Question 1

The quantity demanded of labor will decrease if:

Accepted Answer

A) the price of the product that the labor produces increases. 
B) the productivity of labor increases. 
C) the price of labor rises. 
D) there is an increase in the supply of a factor labor uses.

Question 2

An increase in the demand for autoworkers may come about because of a(n):

Accepted Answer

A) decrease in the price of cars. 
B) decrease in the productivity of autoworkers. 
C) decrease in the supply of other factors that autoworkers use in production. 
D) increase in the price of cars.

Question 3

Consider the labor market for accountants.As more people earn accounting degrees,we should expect to see a(n):

Accepted Answer

A) shift to the right of the labor supply curve. 
B) shift to the right of the labor demand curve. 
C) increase in labor along a stable labor supply curve. 
D) increase in labor along a stable labor demand curve.

Question 4

Use the following to answer question:
Figure: Equilibrium in the Labor Market 
-(Figure: Equilibrium in the Labor Market)Use Figure: Equilibrium in the Labor Market.In the figure,a decrease in the price of the good produced,when everything else stays the same,will lead to a(n)_____ in the equilibrium quantity of labor and a(n)_____ in the equilibrium price of labor.

Accepted Answer

A) increase;increase 
B) decrease;increase 
C) increase;decrease 
D) decrease;decrease

Question 5

If a person's marginal utility from an additional hour of leisure is less than the marginal utility gained from goods bought with the wages earned from an additional hour of labor,then this person should:

Accepted Answer

A) continue to work the hours he or she is working. 
B) work less since he or she is working more than the optimal number of hours. 
C) work more since he or she is working less than the optimal number of hours. 
D) quit work since he or she is not earning enough to satisfy his or her time allocation.

Question 6

Although horses were once a very important factor of production,the development of automobiles and other machinery reduced the demand for their use.This example illustrates:

Accepted Answer

A) technological progress shifting the demand for horses to the left. 
B) higher marginal costs for horses shifting demand for horses to the right. 
C) technological progress shifting the demand for horses to the right. 
D) higher marginal costs for horses having no impact on the demand for horses.

Question 7

Assume that Stan just received a promotion and raise.In terms of labor supply,the substitution effect of a higher wage will lead him to:

Accepted Answer

A) supply fewer hours of labor. 
B) supply more hours of labor. 
C) substitute leisure for work. 
D) reduce work time to zero.

Question 8

Which group had the LOWEST median earnings in the U.S.labor market in 2015?

Accepted Answer

A) White men 
B) women,regardless of ethnicity 
C) African-Americans 
D) Hispanics

Question 9

Differences in talent and ability of workers resulting in differences in their wages is consistent with the marginal productivity theory of income distribution.

Accepted Answer

A) True 
 B)False

Question 10

The clearest sign of discrimination against an individual is that that individual is paid less than the value of his or her marginal productivity.

Accepted Answer

A) True 
 B)False

Question 11

Suppose that Professor Jones receives a promotion and an increase in her annual salary.Her labor supply curve will be _____ if the substitution effect is _____ than the income effect.

Accepted Answer

A) upward sloping;greater 
B) upward sloping;smaller 
C) downward sloping;greater 
D) vertical;greater

Question 12

(Scenario: The Decision to Hire Labor)Use Scenario: The Decision to Hire Labor.If this profit-maximizing firm hires two workers,what is a possible equilibrium wage rate in the labor market? Scenario: The Decision to Hire Labor
Assume that both the product market and the labor market are perfectly competitive.The price of this firm's product is $5.The firm's total product with respect to labor is given in the table that follows.

Accepted Answer

A) $30 
B) $5 
C) $13 
D) $6

Question 13

The opportunity cost of an hour of leisure is the hourly wage rate.

Accepted Answer

A) True 
 B)False

Question 14

Because the efficiency wage is _____ the equilibrium wage,it may lead to a _____ of labor.

Accepted Answer

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

Question 15

Use the following to answer question: 
-(Table: Total Product of Labor at Debbie's Bakery)Use Table: Total Product of Labor at Debbie's Bakery.Debbie can sell cakes at $10 each.If Debbie must pay each worker $40 per day,how many workers will she hire to maximize profit?

Accepted Answer

A) 3 
B) 4 
C) 5 
D) 6

Question 16

When the demand for automobiles is high,the demand for workers who build automobiles is high.This relation between the market for automobiles and the market for the labor that builds automobiles is why demand in a factor market is called:

Accepted Answer

A) the marginal productivity theory of income distribution. 
B) a compensating differential. 
C) the factor distribution of income. 
D) a derived demand.

Exam 19: Factor Markets and the Distribution of Income

The quantity demanded of labor will decrease if:

An increase in the demand for autoworkers may come about because of a(n) :

Consider the labor market for accountants.As more people earn accounting degrees,we should expect to see a(n) :

If a person's marginal utility from an additional hour of leisure is less than the marginal utility gained from goods bought with the wages earned from an additional hour of labor,then this person should:

Although horses were once a very important factor of production,the development of automobiles and other machinery reduced the demand for their use.This example illustrates:

Assume that Stan just received a promotion and raise.In terms of labor supply,the substitution effect of a higher wage will lead him to:

Which group had the LOWEST median earnings in the U.S.labor market in 2015?

Differences in talent and ability of workers resulting in differences in their wages is consistent with the marginal productivity theory of income distribution.

The clearest sign of discrimination against an individual is that that individual is paid less than the value of his or her marginal productivity.

Suppose that Professor Jones receives a promotion and an increase in her annual salary.Her labor supply curve will be _ if the substitution effect is _ than the income effect.

The opportunity cost of an hour of leisure is the hourly wage rate.

Because the efficiency wage is _ the equilibrium wage,it may lead to a _ of labor.

Use the following to answer question: -(Table: Total Product of Labor at Debbie's Bakery) Use Table: Total Product of Labor at Debbie's Bakery.Debbie can sell cakes at $10 each.If Debbie must pay each worker $40 per day,how many workers will she hire to maximize profit?

When the demand for automobiles is high,the demand for workers who build automobiles is high.This relation between the market for automobiles and the market for the labor that builds automobiles is why demand in a factor market is called: