Question 1

Wage differences across jobs reflecting the fact that some jobs are less pleasant or safe than others are called efficiency wages.

Accepted Answer

A) True 
 B)False

Question 2

When a person becomes better educated and is able to produce a better product,the person's education is an improvement in:

Accepted Answer

A)  human capital. 
B)  physical capital. 
C)  land. 
D)  labour. 
A)  human capital. 
B)  physical capital. 
C)  land. 
D)  labour.

Question 3

At Hamill Manufacturing of Alberta,highly skilled senior machinists are paid $70 000,excluding benefits,but the average-skilled machinist generates approximately $137 000 in value added.This difference means that the marginal productivity theory of income distribution doesn't hold.

Accepted Answer

A) True 
 B)False

Question 4

Capital,the factor of production,includes physical capital (such as buildings and machines),human capital (improvement in labour by education and knowledge),and financial capital (such as stock market investments).

Accepted Answer

A) True 
 B)False

Question 5

The opportunity cost of an hour of leisure:

Accepted Answer

A)  is always assumed to be equal to the minimum wage. 
B)  is the hourly wage rate. 
C)  increases if the hour of leisure time is spent in an unproductive activity. 
D)  decreases if the hour of leisure is spent in a productive activity. 
A)  is always assumed to be equal to the minimum wage. 
B)  is the hourly wage rate. 
C)  increases if the hour of leisure time is spent in an unproductive activity. 
D)  decreases if the hour of leisure is spent in a productive activity.

Question 6

The _____ effect of a _____ wage causes individuals to substitute _____.

Accepted Answer

A)  substitution;higher;labour for leisure 
B)  income;higher;labour for leisure 
C)  substitution;lower;labour for leisure 
D)  complementary;constant;leisure for labour 
A)  substitution;higher;labour for leisure 
B)  income;higher;labour for leisure 
C)  substitution;lower;labour for leisure 
D)  complementary;constant;leisure for labour

Question 7

Within the labour-leisure framework,when an individual's income effect is stronger than the substitution effect from a wage increase,it means they have a(n):

Accepted Answer

A)  inverted U-shaped labour supply curve. 
B)  labour supply curve that is upward sloping but from the origin. 
C)  downward-sloping labour supply curve in the wage range in question. 
D)  upward-sloping labour supply curve in the wage range in question. 
A)  inverted U-shaped labour supply curve. 
B)  labour supply curve that is upward sloping but from the origin. 
C)  downward-sloping labour supply curve in the wage range in question. 
D)  upward-sloping labour supply curve in the wage range in question.

Question 8

Use the following to answer questions :  
-(Table: Employment and Output)Use Table: Employment and Output.In the table,if the price of a kilogram of wheat is $10,then the value of the marginal product of the third worker is:

Accepted Answer

A)  $15. 
B)  $150. 
C)  $170. 
D)  $510. 
A)  $15. 
B)  $150. 
C)  $170. 
D)  $510.

Question 9

Which formula is CORRECT?

Accepted Answer

A)  VMPL = MC × P. 
B)  VMPL = MPL × P. 
C)  MPL = VMPL × P. 
D)  VMPL / MC = TR. 
A)  VMPL = MC × P. 
B)  VMPL = MPL × P. 
C)  MPL = VMPL × P. 
D)  VMPL / MC = TR.

Question 10

In Canada in 2016,approximately 58% of total income,by far the largest share,took the form of:

Accepted Answer

A)  compensation of employees. 
B)  corporate profits. 
C)  interest income. 
D)  rental income. 
A)  compensation of employees. 
B)  corporate profits. 
C)  interest income. 
D)  rental income.

Question 11

The fact that members of labour unions often have higher wages than do workers who are not members of a union is proof that the marginal productivity theory of income distribution is not valid.

Accepted Answer

A) True 
 B)False

Question 12

A leftward shift in the labour supply curve will result if:

Accepted Answer

A)  people begin to value leisure more highly. 
B)  people have less nonlabour income. 
C)  transit costs to and from work decline. 
D)  the population increases. 
A)  people begin to value leisure more highly. 
B)  people have less nonlabour income. 
C)  transit costs to and from work decline. 
D)  the population increases.

Question 13

A backward-bending supply curve of labour shows that at relatively high wages,the _____ effect dominates the _____ effect,and the supply curve has a _____ slope.

Accepted Answer

A)  income;substitution;positive 
B)  income;substitution;negative 
C)  substitution;income;positive 
D)  substitution;income;negative 
A)  income;substitution;positive 
B)  income;substitution;negative 
C)  substitution;income;positive 
D)  substitution;income;negative

Question 14

Regardless of gender and ethnicity,more education is associated with higher median earnings.

