Deck 13: Land, Natural Resources, and the Environment

Question 1

The income effect of changes in the wage rate can be expected to affect directly

A)the relative value placed on leisure as opposed to labor.
B)the marginal product of labor.
C)the consumption of goods and services.
D)the quality of the work force.
E)all of the above.

Answer 1

the consumption of goods and services.

Question 2

Several reasons have been advanced to explain why wages paid in the United States are so high relative to the rest of the world.Which of the following is an accurate explanation?

A)U.S.workers are better educated.
B)U.S.workers have a larger stock of capital per worker.
C)U.S.workers use more modern technology.
D)All of the above.
E)None of the above.

Answer 2

All of the above.

Question 3

What factors have affected the US labor market?

A)influx of women.
B)influx of low-skill immigrants.
C)education of the labor force.
D)all of the above.
E)none of the above.

Answer 3

all of the above.

Question 4

Suppose that tobacco farmers notice that the number of people turning up to claim summer jobs picking tobacco in the Connecticut River Valley has fallen by more than 50%.If it is their intention to hire as many people as before, their best course of action would be to:

A)do nothing because unemployed youth will eventually come asking for jobs at the minimum wage.
B)complain on local TV that parents are not providing enough encouragement to their children to go out and get a job and earn some money.
C)lower the price of tobacco so that lower wages would be economical.
D)offer higher wages to increase the opportunity cost of not working.
E)do none of the above because none of them would work.

Question 5

Suppose the United Steel Workers Union succeeds in raising wages in the steel industry.Employment in the steel industry will remain approximately constant if, other things being equal:

A)employers increase prices and the demand for steel is inelastic; the derived demand for labor is then inelastic.
B)labor cost is a relatively small percentage of the final cost of steel.
C)the possibilities of substituting capital for labor are low for technical reasons.
D)employers hold the line on prices and the demand for steel is elastic.
E)all of the above.

Question 6

Michael Jordan's high wage was predominantly:

A)exploitation.
B)an economic rent.
C)a compensation for disutility.
D)a return on high human-capital investment.
E)none of the above.

Question 7

When wages for a worker increases the number of lifetime hours worked will increase:

A)for everyone.
B)when the substitution effect is larger than the income effect.
C)when the income effect is larger than the substitution effect.
D)only for those with a college education.
E)will have no effect because individuals cannot control the number of hours worked.

Question 8

A large increase in immigration into a country of limited land and resources would, in the short run, cause:

A)the marginal product of capital to fall.
B)the quality and the educational level of the labor force to decline.
C)rents and surplus profits to rise.
D)no change in the marginal product of labor.
E)all of the above.

Question 9

Since the mid-1960s, the labor force participation rate of women in the U.S.jumped from 34 percent to almost:

A)45 percent today.
B)50 percent today.
C)60 percent today.
D)80 percent today.
E)none of the above.

Question 10

Real wage is:

A)real money.
B)income.
C)the purchasing power of an hour's work, or the money wages divided by the cost of living.
D)income from capital.
E)none of the above.

Question 11

If I used to work 35 hours a week at $6 per hour, and now I work 40 hours a week at $5.25:

A)the income effects and substitution effects are indistinguishable.
B)the income effect is more important to me.
C)the substitution effect is more important to me.
D)my experience proves that labor markets are indeed imperfect.
E)I have shifted the derived demand for my services upward.

Question 12

A person who receives a higher wage than would be necessary as an inducement to work is said to be receiving:

A)rent.
B)profit.
C)interest.
D)surtax income.
E)marginal product.

Question 13

Eliminating economic discrimination against women could be expected to:

A)increase the wages of everyone.
B)increase the wages of men only.
C)increase the wages of women only.
D)reduce the wages of everyone.
E)A or C, depending on the extent of the current discrimination.

Question 14

Which of the following should be rejected as an important reason for higher wages in the United States than in Mexico?

