Question 1

The government lowers the retirement age to 55. We would expect to see the labor supply curve:

Accepted Answer

A)  stay the same. 
B)  shift left. 
C)  stay the same but move upward. 
D)  stay the same but move downward. 
E)  shift right. 
A)  stay the same. 
B)  shift left. 
C)  stay the same but move upward. 
D)  stay the same but move downward. 
E)  shift right.

Question 2

It is profitable for a Jack's Jingles to use more equipment in the production of its songs when the:

Accepted Answer

A)  rental price of land decreases. 
B)  rental price of capital increases. 
C)  wages of workers falls. 
D)  rental price of capital decreases. 
E)  marginal product of labor falls. 
A)  rental price of land decreases. 
B)  rental price of capital increases. 
C)  wages of workers falls. 
D)  rental price of capital decreases. 
E)  marginal product of labor falls.

Question 3

Maxine finds that she is consistently unable to fill all of the open positions at her bakery. This indicates that the wage she is offering is:

Accepted Answer

A)  above the market rate. 
B)  at the market rate. 
C)  double what her competitors are offering their employees. 
D)  half of what her competitors are offering their employees. 
E)  below the market rate. 
A)  above the market rate. 
B)  at the market rate. 
C)  double what her competitors are offering their employees. 
D)  half of what her competitors are offering their employees. 
E)  below the market rate.

Question 4

Migration is when:

Accepted Answer

A)  foreign persons enter a country. 
B)  foreign persons leave a country. 
C)  citizens move to another country. 
D)  citizens move within their own country. 
E)  foreign persons move within their own country. 
A)  foreign persons enter a country. 
B)  foreign persons leave a country. 
C)  citizens move to another country. 
D)  citizens move within their own country. 
E)  foreign persons move within their own country.

Question 5

The citizens of Kingsville notice that their friends and family in the neighboring city of Deville are earning higher wages. We would expect the labor supply in Kingsville ________ and the labor supply in Deville to ________.

Accepted Answer

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

Question 6

A formerly quiet town with fantastic weather becomes "the place" to live for people from colder climates. We can expect the rental price of land to _________ land to be devoted to housing.

Accepted Answer

A)  decrease and more 
B)  increase and less 
C)  increase and more 
D)  decrease and the same amount of 
E)  increase and the same amount of 
A)  decrease and more 
B)  increase and less 
C)  increase and more 
D)  decrease and the same amount of 
E)  increase and the same amount of

Question 7

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions.  
-What is the equilibrium number of workers in Zendar?

Accepted Answer

A)  20 
B)  25 
C)  30 
D)  35 
E)  40 
A)  20 
B)  25 
C)  30 
D)  35 
E)  40

Question 8

Mary decides that worker turnover is too high at her firm. She hopes that, by paying above-market wages, workers will stay longer. This may create:

Accepted Answer

A)  a surplus of workers. 
B)  a surplus of jobs. 
C)  a shortage of workers. 
D)  a shortage of overtime. 
E)  no disequilibrium. 
A)  a surplus of workers. 
B)  a surplus of jobs. 
C)  a shortage of workers. 
D)  a shortage of overtime. 
E)  no disequilibrium.

Question 9

Labor supply is the relationship between __________.

Accepted Answer

A)  wages and willingness to hire workers 
B)  price of output and amount of output for sale 
C)  price of capital and amount of capital for sale 
D)  wages and willingness to work 
E)  wages and amount of output for sale 
A)  wages and willingness to hire workers 
B)  price of output and amount of output for sale 
C)  price of capital and amount of capital for sale 
D)  wages and willingness to work 
E)  wages and amount of output for sale

Question 10

Refer to the accompanying graphs to answer the questions.
Graph A   Graph B   Graph C   Graph D   Graph E  
-Which graph shows a person who has a fixed quantity of hours that she is willing to work per week?

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 11

Amy just applied for a position with Rory's firm. Rory knows that Amy will earn $20 an hour and can produce a value of the marginal product of labor (VMPL) of $40. Rory will _________ Amy because her VMPL is _________.

