Question 1

Outsourcing is when:

Accepted Answer

A)  consumers buy products made in another country. 
B)  foreign consumers buy products made in the United States. 
C)  U.S. firms relocate their production to overseas facilities. 
D)  the costs of operating are higher in another country. 
E)  the domestic labor supply shrinks. 
A)  consumers buy products made in another country. 
B)  foreign consumers buy products made in the United States. 
C)  U.S. firms relocate their production to overseas facilities. 
D)  the costs of operating are higher in another country. 
E)  the domestic labor supply shrinks.

Question 2

The accompanying table shows the supply and demand schedules for workers in the country of Hovian. The supply schedule indicates that the labor supply curve is: $\begin{array}{ccc}\text { Wage } & \begin{array}{l}
\text { Quantity of } \
\text { Woukers Demanded }
\end{array} & \begin{array}{l}
\text { Quantity of } \
\text { Workers Supplied }
\end{array} \
\$ 10 & 150 & 75 \
\$ 20 & 100 & 100 \
\$ 30 & 75 & 125 \
\$ 40 & 60 & 135 \
\$ 50 & 40 & 125
\end{array}$

Accepted Answer

A)  backward bending. 
B)  upward-sloping. 
C)  downward-sloping. 
D)  vertical. 
E)  horizontal. 
A)  backward bending. 
B)  upward-sloping. 
C)  downward-sloping. 
D)  vertical. 
E)  horizontal.

Question 3

The labor supply curve is given by the equation LS = 3W + 20 and the labor demand curve is given by the equation LD = 80 − 2W. The equilibrium number of workers in this labor market is:

Accepted Answer

A)  12. 
B)  20. 
C)  36. 
D)  56. 
E)  80. 
A)  12. 
B)  20. 
C)  36. 
D)  56. 
E)  80.

Question 4

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

Accepted Answer

A)  $10. 
B)  $20. 
C)  $30. 
D)  $40. 
E)  $50. 
A)  $10. 
B)  $20. 
C)  $30. 
D)  $40. 
E)  $50.

Question 5

Cupcakes previously sold for $3 and now sell for $5. The number of workers that King Kupcakes hires will _________. $\begin{array} { l  }
\text { Quantity of Workers }&100&200&300&400\
\text { Ouantity of Output }&650&950&1,150&1,200
\end{array}$

Accepted Answer

A)  fall. 
B)  remain unchanged, but employees will have to work overtime. 
C)  increase. 
D)  stay the same. 
E)  increase indefinitely. 
A)  fall. 
B)  remain unchanged, but employees will have to work overtime. 
C)  increase. 
D)  stay the same. 
E)  increase indefinitely.

Question 6

Refer to the accompanying graphs to answer the questions.
Graph A   Graph B   Graph C   Graph D   Graph E  
-Choose the graph that reflects this scenario: Sallie decides that she values income much more strongly because she uses the money to buy goods she can enjoy more than free time.

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 7

The diminishing marginal product of labor exists when the last worker hired produces:

Accepted Answer

A)  more output than the previous worker. 
B)  more value than the previous worker. 
C)  less value than the previous worker. 
D)  the same amount of output as the previous worker. 
E)  less output than the previous worker. 
A)  more output than the previous worker. 
B)  more value than the previous worker. 
C)  less value than the previous worker. 
D)  the same amount of output as the previous worker. 
E)  less output than the previous worker.

Question 8

The minimum wage is increased to $15. This higher wage might _________ labor force participation, shifting the labor supply curve to the _________.

Accepted Answer

A)  decrease; right 
B)  increase; left 
C)  decrease; left 
D)  increase; right 
E)  not change; right 
A)  decrease; right 
B)  increase; left 
C)  decrease; left 
D)  increase; right 
E)  not change; right

Question 9

Where would economic rents be highest?

Accepted Answer

A)  Cincinnati, OH 
B)  St. Louis, MO 
C)  New York City, NY 
D)  Toledo, OH 
E)  Grand Rapids, MI 
A)  Cincinnati, OH 
B)  St. Louis, MO 
C)  New York City, NY 
D)  Toledo, OH 
E)  Grand Rapids, MI

Question 10

Bobby knows that she is producing a value just equal to her wage. If the price of what she makes falls, Bobby knows that she:

Accepted Answer

A)  will be able to keep her job. 
B)  is likely to work overtime. 
C)  will work less. 
D)  is likely to be fired. 
E)  will not be able to find work anywhere. 
A)  will be able to keep her job. 
B)  is likely to work overtime. 
C)  will work less. 
D)  is likely to be fired. 
E)  will not be able to find work anywhere.

Question 11

Customer service jobs are easily outsourced. Graph the following for the market for customer service, and explain what happens to wages and the quantity of labor.
a. What are the short-run effects of this outsourcing on the home country?
b. What are the effects in the foreign country?
c. Who wins and loses in these moves?