A)The Mexican demand curve for labor is lower because the marginal productivity of labor in Mexico is low.
B)Mexico has much less capital to work with.
C)Average educational levels are lower for Mexican workers.
D)Technology is used more intensively in U.S.production processes.
E)Most workers in the U.S.belong to unions.

Question 15

Changes in real wages are calculated by comparing changes in money wages with changes in the:

A)rate of profits.
B)cost of living.
C)effort of the work.
D)tax rate.
E)none of the above.

Question 16

Which of the following are elements that help define the supply of labor?

A)The size of the population.
B)Immigration.
C)The rate of labor-force participation.
D)The standard numbers of hours worked per week.
E)All of the above.

Question 17

Minimum wage laws can be expected to reduce employment:

A)when the specified minimum wage is greater than the equilibrium wage.
B)when the specified minimum wage is equal to the equilibrium wage.
C)when the specified minimum wage is smaller than the equilibrium wage.
D)only if unscrupulous employers exploit the monopoly power that the laws provide to them.
E)when any of the above applies depending upon other circumstances.

Question 18

Which of the following is not a major cause of wage differentials in the U.S.?

A)Differences in compensation due to workers tastes and values.
B)Non-competing groups in the labor market.
C)Differences in education across workers.
D)Government imposed wage ceilings.
E)All of the above can be expected to create wage differentials.

Question 19

What can I substitute for hours of work if my income is enough:

A)hours of leisure.
B)vacation.
C)community service.
D)all of the above.
E)none of the above.

Question 20

Which of the following should not influence the supply of labor?

A)Human capital investments in education and training.
B)A fall in the marginal revenue product of labor.
C)A decrease in the length of average work weeks.
D)Changes in social attitudes towards working.
E)All of the above can affect the supply of labor.

Question 21

Use the following to answer questions :
Figure 13-2
What is the equilibrium wage rate in Figure 13-2 if discrimination didn't exist?

A)$12
B)$9.50
C)$8
D)$4
E)none of the above

Question 22

Which of the following would probably not be directly negotiated during management-union bargaining?

A)Employee pension provisions.
B)Automatic payroll deduction of union dues.
C)The firm's profit margin.
D)The introduction of new technology.
E)Procedures for firing employees.

Question 23

Which of the following is a competitive wage determination?

A)People are all alike and jobs are alike leads to no wage differentials.
B)People are all alike and jobs differ in attractiveness leads to compensating wage differentials.
C)People differ but each type of labor is fixed in supply which leads to wage differentials that reflect supply and demand for segmented markets.
D)People differ but there is some mobility among groups leads to general equilibrium pattern of wage differentials as determined by general demand and supply.
E)All of the above are correct.

Question 24

When wages are increased:

A)reductions in employment may occur if the demand for labor is elastic.
B)reductions in employment may occur if the demand for labor is perfectly inelastic.
C)increases in employment may occur if the demand for labor is elastic.
D)increases in employment may occur if the demand for labor is inelastic.
E)both productivity and the standard of living increase as well.

Question 25

What is the basic factor in wage determination by union and management?

A)The corpus of labor legislation and judicial decisions.
B)The welfare of the consumer.
C)The bargaining strength and skill of both parties.
D)The welfare of the nation.
E)The fear that Congress will pass unfavorable legislation.

Question 26

Wages in East Asian countries have been rising rapidly in recent years.This is because the countries are:

A)investing lots of money in education and training for workers.
B)investing heavily in capital equipment and machinery.
C)importing the latest in technology.
D)all of the above.
E)none of the above.

Question 27

Which of the following does not affect the demand for labor:

A)the demand for final goods.
B)the marginal product of labor relative to the marginal products of other factors.
C)the level of capital accumulation and the state of technology.
D)changes in nominal wages due to changes in inflation.
E)all of the above can effect the demand for labor.

Question 28

Prior to the merger with the CIO, an AFL union was:

A)entirely a craft union.
B)primarily a craft union.
C)primarily a revolutionary union.
D)primarily an industrial union.
E)none of the above.