Accepted Answer

A) True 
 B)False

Question 15

A backward-bending supply curve of labour shows that at relatively low wages,the _____ effect dominates the _____ effect,and the supply curve has a _____ slope.

Accepted Answer

A)  income;substitution;positive 
B)  income;substitution;negative 
C)  substitution;income;positive 
D)  substitution;income;negative 
A)  income;substitution;positive 
B)  income;substitution;negative 
C)  substitution;income;positive 
D)  substitution;income;negative

Question 16

The opportunity cost of an hour of leisure is the hourly wage rate.

Accepted Answer

A) True 
 B)False

Question 17

An efficiency wage is higher than the equilibrium wage to motivate the employee to work hard.

Accepted Answer

A) True 
 B)False

Question 18

According to the marginal productivity theory of income distribution,every factor of production is paid a wage equal to the equilibrium value of its average product.

Accepted Answer

A) True 
 B)False

Question 19

Which statement describes a compensating differential?

Accepted Answer

A)  Tiger Woods gets paid more than does a university professor. 
B)  A window washer working in a suburban residential subdivision gets paid less than does one who is washing windows on the outside of a skyscraper. 
C)  A nuclear scientist gets paid more than does a janitor working in the same building. 
D)  On average,White men get paid more than do women of all ethnicities. 
A)  Tiger Woods gets paid more than does a university professor. 
B)  A window washer working in a suburban residential subdivision gets paid less than does one who is washing windows on the outside of a skyscraper. 
C)  A nuclear scientist gets paid more than does a janitor working in the same building. 
D)  On average,White men get paid more than do women of all ethnicities.

Question 20

In the past 30 years,the ability of unions to increase wages and improve working conditions for their members has:

Accepted Answer

A)  increased. 
B)  decreased. 
C)  remained constant. 
D)  proved the marginal productivity theory of income distribution to be false. 
A)  increased. 
B)  decreased. 
C)  remained constant. 
D)  proved the marginal productivity theory of income distribution to be false.

Exam 19: Factor Markets and the Distribution of Income

Wage differences across jobs reflecting the fact that some jobs are less pleasant or safe than others are called efficiency wages.

When a person becomes better educated and is able to produce a better product,the person's education is an improvement in:

At Hamill Manufacturing of Alberta,highly skilled senior machinists are paid $70 000,excluding benefits,but the average-skilled machinist generates approximately $137 000 in value added.This difference means that the marginal productivity theory of income distribution doesn't hold.

Capital,the factor of production,includes physical capital (such as buildings and machines),human capital (improvement in labour by education and knowledge),and financial capital (such as stock market investments).

The opportunity cost of an hour of leisure:

The _____ effect of a _____ wage causes individuals to substitute _____.

Within the labour-leisure framework,when an individual's income effect is stronger than the substitution effect from a wage increase,it means they have a(n):

Use the following to answer questions : -(Table: Employment and Output)Use Table: Employment and Output.In the table,if the price of a kilogram of wheat is $10,then the value of the marginal product of the third worker is:

Which formula is CORRECT?

In Canada in 2016,approximately 58% of total income,by far the largest share,took the form of:

The fact that members of labour unions often have higher wages than do workers who are not members of a union is proof that the marginal productivity theory of income distribution is not valid.

A leftward shift in the labour supply curve will result if:

A backward-bending supply curve of labour shows that at relatively high wages,the _____ effect dominates the _____ effect,and the supply curve has a _____ slope.

Regardless of gender and ethnicity,more education is associated with higher median earnings.

A backward-bending supply curve of labour shows that at relatively low wages,the _____ effect dominates the _____ effect,and the supply curve has a _____ slope.

The opportunity cost of an hour of leisure is the hourly wage rate.

An efficiency wage is higher than the equilibrium wage to motivate the employee to work hard.

According to the marginal productivity theory of income distribution,every factor of production is paid a wage equal to the equilibrium value of its average product.

Which statement describes a compensating differential?

In the past 30 years,the ability of unions to increase wages and improve working conditions for their members has:

First Principles

Economic Models

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve- Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Uncertainty, risk, and Private Information

Graphs in Economics

Consumer Preferences

Indifference Curve Analysis

Filters

The ___ effect of a _ wage causes individuals to substitute ___.

A backward-bending supply curve of labour shows that at relatively high wages,the ___ effect dominates the _ effect,and the supply curve has a ___ slope.

A backward-bending supply curve of labour shows that at relatively low wages,the ___ effect dominates the _ effect,and the supply curve has a ___ slope.