Question 1

In 2015,the median weekly earnings of union members were actually lower than that of workers not represented by unions.

Accepted Answer

A) True 
 B)False

Question 2

Efficiency wages reduce unemployment.

Accepted Answer

A) True 
 B)False

Question 3

Median earnings in the Canadian labour market are higher for men than for women (regardless of ethnicity).

Accepted Answer

A) True 
 B)False

Question 4

A decrease in the demand for pastry chefs may come about because of an increase in the:

Accepted Answer

A)  concern for healthy living. 
B)  market wage rate for pastry chefs. 
C)  productivity of pastry chefs. 
D)  supply of other factors that pastry chefs use. 
A)  concern for healthy living. 
B)  market wage rate for pastry chefs. 
C)  productivity of pastry chefs. 
D)  supply of other factors that pastry chefs use.

Question 5

If the marginal product is _____,the value of marginal product must be _____.

Accepted Answer

A)  rising;falling 
B)  falling;falling 
C)  falling;rising 
D)  rising;zero 
A)  rising;falling 
B)  falling;falling 
C)  falling;rising 
D)  rising;zero

Question 6

If a union is able to bargain for a wage that is higher than the equilibrium:

Accepted Answer

A)  all workers will earn a wage equal to their value of marginal product. 
B)  some excess supply of labour or unemployment will generally result. 
C)  compensating differentials will be erased. 
D)  diminishing returns will not exist. 
A)  all workers will earn a wage equal to their value of marginal product. 
B)  some excess supply of labour or unemployment will generally result. 
C)  compensating differentials will be erased. 
D)  diminishing returns will not exist.

Question 7

In a given perfectly competitive labour market,the equilibrium wage:

Accepted Answer

A)  is the same for all workers in that labour market. 
B)  is always greater than the value of marginal product. 
C)  results in diminishing marginal product. 
D)  causes some people to be unemployed. 
A)  is the same for all workers in that labour market. 
B)  is always greater than the value of marginal product. 
C)  results in diminishing marginal product. 
D)  causes some people to be unemployed.

Question 8

Above-equilibrium wages paid by some employers as an incentive for better performance are called:

Accepted Answer

A)  efficiency wages. 
B)  market power wages. 
C)  compensating differentials. 
D)  discrimination. 
A)  efficiency wages. 
B)  market power wages. 
C)  compensating differentials. 
D)  discrimination.

Question 9

Use the following to answer questions : $$\begin{array}{l}
\text { Table: Total Product of Labour at Debbie's Bakery }\
\begin{array} { l c } 
\begin{array} { l } 
\text { Quantity of Labour } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Total Product of Labour } \
\text { (cakes per worker) }
\end{array} \
\hline 0 & 0 \
1 & 3 \
2 & 10 \
3 & 16 \
4 & 21 \
5 & 25 \
6 & 28
\end{array}
\end{array}$$
-(Table: Total Product of Labour at Debbie's Bakery)Use Table: Total Product of Labour at Debbie's Bakery.Debbie can sell cakes at $8 each.Debbie must pay each worker $45 per day.How many workers will she hire to maximize profit?

Accepted Answer

A)  2 
B)  3 
C)  4 
D)  5 
A)  2 
B)  3 
C)  4 
D)  5

Question 10

According to the _____,in a perfectly competitive economy,each factor of production is paid its equilibrium value of the marginal product.

Accepted Answer

A)  theory of labour supply 
B)  efficiency-wage model 
C)  theory of compensating differentials 
D)  marginal productivity theory of income distribution 
A)  theory of labour supply 
B)  efficiency-wage model 
C)  theory of compensating differentials 
D)  marginal productivity theory of income distribution

Question 11

A person's optimal labour supply choice:

Accepted Answer

A)  is similar to a person's optimal consumption rule,but with consumption and leisure as the "goods" in question. 
B)  is not useful in determining how many hours a person should work. 
C)  reveals little about a person's labour-leisure choices. 
D)  results in people working too much for too little pay. 
A)  is similar to a person's optimal consumption rule,but with consumption and leisure as the "goods" in question. 
B)  is not useful in determining how many hours a person should work. 
C)  reveals little about a person's labour-leisure choices. 
D)  results in people working too much for too little pay.

Question 12

The Bountiful Bakery is considering hiring another pastry chef.The bakery knows that the average product of its chefs currently is 15 dozen croissants per day.It also believes that the next chef hired will produce an extra 12 dozen croissants per day.A dozen croissants sell for $30.The bakery should hire another worker:

Accepted Answer

A)  only if the new chef's marginal product is 12 dozen or more. 
B)  only if the new chef's daily wage is $450 or less. 
C)  only if the new chef's daily wage is $360 or less. 
D)  because the marginal product is below the average product. 
A)  only if the new chef's marginal product is 12 dozen or more. 
B)  only if the new chef's daily wage is $450 or less. 
C)  only if the new chef's daily wage is $360 or less. 
D)  because the marginal product is below the average product.

Question 13

Holly and Emily both have bachelor's degrees in nursing from the same university.Both have been nurses for 8 years.Holly works from 11 P.M.until 7 A.M. ,and Emily works from 7 A.M.until 3 P.M.Holly's salary is $1 000 per month,which is higher than Emily's salary.This is an example of a wage disparity due to a compensating differential.