Question 29

The income effect of higher wages:

A)always works to keep the labor supply curve positively sloped.
B)can work to make the labor supply curve vertical at full employment.
C)can actually work to reduce the full employment supply of labor without appropriate taxation policies.
D)can push the vertical region of the labor supply curve well beyond the marginal revenue product schedule of derived demand.
E)none of the above.

Question 30

If through collective bargaining a union succeeds in raising its members' wages, then:

A)this would raise total wages earned.
B)the observed wage and employment levels will be indicated by the intersection of the new horizontal wage line with the demand curve.
C)the union must be simultaneously placing restrictions on union membership.
D)this will necessarily cause the demand curve for labor to shift downward.
E)the supply curve of labor will shift upward as workers substitute leisure for work.

Question 31

A perfectly competitive labor market is:

A)one in which there is a large number of workers and employers, none can affect the wage rates.
B)one in which there is a large number of workers and employers, most can affect the wage rates.
C)one in which there is a small number of workers and employers, one can affect the wage rates.
D)one in which there is a small number of workers and employers, all can affect the wage rates.
E)none of the above.

Question 32

Use the following to answer questions :
Figure 13-1
In Figure 13-1, the income effect dominates the substitution effect for wages between:

A)$4 and $9.50.
B)$2 and $5.
C)$2 and $6.
D)$6 and $10.
E)none of the above.

Question 33

The control of entry by unions causes higher wage rates by

A)moving the equilibrium point up the labor supply curve.
B)changing the elasticity of the labor supply curve.
C)shifting the labor supply curve to the left.
D)the indeterminacy of collective bargaining.
E)shifting the labor supply curve to the right.

Question 34

Use the following to answer questions :
Figure 13-3
If the demand curve in Figure 13-3 shifts to D', the marginal revenue product has:

A)increased by $4 for every unit.
B)increased by $4 only at equilibrium.
C)decreased by $4 for every unit.
D)decreased by $4 only at equilibrium.
E)none of the above.

Question 35

Suppose the United Steel Workers Union succeeds in raising wages in the steel industry.Employment in the steel industry will then tend to drop a good deal if, other things being equal:

A)employers increase prices and the demand for steel is elastic.
B)the higher wages lead to commensurably lower unit costs.
C)labor cost is a relatively small percentage of the final cost of steel.
D)the possibilities of substituting capital for labor are low for technical reasons.
E)employers hold the line on prices and the demand for steel is elastic.

Question 36

Use the following to answer questions :
Figure 13-1
At a wage rate of $7 in Figure 13-1, what is income?

A)$24.5
B)$35
C)$56
D)$63
E)none of the above

Question 37

Use the following to answer questions :
Figure 13-2
In Figure 13-2, how much labor would be supplied in the market for black male jobs once discrimination disappeared?

A)0
B)3
C)6
D)8.67
E)none of the above

Question 38

Use the following to answer questions :
Figure 13-3
In Figure 13-3, along curve D, the marginal revenue product of the 6th unit of labor is:

A)14.
B)12.
C)10.
D)8.
E)It can't be determined from the information given.

Question 39

If the wage rate in the figure below is originally pegged at $16, with 3000 unemployed workers, wage competition will eventually cause the level of employment to shift to:

A)3,000.
B)5,000.
C)6,000.
D)10,000.
E)none of the above.

Question 40

Use the following to answer questions :
Figure 13-2
If blacks are discriminated against, as in Figure 13-2, how much are their wages depressed by discrimination, compared with what they could earn if discrimination did not exist?

A)$8
B)$6
C)$5.50
D)$4
E)none of the above

Question 41

Unions have favored immigration restrictions because these laws tend to push up wages.

Question 42

The labor force participation rate for women in the United States has, just as in many parts of the western world, increased over the past two decades.

Question 43

Since the demand for labor is a derived demand, any change in general wages will not shift the general demand curve for labor.

Question 44

American workers enjoy higher wages while working fewer hours.