Accepted Answer

A)  hire; positive 
B)  not hire; positive 
C)  hire; negative 
D)  not hire; negative 
E)  maybe hire; positive 
A)  hire; positive 
B)  not hire; positive 
C)  hire; negative 
D)  not hire; negative 
E)  maybe hire; positive

Question 12

The earth's major governments have recently decided to combine their resources to launch an effective plan to colonize the moon.
a. Graph the market for land on the moon before the colonization effort is successful.
b. What impact will the moon base have on the rental price of land on earth? Graph and explain.

Accepted Answer

a. The demand for land has a negative sl

Question 13

Companies outsource their operations because:

Accepted Answer

A)  the weather is nicer in other countries. 
B)  employees in other countries take less sick leave. 
C)  governments in other countries allow them to operate. 
D)  labor costs are lower. 
E)  no one wants to do the work domestically. 
A)  the weather is nicer in other countries. 
B)  employees in other countries take less sick leave. 
C)  governments in other countries allow them to operate. 
D)  labor costs are lower. 
E)  no one wants to do the work domestically.

Question 14

Refer to the accompanying table to answer the questions. $\begin{array} { l  }\text { Number of Workers }&\text { Output }\
1&20\2&30\3&38\4&42\5&44
\end{array}$

-If the price of output falls from $5 to $2, the value of the marginal product of labor of all workers:

Accepted Answer

A)  increases. 
B)  remains unchanged. 
C)  increases at an increasing rate. 
D)  decreases at an increasing rate. 
E)  decreases. 
A)  increases. 
B)  remains unchanged. 
C)  increases at an increasing rate. 
D)  decreases at an increasing rate. 
E)  decreases.

Question 15

If the price of pencils falls, the marginal product of labor will _________ and the value of the marginal product of labor will _________.

Accepted Answer

A)  fall; fall 
B)  remain unchanged; increase 
C)  rise; rise 
D)  remain unchanged; decrease 
E)  remain unchanged; remain unchanged 
A)  fall; fall 
B)  remain unchanged; increase 
C)  rise; rise 
D)  remain unchanged; decrease 
E)  remain unchanged; remain unchanged

Question 16

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions.  
-At all wages below _________, there will be _________.

Accepted Answer

A)  $10; a surplus 
B)  $25; a shortage 
C)  $40; a surplus 
D)  $35; no labor supplied 
E)  $20; no labor demanded 
A)  $10; a surplus 
B)  $25; a shortage 
C)  $40; a surplus 
D)  $35; no labor supplied 
E)  $20; no labor demanded

Question 17

Use the accompanying table, which shows the supply and demand schedules for workings in the country of Hovian, to answer the questions. $\begin{array}{rrr}\text { Wage } & \begin{array}{l}
\text { Quantity of } \
\text { Workers Demanded }
\end{array} & \begin{array}{l}
\text { Quantity of } \
\text { Workers Supplied }
\end{array} \\
\$ 10 & 150 & 75 \
\$ 20 & 100 & 100 \
\$ 30 & 75 & 125 \
\$ 40 & 60 & 135 \
\$ 50 & 40 & 125
\end{array}$
-If the wage is temporarily set at $25, it will need to ________ to restore equilibrium.

Accepted Answer

A)  rise 
B)  fall 
C)  remain unchanged 
D)  decrease to zero 
E)  increase to $30 
A)  rise 
B)  fall 
C)  remain unchanged 
D)  decrease to zero 
E)  increase to $30

Question 18

The government raises the minimum wage. Which graph reflects this situation? Graph A   Graph B   Graph C   Graph D   Graph E

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

If more of the production process for automobiles were switched over to machines, the demand for auto-factory assembly-line workers would _________ for machine maintenance.

Accepted Answer

A)  decline but increase 
B)  decline and also decline 
C)  increase but decline 
D)  increase and also increase 
E)  remained unchanged but increase 
A)  decline but increase 
B)  decline and also decline 
C)  increase but decline 
D)  increase and also increase 
E)  remained unchanged but increase

Question 20

As computer usage in companies and in the home has increased, the labor demand for IT workers has:

Accepted Answer

A)  remained steady. 
B)  decreased. 
C)  fallen to zero. 
D)  infinitely increased. 
E)  increased. 
A)  remained steady. 
B)  decreased. 
C)  fallen to zero. 
D)  infinitely increased. 
E)  increased.

