Question 1

If there is an increase in immigration into a specific labor market, then

Accepted Answer

A)  The demand for labor will increase, and the equilibrium wage rises. 
B)  The supply of labor shifts leftward, and the equilibrium wage will increase. 
C)  The equilibrium wage will rise, and the quantity of labor hired will fall. 
D)  The supply of labor shifts rightward, and the equilibrium wage will fall. 
A)  The demand for labor will increase, and the equilibrium wage rises. 
B)  The supply of labor shifts leftward, and the equilibrium wage will increase. 
C)  The equilibrium wage will rise, and the quantity of labor hired will fall. 
D)  The supply of labor shifts rightward, and the equilibrium wage will fall.

Question 2

If Lauren's substitution effects outweigh her income effects, her labor supply curve will

Accepted Answer

A)  Appear horizontal. 
B)  Slope upward. 
C)  Bend backward. 
D)  Appear vertical. 
A)  Appear horizontal. 
B)  Slope upward. 
C)  Bend backward. 
D)  Appear vertical.

Question 3

If the demand for alarm clocks decreases, the effect on the alarm clock job market will be to

Accepted Answer

A)  Increase the demand for labor and increase equilibrium wages. 
B)  Reduce the supply of labor and increase equilibrium wages. 
C)  Decrease the demand for labor and reduce equilibrium wages. 
D)  Have no impact on equilibrium wages. 
A)  Increase the demand for labor and increase equilibrium wages. 
B)  Reduce the supply of labor and increase equilibrium wages. 
C)  Decrease the demand for labor and reduce equilibrium wages. 
D)  Have no impact on equilibrium wages.

Question 4

Which of the following is true about the equilibrium market wage?

Accepted Answer

A)  All workers are satisfied with the wage. 
B)  All employers are satisfied with the wage. 
C)  There is no unemployment in the market at the equilibrium wage. 
D)  Competitive employers have market power with respect to the equilibrium wage. 
A)  All workers are satisfied with the wage. 
B)  All employers are satisfied with the wage. 
C)  There is no unemployment in the market at the equilibrium wage. 
D)  Competitive employers have market power with respect to the equilibrium wage.

Question 5

If leisure activities become more attractive, there will be a

Accepted Answer

A)  Rightward shift of the labor supply curve. 
B)  Leftward shift of the labor supply curve. 
C)  Movement up the labor supply curve to the right. 
D)  Movement down the labor supply curve to the left. 
A)  Rightward shift of the labor supply curve. 
B)  Leftward shift of the labor supply curve. 
C)  Movement up the labor supply curve to the right. 
D)  Movement down the labor supply curve to the left.

Question 6

The marginal revenue product establishes

Accepted Answer

A)  An upper limit to the wage rate an employer is willing and able to pay. 
B)  A lower limit to profit on the sale of a unit of output. 
C)  A lower limit to the productivity of a worker. 
D)  A lower limit to the wage rate demands of laborers. 
A)  An upper limit to the wage rate an employer is willing and able to pay. 
B)  A lower limit to profit on the sale of a unit of output. 
C)  A lower limit to the productivity of a worker. 
D)  A lower limit to the wage rate demands of laborers.

Question 7

For an upward-sloping labor supply curve, the quantity of labor supplied varies directly, ceteris paribus, with

Accepted Answer

A)  The wage rate. 
B)  The value of leisure time. 
C)  Payroll taxes. 
D)  The derived demand for labor. 
A)  The wage rate. 
B)  The value of leisure time. 
C)  Payroll taxes. 
D)  The derived demand for labor.

Question 8

If consumers decide to buy fewer strawberries, then the

Accepted Answer

A)  Demand for strawberry pickers will fall. 
B)  Demand for strawberry pickers will rise. 
C)  Quantity demanded of strawberry pickers will fall. 
D)  Quantity demanded of strawberry pickers will rise. 
A)  Demand for strawberry pickers will fall. 
B)  Demand for strawberry pickers will rise. 
C)  Quantity demanded of strawberry pickers will fall. 
D)  Quantity demanded of strawberry pickers will rise.

Question 9

The change in total revenue associated with one additional unit of input measures

Accepted Answer

A)  Elasticity of labor supply. 
B)  Cost efficiency. 
C)  MPP. 
D)  MRP. 
A)  Elasticity of labor supply. 
B)  Cost efficiency. 
C)  MPP. 
D)  MRP.

Question 10

If the wage rate increases, there will be a

Accepted Answer

A)  Leftward shift of the labor supply curve. 
B)  Rightward shift of the labor supply curve. 
C)  Movement up the labor supply curve to the right. 
D)  Movement down the labor supply curve to the left. 
A)  Leftward shift of the labor supply curve. 
B)  Rightward shift of the labor supply curve. 
C)  Movement up the labor supply curve to the right. 
D)  Movement down the labor supply curve to the left.

Question 11

If we move to the right along the upward-sloping labor supply curve, we observe that the cost of labor

Accepted Answer

A)  Increases due to the increasing opportunity cost. 
B)  Increases due to the decreasing opportunity cost. 
C)  Decreases due to the increasing opportunity cost. 
D)  Decreases due to the decreasing opportunity cost. 
A)  Increases due to the increasing opportunity cost. 
B)  Increases due to the decreasing opportunity cost. 
C)  Decreases due to the increasing opportunity cost. 
D)  Decreases due to the decreasing opportunity cost.

