Question 1

The backward-bending labor supply curve has its shape because, at:

Accepted Answer

A)  low wages, the income effect dominates the substitution effect, but the reverse occurs at high wages. 
B)  high wages, the substitution effect dominates the income effect, but the reverse occurs at low wages. 
C)  low wages, the substitution effect dominates the income effect, but the reverse occurs at high wages. 
D)  all wages, the income effect dominates the substitution effect. 
E)  all wages, the substitution effect dominates the income effect. 
A)  low wages, the income effect dominates the substitution effect, but the reverse occurs at high wages. 
B)  high wages, the substitution effect dominates the income effect, but the reverse occurs at low wages. 
C)  low wages, the substitution effect dominates the income effect, but the reverse occurs at high wages. 
D)  all wages, the income effect dominates the substitution effect. 
E)  all wages, the substitution effect dominates the income effect.

Question 2

Which company has the ability to outsource its operations and have its good or service produced in another country?

Accepted Answer

A)  Helen's Hair Salons 
B)  Diamond Dentistry 
C)  Queen's Quilts 
D)  Banty's Baseball Team 
E)  Ann's Fresh Pretzels 
A)  Helen's Hair Salons 
B)  Diamond Dentistry 
C)  Queen's Quilts 
D)  Banty's Baseball Team 
E)  Ann's Fresh Pretzels

Question 3

A company that produces simple textiles outsources its operations to Indonesia. Wages for Indonesian workers will _________ and their employment will _________.

Accepted Answer

A)  rise; rise 
B)  fall; rise 
C)  stay the same; fall 
D)  fall; stay the same 
E)  fall; fall 
A)  rise; rise 
B)  fall; rise 
C)  stay the same; fall 
D)  fall; stay the same 
E)  fall; fall

Question 4

The labor market is said to be in equilibrium when:

Accepted Answer

A)  everyone who wants to work is supplying his or her labor. 
B)  the number of workers is equal to the number of jobs available at a specific wage. 
C)  firms are unwilling to hire more workers. 
D)  workers keep their hours constant. 
E)  the number of available workers is increasing. 
A)  everyone who wants to work is supplying his or her labor. 
B)  the number of workers is equal to the number of jobs available at a specific wage. 
C)  firms are unwilling to hire more workers. 
D)  workers keep their hours constant. 
E)  the number of available workers is increasing.

Question 5

Use the accompanying graph, which depicts Mighty Max's labor demand for his duffle-bag business, to answer the  questions.  
-Assume that the price of duffle bags is $10. If the marginal product of labor of the sixtieth worker drops by half, what is the value of the marginal product of labor of the sixtieth worker now?

Accepted Answer

A)  $10 
B)  $15 
C)  $20 
D)  $25 
E)  $30 
A)  $10 
B)  $15 
C)  $20 
D)  $25 
E)  $30

Question 6

Which of the following describes the marginal product of labor?

Accepted Answer

A)  It is the additional amount of consumer goods that can be bought from an additional hour's worth of work. 
B)  It is the additional amount of inputs a firm demands based on a change in consumer demand for the output. 
C)  It is the additional amount of output that can be produced from hiring one more worker. 
D)  It is the decreasing amount of output that can be produced from hiring one more worker. 
E)  It is the value of production from the last worker hired. 
A)  It is the additional amount of consumer goods that can be bought from an additional hour's worth of work. 
B)  It is the additional amount of inputs a firm demands based on a change in consumer demand for the output. 
C)  It is the additional amount of output that can be produced from hiring one more worker. 
D)  It is the decreasing amount of output that can be produced from hiring one more worker. 
E)  It is the value of production from the last worker hired.

Question 7

The income effect describes the:

Accepted Answer

A)  incentive to change jobs. 
B)  decision whether to join the labor force. 
C)  decision to ask for a raise. 
D)  incentive to work more when the wage rises. 
E)  incentive to work less when the wage rises. 
A)  incentive to change jobs. 
B)  decision whether to join the labor force. 
C)  decision to ask for a raise. 
D)  incentive to work more when the wage rises. 
E)  incentive to work less when the wage rises.

Question 8

The fundamental decision faced by workers is called:

Accepted Answer

A)  labor demand. 
B)  labor supply. 
C)  income effect. 
D)  the labor-leisure trade-off. 
E)  the substitution effect. 
A)  labor demand. 
B)  labor supply. 
C)  income effect. 
D)  the labor-leisure trade-off. 
E)  the substitution effect.

Question 9

More job opportunities open up in the South, prompting labor supply curves in northern states to ________ and in southern states to ________.