The government lowers the retirement age to 55. We would expect to see the labor supply curve:

It is profitable for a Jack's Jingles to use more equipment in the production of its songs when the:

Maxine finds that she is consistently unable to fill all of the open positions at her bakery. This indicates that the wage she is offering is:

Migration is when:

The citizens of Kingsville notice that their friends and family in the neighboring city of Deville are earning higher wages. We would expect the labor supply in Kingsville and the labor supply in Deville to .

A formerly quiet town with fantastic weather becomes "the place" to live for people from colder climates. We can expect the rental price of land to _________ land to be devoted to housing.

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions. -What is the equilibrium number of workers in Zendar?

Mary decides that worker turnover is too high at her firm. She hopes that, by paying above-market wages, workers will stay longer. This may create:

Labor supply is the relationship between __________.

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Which graph shows a person who has a fixed quantity of hours that she is willing to work per week?

Amy just applied for a position with Rory's firm. Rory knows that Amy will earn $20 an hour and can produce a value of the marginal product of labor (VMPL) of $40. Rory will _ Amy because her VMPL is _.

Companies outsource their operations because:

Refer to the accompanying table to answer the questions. Number of Workers Output 1 20 2 30 3 38 4 42 5 44 -If the price of output falls from $5 to $2, the value of the marginal product of labor of all workers:

If the price of pencils falls, the marginal product of labor will _ and the value of the marginal product of labor will _.

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions. -At all wages below _, there will be _.

The government raises the minimum wage. Which graph reflects this situation? Graph A Graph B Graph C Graph D Graph E

If more of the production process for automobiles were switched over to machines, the demand for auto-factory assembly-line workers would _________ for machine maintenance.

As computer usage in companies and in the home has increased, the labor demand for IT workers has:

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 government lowers the retirement age to 55. We would expect to see the labor supply curve:

It is profitable for a Jack's Jingles to use more equipment in the production of its songs when the:

Maxine finds that she is consistently unable to fill all of the open positions at her bakery. This indicates that the wage she is offering is:

Migration is when:

The citizens of Kingsville notice that their friends and family in the neighboring city of Deville are earning higher wages. We would expect the labor supply in Kingsville ________ and the labor supply in Deville to ________.

A formerly quiet town with fantastic weather becomes "the place" to live for people from colder climates. We can expect the rental price of land to _________ land to be devoted to housing.

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions. -What is the equilibrium number of workers in Zendar?

Mary decides that worker turnover is too high at her firm. She hopes that, by paying above-market wages, workers will stay longer. This may create:

Labor supply is the relationship between __________.

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Which graph shows a person who has a fixed quantity of hours that she is willing to work per week?

Amy just applied for a position with Rory's firm. Rory knows that Amy will earn $20 an hour and can produce a value of the marginal product of labor (VMPL) of $40. Rory will _________ Amy because her VMPL is _________.

Companies outsource their operations because:

Refer to the accompanying table to answer the questions. Number of Workers Output 1 20 2 30 3 38 4 42 5 44 -If the price of output falls from $5 to $2, the value of the marginal product of labor of all workers:

If the price of pencils falls, the marginal product of labor will _________ and the value of the marginal product of labor will _________.

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions. -At all wages below _________, there will be _________.

The government raises the minimum wage. Which graph reflects this situation? Graph A Graph B Graph C Graph D Graph E

If more of the production process for automobiles were switched over to machines, the demand for auto-factory assembly-line workers would _________ for machine maintenance.

As computer usage in companies and in the home has increased, the labor demand for IT workers has:

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

The citizens of Kingsville notice that their friends and family in the neighboring city of Deville are earning higher wages. We would expect the labor supply in Kingsville and the labor supply in Deville to .

Amy just applied for a position with Rory's firm. Rory knows that Amy will earn $20 an hour and can produce a value of the marginal product of labor (VMPL) of $40. Rory will _ Amy because her VMPL is _.

If the price of pencils falls, the marginal product of labor will _ and the value of the marginal product of labor will _.

The accompanying graph represents Zendar's labor market. Use this graph to answer the questions. -At all wages below _, there will be _.