 
A)  workers that prefer working shorter hours are more likely to work for Firm B. 
B)  all workers will prefer working for Firm A. 
C)  all workers will be indifferent between working for Firm A and Firm B. 
D)  workers that prefer working long hours are more likely to work for Firm B.

Question 18

Firm A's isoprofit curves are flatter than those of firm B.Therefore,

Accepted Answer

A)  firm A will be willing to pay a larger compensating differential than firm B. 
B)  firm B will be willing to pay a larger compensating differential than firm A. 
C)  both firms will pay the same compensating differential, but firm B will have higher profits than firm A. 
D)  risk is more costly to reduce in firm A than in firm B. 
A)  firm A will be willing to pay a larger compensating differential than firm B. 
B)  firm B will be willing to pay a larger compensating differential than firm A. 
C)  both firms will pay the same compensating differential, but firm B will have higher profits than firm A. 
D)  risk is more costly to reduce in firm A than in firm B.

Question 19

A steeply sloped isoprofit curve,with wages on the vertical axis and risk of injury on the horizontal axis,indicates that

Accepted Answer

A)  injury levels can be reduced easily and inexpensively. 
B)  it would be very expensive to increase safety in the workplace. 
C)  the industry is very competitive. 
D)  the industry will pay only small compensating differentials. 
A)  injury levels can be reduced easily and inexpensively. 
B)  it would be very expensive to increase safety in the workplace. 
C)  the industry is very competitive. 
D)  the industry will pay only small compensating differentials.

Question 20

A risk-averse worker gains ________ utility from a job with possible layoffs than from one with no layoffs when the two jobs have the same number of expected hours of work and wage rate.

Accepted Answer

A)  more 
B)  less 
C)  at least as much 
D)  the same amount of 
A)  more 
B)  less 
C)  at least as much 
D)  the same amount of

If workers on the third shift make $1 per hour more than workers on the first shift,then

Predictable layoffs

Workers' indifference curves for wage rates versus benefits will be

One problem with using worker willingness-to-pay figures to set safety standards is that

Introduction of a benefit that turns out to decrease productivity would cause a firm's isoprofit curve to

In the context of the models presented in the text,why are low-income workers more likely to take dangerous jobs?

Graph an indifference curve for an individual that depends on the wage rate (on the vertical axis)and on the risk of injury on the job (on the horizontal axis).Explain why the indifference curve looks as you have drawn it.

The Occupational Safety and Health Administration is tasked with implementing and enforcing federal safety and health standards.Why are federal safety and health standards necessary in the workplace? Use the hedonic model to answer the question.

What is a compensating wage differential? What socially desirable ends does a compensating wage differential serve?

If predictable layoffs prevent workers from working as many hours as they desire,then we would expect to see

On a graph of wage rates versus risk of injury,indifference curves are convex because

High-paying jobs are also associated with generous benefits because

When we state that compensating wage differentials exist for comparable workers,we do NOT assume that

If all workers like nice working conditions and labor markets are competitive (such that workers are mobile and fully informed),then in equilibrium

Firm A's isoprofit curves are flatter than those of firm B.Therefore,

A steeply sloped isoprofit curve,with wages on the vertical axis and risk of injury on the horizontal axis,indicates that

A risk-averse worker gains ________ utility from a job with possible layoffs than from one with no layoffs when the two jobs have the same number of expected hours of work and wage rate.

Introduction

Overview of the Labor Market

The Demand for Labor

Labor Demand Elasticities

Frictions in the Labor Market

Supply of Labor to the Economy: The Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination within the Firm

Gender,Race,and Ethnicity in the Labor Market

Unions and the Labor Market

Unemployment

Inequality in Earnings

The Labor-Market Effects of International Trade and Production Sharing

Filters

Exam 8: Compensating Wage Differentials and Labor Markets

If workers on the third shift make $1 per hour more than workers on the first shift,then

Predictable layoffs

Workers' indifference curves for wage rates versus benefits will be

One problem with using worker willingness-to-pay figures to set safety standards is that

Introduction of a benefit that turns out to decrease productivity would cause a firm's isoprofit curve to

In the context of the models presented in the text,why are low-income workers more likely to take dangerous jobs?

Graph an indifference curve for an individual that depends on the wage rate (on the vertical axis)and on the risk of injury on the job (on the horizontal axis).Explain why the indifference curve looks as you have drawn it.

The Occupational Safety and Health Administration is tasked with implementing and enforcing federal safety and health standards.Why are federal safety and health standards necessary in the workplace? Use the hedonic model to answer the question.

What is a compensating wage differential? What socially desirable ends does a compensating wage differential serve?

If predictable layoffs prevent workers from working as many hours as they desire,then we would expect to see

On a graph of wage rates versus risk of injury,indifference curves are convex because

High-paying jobs are also associated with generous benefits because

When we state that compensating wage differentials exist for comparable workers,we do NOT assume that

If all workers like nice working conditions and labor markets are competitive (such that workers are mobile and fully informed),then in equilibrium

Firm A's isoprofit curves are flatter than those of firm B.Therefore,

A steeply sloped isoprofit curve,with wages on the vertical axis and risk of injury on the horizontal axis,indicates that

A risk-averse worker gains ________ utility from a job with possible layoffs than from one with no layoffs when the two jobs have the same number of expected hours of work and wage rate.

Introduction

Overview of the Labor Market

The Demand for Labor

Labor Demand Elasticities

Frictions in the Labor Market

Supply of Labor to the Economy: The Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination within the Firm

Gender,Race,and Ethnicity in the Labor Market

Unions and the Labor Market

Unemployment

Inequality in Earnings

The Labor-Market Effects of International Trade and Production Sharing

Filters