Question 45

If all jobs and all people are identical in a perfectly competitive labor market, competition will cause the hourly wage rates to be exactly the same.

Question 46

One key to wage disparities lies in the qualitative differences among people.

Question 47

According to real wages, American workers today are far better off than they were 100 years ago.

Question 48

A tax on wages always increases employment because people are forced to work more to achieve the same after-tax, take-home pay.

Question 49

Capital, education levels, technology levels, and civil strife have a major affect on supply and demand.

Question 50

Rapid population growth tends to improve the economic status of the average worker compared to that of the owner of capital.

Question 51

The drop in the wages paid to privileged workers can be expected when discrimination is eliminated because of an increase in the supply of labor.

Question 52

For a person on the backward-bending part of his labor supply curve, the "substitution effect" is weaker than the "income effect."

Question 53

Because each hour of work is better paid today, each hour of leisure is more expensive.

Question 54

Higher wages will tend to eliminate excess demand in labor markets.

Question 55

Nominal wages determine how much labor is supplied to the economy.

Question 56

Wage incomes sometimes contain rent elements.

Question 57

The labor demand curve shifts up and out over time with capital accumulation, technological advance, and improvements in labor quality.

Question 58

A change in technology can increase the marginal product of labor.

Question 59

The law of diminishing returns helps explain why a union may fight for a shorter working week.

Question 60

The demand for labor is determined by its marginal productivity in producing national output.

Question 61

Figure 13-6
In Figure 13-6, if unions succeed in raising the standard wage rate to w*, there will be 200 people who want to work but can't find jobs at that wage rate.

Question 62

The law of supply and demand suggests that laws limiting immigration into the United States will raise real wage rates here.

Question 63

Wage differentials that serve to compensate for the relative attractiveness, or nonmonetary differences, among jobs are called compensating differentials.

Question 64

All imperfections in the labor market are attributable, ultimately, to the existence of trade unions.

Question 65

The demand for labor usually increases as the demand for the final product increases.

Question 66

The concept of a downward-sloping demand curve cannot be applied to all labor in the same way that it can be applied to any one small grade of labor.

Question 67

The price of labor is one of the most important factor prices in the U.S.economy.

Question 68

Real wages have been constant in the United States over the past 70 years or more.

Question 69

Use the following to answer questions :
Figure 13-5
The higher wages in plant B in Figure 13-5, assuming no unions or discrimination and that the jobs in plants A and B are equivalent except for different working conditions, are due to compensating differentials.

Question 70

Use the following to answer questions :
Figure 13-4
If, in Figure 13-4 the employer increases all wages to $8, there are no workers who wish to work at a wage of $8 who can't get work.

Question 71

The investment in a college education appears to pay off for most people.

Question 72

Use the following to answer questions :
Figure 13-5
In Figure 13-5, if the jobs in plants A and B were equivalent except working conditions were different in the two plants, plant B must be the plant with worse working conditions.

Question 73

In the figure below, the income effect of a change in w outweighs the substitution effect in the supply of labor.

Question 74

If I used to work 40 hours a week at $7 an hour and now I work 35 hours a week at $8 an hour, the substitution effect outweighs the income effect for me.

Question 75

If a minimum wage were specified below the equilibrium wage in a given market, then the minimum wage would certainly reduce employment in that market.

Question 76

Unions have fought immigration restrictions primarily because many of their members are themselves immigrants.

Question 77

Use the following to answer questions :
Figure 13-4
Figure 13-4 depicts two different labor markets for the same employer.Assuming no discrimination by the employer, the higher wages paid to workers in market A are because there is a smaller supply of workers in market A.

Question 78

The theory of "noncompeting groups in the labor market" ignores the partial substitutability of workers of different skills.

Question 79

Under no circumstances will an elimination of discrimination cause the wage paid to anyone in related labor markets to fall.

Question 80

An increase in the labor supply tends to lead to a decrease in the marginal product of employed labor.