Question 12

In Figure 30.1, the labor supply could shift from S1 to S2 due to all of the following except

Accepted Answer

A)  Fewer workers preferring to work in this labor market. 
B)  An increase in the number of workers willing to work in this labor market. 
C)  A decrease in the payroll tax on workers. 
D)  A decrease in the attraction of leisure activities. 
A)  Fewer workers preferring to work in this labor market. 
B)  An increase in the number of workers willing to work in this labor market. 
C)  A decrease in the payroll tax on workers. 
D)  A decrease in the attraction of leisure activities.

Question 13

If the cost efficiency of input A is 45 pounds per $1 of cost, and the cost efficiency of input B is 40 pounds per $1 of cost, then input A is more cost-efficient than input B.

Accepted Answer

A) True 
 B)False

Question 14

Democrats argue that labor demand is _______, so ________ jobs will be lost when the minimum wage is raised.

Accepted Answer

A)  inelastic; few 
B)  inelastic; many 
C)  elastic; few 
D)  elastic; many 
A)  inelastic; few 
B)  inelastic; many 
C)  elastic; few 
D)  elastic; many

Question 15

When there are more qualified applicants than job openings, this indicates that the

Accepted Answer

A)  Economy must be in a recession. 
B)  Labor supply curve must be backward-bending. 
C)  Wages being offered are too high. 
D)  Available jobs must be very desirable and pay high wages. 
A)  Economy must be in a recession. 
B)  Labor supply curve must be backward-bending. 
C)  Wages being offered are too high. 
D)  Available jobs must be very desirable and pay high wages.

Question 16

As more hours are worked, the marginal utility of leisure time tends to

Accepted Answer

A)  Increase. 
B)  Decrease. 
C)  Stay the same. 
D)  Decrease initially, but then increase. 
A)  Increase. 
B)  Decrease. 
C)  Stay the same. 
D)  Decrease initially, but then increase.

Question 17

In Figure 30.2, a minimum wage of $12 will result in

Accepted Answer

A)  A shortage of 32 workers. 
B)  A shortage of 44 workers. 
C)  A surplus of 20 workers. 
D)  No shortage or surplus of workers. 
A)  A shortage of 32 workers. 
B)  A shortage of 44 workers. 
C)  A surplus of 20 workers. 
D)  No shortage or surplus of workers.

Question 18

Identify two reasons why an individual's labor supply curve is typically upward-sloping.

Accepted Answer

(1) As the amount of labor that a worker

Question 19

Opportunity wage refers to the

Accepted Answer

A)  Income an individual loses when he or she quits a job. 
B)  Highest wage an individual would earn in his or her best alternative job. 
C)  Value of goods and services that could be purchased with a certain individual's income. 
D)  Income equivalent of a volunteer worker. 
A)  Income an individual loses when he or she quits a job. 
B)  Highest wage an individual would earn in his or her best alternative job. 
C)  Value of goods and services that could be purchased with a certain individual's income. 
D)  Income equivalent of a volunteer worker.

Question 20

The market supply curve for labor curve is upward-sloping because

Accepted Answer

A)  As the wage rises, most workers want to work fewer hours. 
B)  As the wage falls, most workers want to work more hours. 
C)  As the wage rises, most workers are willing to work more hours. 
D)  For most workers, as the wage rises, the preference for leisure time increases. 
A)  As the wage rises, most workers want to work fewer hours. 
B)  As the wage falls, most workers want to work more hours. 
C)  As the wage rises, most workers are willing to work more hours. 
D)  For most workers, as the wage rises, the preference for leisure time increases.

Exam 16: The Labor Market

If there is an increase in immigration into a specific labor market, then

If Lauren's substitution effects outweigh her income effects, her labor supply curve will

If the demand for alarm clocks decreases, the effect on the alarm clock job market will be to

Which of the following is true about the equilibrium market wage?

If leisure activities become more attractive, there will be a

The marginal revenue product establishes

For an upward-sloping labor supply curve, the quantity of labor supplied varies directly, ceteris paribus, with

If consumers decide to buy fewer strawberries, then the

The change in total revenue associated with one additional unit of input measures

If the wage rate increases, there will be a

If we move to the right along the upward-sloping labor supply curve, we observe that the cost of labor

In Figure 30.1, the labor supply could shift from S1 to S2 due to all of the following except

If the cost efficiency of input A is 45 pounds per $1 of cost, and the cost efficiency of input B is 40 pounds per $1 of cost, then input A is more cost-efficient than input B.

Democrats argue that labor demand is _______, so ________ jobs will be lost when the minimum wage is raised.

When there are more qualified applicants than job openings, this indicates that the

As more hours are worked, the marginal utility of leisure time tends to

In Figure 30.2, a minimum wage of $12 will result in

Identify two reasons why an individual's labor supply curve is typically upward-sloping.

Opportunity wage refers to the

The market supply curve for labor curve is upward-sloping because

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

Filters

Democrats argue that labor demand is _, so __ jobs will be lost when the minimum wage is raised.