Accepted Answer

A) True 
 B)False

Question 14

Over the past several years,the demand for phone operators has fallen dramatically.Which factor would account for this development?

Accepted Answer

A)  an increase in the number of automated answering services 
B)  a decrease in the quality of the technology associated with phone equipment 
C)  an increase in the supply of phone operators 
D)  higher prices for long-distance service 
A)  an increase in the number of automated answering services 
B)  a decrease in the quality of the technology associated with phone equipment 
C)  an increase in the supply of phone operators 
D)  higher prices for long-distance service

Question 15

Firms will continue to hire workers as long as:

Accepted Answer

A)  they make a profit. 
B)  the value of the marginal product is greater than the marginal cost of hiring labour. 
C)  the wage is below the product price. 
D)  there are no diminishing returns. 
A)  they make a profit. 
B)  the value of the marginal product is greater than the marginal cost of hiring labour. 
C)  the wage is below the product price. 
D)  there are no diminishing returns.

Question 16

Unions and efficiency wages usually lead to wages that are below the equilibrium level.

Accepted Answer

A) True 
 B)False

Question 17

Use the following to answer questions :
Scenario: The Decision to Hire Labour
Assume that both the product market and the labour market are perfectly competitive.The price of this firm's product is $5.The firm's total product with respect to labour is given in the table that follows. $\begin{array}{llcc}
 \hline  \text { Quantity } &  \
 \text { of Labour } & \text {  Quantity } \
 \text { (workers)  } & \text {of Output  }\
\hline 0&0\
1 &7\
2 &13\
3&18\
4&21\
\hline
\end{array}$

-(Scenario: The Decision to Hire Labour)Use Scenario: The Decision to Hire Labour.What is the value of the marginal product of the third worker to this firm?

Accepted Answer

A)  $5 
B)  $25 
C)  $18 
D)  $10 
A)  $5 
B)  $25 
C)  $18 
D)  $10

Question 18

Large disparities in wages are often used as:

Accepted Answer

A)  evidence of the importance of profit maximization. 
B)  a means to question the validity of the marginal productivity theory of income distribution. 
C)  evidence of diminishing returns. 
D)  evidence to illustrate the absence of market failures in factor markets. 
A)  evidence of the importance of profit maximization. 
B)  a means to question the validity of the marginal productivity theory of income distribution. 
C)  evidence of diminishing returns. 
D)  evidence to illustrate the absence of market failures in factor markets.

Question 19

The amount that an additional unit of a factor adds to a firm's total revenue is called the:

Accepted Answer

A)  marginal revenue. 
B)  marginal cost. 
C)  additional revenue product. 
D)  value of the marginal product. 
A)  marginal revenue. 
B)  marginal cost. 
C)  additional revenue product. 
D)  value of the marginal product.

Question 20

Over the past 30 years,the premium for workers with advanced degrees has decreased.

Accepted Answer

A) True 
 B)False

In 2015,the median weekly earnings of union members were actually lower than that of workers not represented by unions.

Efficiency wages reduce unemployment.

Median earnings in the Canadian labour market are higher for men than for women (regardless of ethnicity).

A decrease in the demand for pastry chefs may come about because of an increase in the:

If the marginal product is _,the value of marginal product must be _.

If a union is able to bargain for a wage that is higher than the equilibrium:

In a given perfectly competitive labour market,the equilibrium wage:

Above-equilibrium wages paid by some employers as an incentive for better performance are called:

According to the _____,in a perfectly competitive economy,each factor of production is paid its equilibrium value of the marginal product.

A person's optimal labour supply choice:

Over the past several years,the demand for phone operators has fallen dramatically.Which factor would account for this development?

Firms will continue to hire workers as long as:

Unions and efficiency wages usually lead to wages that are below the equilibrium level.

Large disparities in wages are often used as:

The amount that an additional unit of a factor adds to a firm's total revenue is called the:

Over the past 30 years,the premium for workers with advanced degrees has decreased.

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

Exam 19: Factor Markets and the Distribution of Income

In 2015,the median weekly earnings of union members were actually lower than that of workers not represented by unions.

Efficiency wages reduce unemployment.

Median earnings in the Canadian labour market are higher for men than for women (regardless of ethnicity).

A decrease in the demand for pastry chefs may come about because of an increase in the:

If the marginal product is _____,the value of marginal product must be _____.

If a union is able to bargain for a wage that is higher than the equilibrium:

In a given perfectly competitive labour market,the equilibrium wage:

Above-equilibrium wages paid by some employers as an incentive for better performance are called:

According to the _____,in a perfectly competitive economy,each factor of production is paid its equilibrium value of the marginal product.

A person's optimal labour supply choice:

Over the past several years,the demand for phone operators has fallen dramatically.Which factor would account for this development?

Firms will continue to hire workers as long as:

Unions and efficiency wages usually lead to wages that are below the equilibrium level.

Large disparities in wages are often used as:

The amount that an additional unit of a factor adds to a firm's total revenue is called the:

Over the past 30 years,the premium for workers with advanced degrees has decreased.

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

If the marginal product is _,the value of marginal product must be _.