Question 1

Which one of the following groups had the lowest incidence of poverty in 2010?

Accepted Answer

A) married couples 
B) Asian households 
C) 65 years of age and older 
D) female-headed households 
A) married couples 
B) Asian households 
C) 65 years of age and older 
D) female-headed households

Question 2

Table 17.4
-Refer to Table 17.4.Suppose the firm is hiring only one worker when the wage rate is $12 and the output price is $2.Which of the following is true?

Accepted Answer

A) The firm is maximizing profit. 
B) The firm is incurring a loss and should hire less labor. 
C) The firm could increase its profit by hiring more labor. 
D) The wage rate will fall. 
A) The firm is maximizing profit. 
B) The firm is incurring a loss and should hire less labor. 
C) The firm could increase its profit by hiring more labor. 
D) The wage rate will fall.

Question 3

Floor Lamp Inc.is a perfectly competitive firm that currently employs 100 workers.The marginal revenue product of the 90th worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profits,this firm should:

Accepted Answer

A) increase employment until the MRP of labor equals $8.00. 
B) continue hiring 100 workers because the firm earns a surplus of $1.00 on each worker hired. 
C) decrease employment until the MRP of labor equals $8.00. 
D) increase the price of lamps so that the marginal revenue product increases to $8.00 per hour. 
A) increase employment until the MRP of labor equals $8.00. 
B) continue hiring 100 workers because the firm earns a surplus of $1.00 on each worker hired. 
C) decrease employment until the MRP of labor equals $8.00. 
D) increase the price of lamps so that the marginal revenue product increases to $8.00 per hour.

Question 4

The official poverty line in the U.S.is determined by a minimum food budget times five.

Accepted Answer

A) True 
 B)False

Question 5

Comment on the following statement: "An increase in the wage always leads to an increase in the quantity of labor supplied."

Accepted Answer

The statement is false.If the substituti

Question 6

Which of the following does NOT affect incentives to work?

Accepted Answer

A) base cash payment 
B) college premium 
C) benefit reduction rate for income earned 
D) All of the above affect incentives to work. 
A) base cash payment 
B) college premium 
C) benefit reduction rate for income earned 
D) All of the above affect incentives to work.

Question 7

The poverty rate for elderly has fallen since 1959 largely due to:

Accepted Answer

A) more elderly workers. 
B) Social Security benefits. 
C) elderly people working longer. 
D) better educational institutions. 
A) more elderly workers. 
B) Social Security benefits. 
C) elderly people working longer. 
D) better educational institutions.

Question 8

Economists say that labor demand is a derived demand because:

Accepted Answer

A) it does not come from competitive markets. 
B) it depends on the demand for products that workers produce. 
C) it is derived from nature. 
D) it is derived from production. 
A) it does not come from competitive markets. 
B) it depends on the demand for products that workers produce. 
C) it is derived from nature. 
D) it is derived from production.

Question 9

A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market.The market price of soybeans is $1 a bushel,the wage rate is $12,the farmer employs six workers and the marginal product of the sixth worker is 10.What would you advise this farmer to do?

Accepted Answer

A) Do nothing because the wage rate and the marginal product of the last worker hired are equal. 
B) Reduce employment because the wage paid is greater than the marginal revenue product. 
C) Increase employment because the wage paid is less than the marginal revenue product. 
D) Increase the product price so that the wage and marginal revenue product will be equal. 
A) Do nothing because the wage rate and the marginal product of the last worker hired are equal. 
B) Reduce employment because the wage paid is greater than the marginal revenue product. 
C) Increase employment because the wage paid is less than the marginal revenue product. 
D) Increase the product price so that the wage and marginal revenue product will be equal.

Question 10

The tendency of firms to substitute away from a factor whose relative price has risen and toward a factor whose relative price has fallen is called the:

Accepted Answer

A) input-substitution effect. 
B) derived demand effect. 
C) diminishing returns effect. 
D) output effect. 
A) input-substitution effect. 
B) derived demand effect. 
C) diminishing returns effect. 
D) output effect.

Question 11

A firm's short-run demand curve for labor is:

Accepted Answer

A) upward sloping. 
B) the marginal revenue product curve. 
C) the downward-sloping portion of the marginal cost curve. 
D) the marginal cost divided by price. 
A) upward sloping. 
B) the marginal revenue product curve. 
C) the downward-sloping portion of the marginal cost curve. 
D) the marginal cost divided by price.

Question 12

Table 17.2
-Refer to Table 17.2.If the wage per day is $100,this T-shirt manufacturer will be maximizing profits if he hires ________ employees.

Accepted Answer

A) two 
B) three 
C) four 
D) five 
A) two 
B) three 
C) four 
D) five

Question 13

-Refer to Figure 17.1.This firm is currently hiring 16 workers.This firm should:

Accepted Answer

A) do nothing because it is maximizing profits. 
B) reduce employment to 15 workers to increase profits. 
C) reduce employment to 14 workers to increase profits. 
D) increase employment to 17 workers to increase profits. 
A) do nothing because it is maximizing profits. 
B) reduce employment to 15 workers to increase profits. 
C) reduce employment to 14 workers to increase profits. 
D) increase employment to 17 workers to increase profits.

Question 14

Employment and the minimum wage are positively correlated.

Accepted Answer

A) True 
 B)False

Question 15

If the price of labor falls:

Accepted Answer

A) we can conclude that the demand for capital will always decrease because only the input-substitution effect is relevant. 
B) we can conclude that the demand for capital will always increase because only the output effect is relevant. 
C) the change in the demand for capital cannot be predicted because the input-substitution effect and output effect work in opposite directions. 
D) the demand for capital will be unaffected,because only a change in the price of capital would change the demand for capital. 
A) we can conclude that the demand for capital will always decrease because only the input-substitution effect is relevant. 
B) we can conclude that the demand for capital will always increase because only the output effect is relevant. 
C) the change in the demand for capital cannot be predicted because the input-substitution effect and output effect work in opposite directions. 
D) the demand for capital will be unaffected,because only a change in the price of capital would change the demand for capital.