Accepted Answer

A)  remain unchanged; shift right 
B)  shift right; shift right 
C)  shift left; shift right 
D)  shift left; remain unchanged 
E)  shift left; shift left 
A)  remain unchanged; shift right 
B)  shift right; shift right 
C)  shift left; shift right 
D)  shift left; remain unchanged 
E)  shift left; shift left

Question 10

Use the accompanying table, which shows the supply and demand schedules for workings in the country of Hovian, to answer the questions. $\begin{array}{rrr}\text { Wage } & \begin{array}{l}
\text { Quantity of } \
\text { Workers Demanded }
\end{array} & \begin{array}{l}
\text { Quantity of } \
\text { Workers Supplied }
\end{array} \\
\$ 10 & 150 & 75 \
\$ 20 & 100 & 100 \
\$ 30 & 75 & 125 \
\$ 40 & 60 & 135 \
\$ 50 & 40 & 125
\end{array}$
-There will be a surplus of ________ workers at a wage of ________.

Accepted Answer

A)  75; $10 
B)  100; $20 
C)  135; $40 
D)  40; $40 
E)  50; $30 
A)  75; $10 
B)  100; $20 
C)  135; $40 
D)  40; $40 
E)  50; $30

Question 11

Consider the labor market for domestic market personal trainers. Graph and explain how the following events would affect the labor supply curve for these workers.
a. Many personal trainers are qualified to coach various athletic teams. The pay for these coaching positions is far superior to what they can earn as personal trainers.
b. Most personal trainers used to be men. Now, more women are hired as personal trainers.
c. A neighboring country is looking to build its Olympic program to make the national team more competitive. As such, the government is providing very lucrative offers to personal trainers who move to that country to train potential Olympic athletes.

Accepted Answer

a. There is an incentive to switch profe

Question 12

There will be a _________ of workers when the wage is _________ the equilibrium wage.

Accepted Answer

A)  surplus; at 
B)  shortage; below 
C)  shortage; above 
D)  shortage; at 
E)  surplus; below 
A)  surplus; at 
B)  shortage; below 
C)  shortage; above 
D)  shortage; at 
E)  surplus; below

Question 13

Below is a table containing the relationship between a number of trainers working at the new gym (Crossfit by Shawna) and how many clients they can train. These clients represent the output of trainers. Clients pay $40 per session. $\begin{array}{ll}\text { Number of }\\text { Trainers }&\text { Clients Trained }\
1 & 10 \
2 & 50 \
3 & 80 \
4 & 100 \
5 & 110 \
6 & 115
\end{array}$ 
a. Find the MPL and VMPL for each additional trainer hired and record these numbers in the columns provided.
b. Crossfit by Shawna's premier trainers earn $200 an hour. How many trainers will the gym hire?

Accepted Answer

a. @#IMG-DLM& b. At six trainers, the wa

Question 14

Use the accompanying table, which shows the supply and demand schedules for workings in the country of Hovian, to answer the questions. $\begin{array}{rrr}\text { Wage } & \begin{array}{l}
\text { Quantity of } \
\text { Workers Demanded }
\end{array} & \begin{array}{l}
\text { Quantity of } \
\text { Workers Supplied }
\end{array} \\
\$ 10 & 150 & 75 \
\$ 20 & 100 & 100 \
\$ 30 & 75 & 125 \
\$ 40 & 60 & 135 \
\$ 50 & 40 & 125
\end{array}$
-Wages above _________ will cause a _________.

Accepted Answer

A)  $10; surplus 
B)  $50; shortage 
C)  $20; surplus 
D)  $30; shortage 
E)  $40; shortage 
A)  $10; surplus 
B)  $50; shortage 
C)  $20; surplus 
D)  $30; shortage 
E)  $40; shortage

Question 15

In the distant future, companies will be using technology that can replicate food. What will happen to the equilibrium wage and quantity of cooks?

Accepted Answer

A)  The wage will rise and the number of cooks employed will rise. 
B)  Both will remain unchanged. 
C)  The wage will stay the same, but many cooks will leave the market. 
D)  The wage will rise, and the number of cooks employed will fall. 
E)  The wage and quantity demand will both decrease because firms won't hire as many cooks. 
A)  The wage will rise and the number of cooks employed will rise. 
B)  Both will remain unchanged. 
C)  The wage will stay the same, but many cooks will leave the market. 
D)  The wage will rise, and the number of cooks employed will fall. 
E)  The wage and quantity demand will both decrease because firms won't hire as many cooks.

Question 16

There will be a _________ of workers when the wage is _________ the equilibrium wage.

Accepted Answer

A)  surplus; at 
B)  surplus; below 
C)  surplus; above 
D)  shortage; above 
E)  shortage; at 
A)  surplus; at 
B)  surplus; below 
C)  surplus; above 
D)  shortage; above 
E)  shortage; at

Question 17

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions.  
-At a wage of _________, there is a _________ of _________ workers.

Accepted Answer

A)  $10; surplus; 30 
B)  $40; shortage; 30 
C)  $10; shortage; 30 
D)  $35; shortage; 20 
E)  $25; surplus; 10 
A)  $10; surplus; 30 
B)  $40; shortage; 30 
C)  $10; shortage; 30 
D)  $35; shortage; 20 
E)  $25; surplus; 10

Question 18

Refer to the accompanying graphs to answer the  questions.
Graph A   Graph B   Graph C   Graph D   Graph E  
-Choose the graph that represents the following situation: Out of fear of losing their jobs in a depressed economic climate, workers increase their rate of production.

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E 
A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
E)  Graph E

Question 19

With a large group of citizens leaving a country, what will happen to the equilibrium wage and quantity of workers employed?

Accepted Answer

A)  Both will fall. 
B)  Both will rise. 
C)  The equilibrium number of workers will rise and the wage will fall. 
D)  The equilibrium number of workers will fall and the wage will fall. 
E)  The equilibrium number of workers will fall and the wage will rise. 
A)  Both will fall. 
B)  Both will rise. 
C)  The equilibrium number of workers will rise and the wage will fall. 
D)  The equilibrium number of workers will fall and the wage will fall. 
E)  The equilibrium number of workers will fall and the wage will rise.

Question 20

Consider the labor market for artisanal bakers in the United States. What would happen to labor demand or labor supply if the following situations occurred?
a. Fast-food restaurants and restaurant chains start promoting artisanal foods in order to draw a more sophisticated clientele, and the ad campaign works.
b. Happy that their talents are being recognized, artisanal bakers increase their rate of production.
c. Social norms used to make it difficult for women to be artisanal bakers, but these norms have decreased over time.
d. Tighter immigration laws prevent European bakers from entering the United States to take advantage of higher wages and benefits.
e. Droughts have reduced the supply of wheat, which lowers the available amount of flour.

Accepted Answer

a. Consumer demand for artisanal goods w

The backward-bending labor supply curve has its shape because, at:

Which company has the ability to outsource its operations and have its good or service produced in another country?

A company that produces simple textiles outsources its operations to Indonesia. Wages for Indonesian workers will _ and their employment will _.

The labor market is said to be in equilibrium when:

Which of the following describes the marginal product of labor?

The income effect describes the:

The fundamental decision faced by workers is called:

More job opportunities open up in the South, prompting labor supply curves in northern states to and in southern states to .

There will be a _ of workers when the wage is _ the equilibrium wage.

Use the accompanying table, which shows the supply and demand schedules for workings in the country of Hovian, to answer the questions. Wage Quantity of Workers Demanded Quantity of Workers Supplied \ 10 150 75 \ 20 100 100 \ 30 75 125 \ 40 60 135 \ 50 40 125 -Wages above _ will cause a _.

In the distant future, companies will be using technology that can replicate food. What will happen to the equilibrium wage and quantity of cooks?

There will be a _ of workers when the wage is _ the equilibrium wage.

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions. -At a wage of _____, there is a _ of _____ workers.

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Choose the graph that represents the following situation: Out of fear of losing their jobs in a depressed economic climate, workers increase their rate of production.

With a large group of citizens leaving a country, what will happen to the equilibrium wage and quantity of workers employed?

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income, Inequality, and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

Exam 14: The Demand and Supply of Resources

The backward-bending labor supply curve has its shape because, at:

Which company has the ability to outsource its operations and have its good or service produced in another country?

A company that produces simple textiles outsources its operations to Indonesia. Wages for Indonesian workers will _________ and their employment will _________.

The labor market is said to be in equilibrium when:

Which of the following describes the marginal product of labor?

The income effect describes the:

The fundamental decision faced by workers is called:

More job opportunities open up in the South, prompting labor supply curves in northern states to ________ and in southern states to ________.

There will be a _________ of workers when the wage is _________ the equilibrium wage.

In the distant future, companies will be using technology that can replicate food. What will happen to the equilibrium wage and quantity of cooks?

There will be a _________ of workers when the wage is _________ the equilibrium wage.

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions. -At a wage of _________, there is a _________ of _________ workers.

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Choose the graph that represents the following situation: Out of fear of losing their jobs in a depressed economic climate, workers increase their rate of production.

With a large group of citizens leaving a country, what will happen to the equilibrium wage and quantity of workers employed?

The Five Foundations of Economics

Model Building and Gains From Trade

The Market at Work: Supply and Demand

Elasticity

Price Controls

The Efficiency of Markets and the Costs of Taxation

Market Inefficiencies: Externalities and Public Goods

Business Costs and Production

Firms in a Competitive Market

Understanding Monopoly

Price Discrimination

Monopolistic Competition and Advertising

Oligopoly and Strategic Behavior

Income, Inequality, and Poverty

Consumer Choice

Behavioral Economics and Risk Taking

Health Insurance and Health Care

Filters

A company that produces simple textiles outsources its operations to Indonesia. Wages for Indonesian workers will _ and their employment will _.

More job opportunities open up in the South, prompting labor supply curves in northern states to and in southern states to .

There will be a _ of workers when the wage is _ the equilibrium wage.

There will be a _ of workers when the wage is _ the equilibrium wage.

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions. -At a wage of _____, there is a _ of _____ workers.