Accepted Answer

a. Firms reduce demand for workers in th

Question 12

If you know that the substitution effect dominates the income effect when Joe's wage rises, you can tell that his labor supply curve is:

Accepted Answer

A)  upward-sloping. 
B)  downward-sloping. 
C)  vertical. 
D)  upward-sloping at an increasing rate. 
E)  downward-sloping at an increasing rate. 
A)  upward-sloping. 
B)  downward-sloping. 
C)  vertical. 
D)  upward-sloping at an increasing rate. 
E)  downward-sloping at an increasing rate.

Question 13

When Jane earns more income but still works less, leisure is a _________ good for Jane.

Accepted Answer

A)  substitute 
B)  complement 
C)  luxury 
D)  necessity 
E)  normal 
A)  substitute 
B)  complement 
C)  luxury 
D)  necessity 
E)  normal

Question 14

If Mary rents her land for $250/month and her next best use of the land would earn her $100/month, her economic rent is __________.

Accepted Answer

A)  $250 
B)  $150 
C)  $100 
D)  $75 
E)  $25 
A)  $250 
B)  $150 
C)  $100 
D)  $75 
E)  $25

Question 15

Which position is most easily outsourced?

Accepted Answer

A)  a customer service representative at your local cable company 
B)  a hair stylist 
C)  a local town chocolatier 
D)  a general practitioner doctor 
E)  an economics professor 
A)  a customer service representative at your local cable company 
B)  a hair stylist 
C)  a local town chocolatier 
D)  a general practitioner doctor 
E)  an economics professor

Outsourcing is when:

The accompanying table shows the supply and demand schedules for workers in the country of Hovian. The supply schedule indicates that the labor supply curve is: Wage Quantity of Woukers Demanded Quantity of Workers Supplied \ 10 150 75 \ 20 100 100 \ 30 75 125 \ 40 60 135 \ 50 40 125

The labor supply curve is given by the equation L_S = 3W + 20 and the labor demand curve is given by the equation L_D = 80 − 2W. The equilibrium number of workers in this labor market is:

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 -The equilibrium wage is _________

Cupcakes previously sold for $3 and now sell for $5. The number of workers that King Kupcakes hires will _________. Quantity of Workers 100 200 300 400 Ouantity of Output 650 950 1,150 1,200

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Choose the graph that reflects this scenario: Sallie decides that she values income much more strongly because she uses the money to buy goods she can enjoy more than free time.

The diminishing marginal product of labor exists when the last worker hired produces:

The minimum wage is increased to $15. This higher wage might _ labor force participation, shifting the labor supply curve to the _.

Where would economic rents be highest?

Bobby knows that she is producing a value just equal to her wage. If the price of what she makes falls, Bobby knows that she:

If you know that the substitution effect dominates the income effect when Joe's wage rises, you can tell that his labor supply curve is:

When Jane earns more income but still works less, leisure is a _________ good for Jane.

If Mary rents her land for $250/month and her next best use of the land would earn her $100/month, her economic rent is __________.

Which position is most easily outsourced?

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

Outsourcing is when:

The accompanying table shows the supply and demand schedules for workers in the country of Hovian. The supply schedule indicates that the labor supply curve is: Wage Quantity of Woukers Demanded Quantity of Workers Supplied \ 10 150 75 \ 20 100 100 \ 30 75 125 \ 40 60 135 \ 50 40 125

The labor supply curve is given by the equation LS = 3W + 20 and the labor demand curve is given by the equation LD = 80 − 2W. The equilibrium number of workers in this labor market is:

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 -The equilibrium wage is _________

Cupcakes previously sold for $3 and now sell for $5. The number of workers that King Kupcakes hires will _________. Quantity of Workers 100 200 300 400 Ouantity of Output 650 950 1,150 1,200

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Choose the graph that reflects this scenario: Sallie decides that she values income much more strongly because she uses the money to buy goods she can enjoy more than free time.

The diminishing marginal product of labor exists when the last worker hired produces:

The minimum wage is increased to $15. This higher wage might _________ labor force participation, shifting the labor supply curve to the _________.

Where would economic rents be highest?

Bobby knows that she is producing a value just equal to her wage. If the price of what she makes falls, Bobby knows that she:

If you know that the substitution effect dominates the income effect when Joe's wage rises, you can tell that his labor supply curve is:

When Jane earns more income but still works less, leisure is a _________ good for Jane.

If Mary rents her land for $250/month and her next best use of the land would earn her $100/month, her economic rent is __________.

Which position is most easily outsourced?

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 labor supply curve is given by the equation L_S = 3W + 20 and the labor demand curve is given by the equation L_D = 80 − 2W. The equilibrium number of workers in this labor market is:

The minimum wage is increased to $15. This higher wage might _ labor force participation, shifting the labor supply curve to the _.