Question 16

Table 17.3
-Refer to Table 17.3.If the market price of the product is $5 and the wage rate is $40,the firm should hire ________ workers.

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5 
A) 2 
B) 3 
C) 4 
D) 5

Question 17

Dogger's Snowboard Shop hires workers for the holidays.Marginal product of the last worker hired is three.Marginal revenue product of the last worker is $450.Assuming one price,what is the price of Dogger's snowboards?

Accepted Answer

Snowboards

Question 18

Firms in a competitive labor market will employ labor up to the point where:

Accepted Answer

A) the wage rate equals the productivity of capital. 
B) its marginal cost equals its marginal product. 
C) the wage equals its marginal revenue product. 
D) the wage equals its marginal product. 
A) the wage rate equals the productivity of capital. 
B) its marginal cost equals its marginal product. 
C) the wage equals its marginal revenue product. 
D) the wage equals its marginal product.

Question 19

Wages are higher in occupations that are considered dangerous.Which of the following job features would lead to a higher pay?

Accepted Answer

A) night shift 
B) mental stress 
C) noisy environment 
D) all of these 
A) night shift 
B) mental stress 
C) noisy environment 
D) all of these

Question 20

Recall the application about the beauty premium with respect to wages.Which of the following is a factor in the beauty premium?

Accepted Answer

A) Some workers and customers like dealing with attractive people. 
B) Beautiful people get more opportunities to learn through experience. 
C) Attractive people demand higher wages because of their greater potential. 
D) A and B are correct. 
A) Some workers and customers like dealing with attractive people. 
B) Beautiful people get more opportunities to learn through experience. 
C) Attractive people demand higher wages because of their greater potential. 
D) A and B are correct.

Which one of the following groups had the lowest incidence of poverty in 2010?

Table 17.4 -Refer to Table 17.4.Suppose the firm is hiring only one worker when the wage rate is $12 and the output price is $2.Which of the following is true?

Floor Lamp Inc.is a perfectly competitive firm that currently employs 100 workers.The marginal revenue product of the 90th worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profits,this firm should:

The official poverty line in the U.S.is determined by a minimum food budget times five.

Comment on the following statement: "An increase in the wage always leads to an increase in the quantity of labor supplied."

Which of the following does NOT affect incentives to work?

The poverty rate for elderly has fallen since 1959 largely due to:

Economists say that labor demand is a derived demand because:

The tendency of firms to substitute away from a factor whose relative price has risen and toward a factor whose relative price has fallen is called the:

A firm's short-run demand curve for labor is:

Table 17.2 -Refer to Table 17.2.If the wage per day is $100,this T-shirt manufacturer will be maximizing profits if he hires ________ employees.

-Refer to Figure 17.1.This firm is currently hiring 16 workers.This firm should:

Employment and the minimum wage are positively correlated.

If the price of labor falls:

Table 17.3 -Refer to Table 17.3.If the market price of the product is $5 and the wage rate is $40,the firm should hire ________ workers.

Dogger's Snowboard Shop hires workers for the holidays.Marginal product of the last worker hired is three.Marginal revenue product of the last worker is $450.Assuming one price,what is the price of Dogger's snowboards?

Firms in a competitive labor market will employ labor up to the point where:

Wages are higher in occupations that are considered dangerous.Which of the following job features would lead to a higher pay?

Recall the application about the beauty premium with respect to wages.Which of the following is a factor in the beauty premium?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

International Trade and Public Policy

Filters

Exam 17: The Labor Market and the Distribution of Income

Which one of the following groups had the lowest incidence of poverty in 2010?

Table 17.4 -Refer to Table 17.4.Suppose the firm is hiring only one worker when the wage rate is $12 and the output price is $2.Which of the following is true?

Floor Lamp Inc.is a perfectly competitive firm that currently employs 100 workers.The marginal revenue product of the 90th worker is $7.00 per hour.The wage rate is $8.00 per hour.To increase profits,this firm should:

The official poverty line in the U.S.is determined by a minimum food budget times five.

Comment on the following statement: "An increase in the wage always leads to an increase in the quantity of labor supplied."

Which of the following does NOT affect incentives to work?

The poverty rate for elderly has fallen since 1959 largely due to:

Economists say that labor demand is a derived demand because:

The tendency of firms to substitute away from a factor whose relative price has risen and toward a factor whose relative price has fallen is called the:

A firm's short-run demand curve for labor is:

Table 17.2 -Refer to Table 17.2.If the wage per day is $100,this T-shirt manufacturer will be maximizing profits if he hires ________ employees.

-Refer to Figure 17.1.This firm is currently hiring 16 workers.This firm should:

Employment and the minimum wage are positively correlated.

If the price of labor falls:

Table 17.3 -Refer to Table 17.3.If the market price of the product is $5 and the wage rate is $40,the firm should hire ________ workers.

Dogger's Snowboard Shop hires workers for the holidays.Marginal product of the last worker hired is three.Marginal revenue product of the last worker is $450.Assuming one price,what is the price of Dogger's snowboards?

Firms in a competitive labor market will employ labor up to the point where:

Wages are higher in occupations that are considered dangerous.Which of the following job features would lead to a higher pay?

Recall the application about the beauty premium with respect to wages.Which of the following is a factor in the beauty premium?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Monopoly and Price Discrimination

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

International Trade and Public Policy

Filters