Question 1

How can an increase in the minimum-wage affect the restaurant industry?

Accepted Answer

A) It can create a shortage of restaurant workers. 
B) It can lead to an increase in prices for restaurant meals. 
C) It can create a surplus of restaurant workers. 
D) both B and C 
A) It can create a shortage of restaurant workers. 
B) It can lead to an increase in prices for restaurant meals. 
C) It can create a surplus of restaurant workers. 
D) both B and C

Question 2

Discrimination can affect the income that workers earn due to their race or gender.

Accepted Answer

A) True 
 B)False

Question 3

-Refer to Figure 17.2.If the equilibrium wage $12 and a new minimum wage is set at $15,then ________ hours of labor will be employed.

Accepted Answer

A) 36,000 
B) 25,000 
C) 30,000 
D) none of these 
A) 36,000 
B) 25,000 
C) 30,000 
D) none of these

Question 4

Married couples have a higher poverty rate than female-headed households.

Accepted Answer

A) True 
 B)False

Question 5

If supply is low relative to demand,then we can expect the equilibrium wage to be:

Accepted Answer

A) demand-determined. 
B) relatively high. 
C) relatively low. 
D) neither high nor low,but very volatile. 
A) demand-determined. 
B) relatively high. 
C) relatively low. 
D) neither high nor low,but very volatile.

Question 6

If a firm is maximizing profit,which of the following is true?

Accepted Answer

A) The marginal revenue product is equal to the wage rate. 
B) The marginal product of labor is equal to the average product of labor. 
C) The marginal product of labor is maximized. 
D) all of the above 
A) The marginal revenue product is equal to the wage rate. 
B) The marginal product of labor is equal to the average product of labor. 
C) The marginal product of labor is maximized. 
D) all of the above

Question 7

-Refer to Figure 17.2.If the demand for labor decreases,then equilibrium wage will ________ and equilibrium quantity of hours will ________.

Accepted Answer

A) rise;fall 
B) fall;fall 
C) rise;rise 
D) fall;rise 
A) rise;fall 
B) fall;fall 
C) rise;rise 
D) fall;rise

Question 8

Working longer hours at a more demanding job will not lead to higher income.

Accepted Answer

A) True 
 B)False

Question 9

If the hourly wage rate is above the equilibrium wage,then:

Accepted Answer

A) there is a surplus of labor. 
B) the quantity of labor demanded is equal to the quantity of labor supplied. 
C) the demand for labor will fall and the supply of labor will rise. 
D) the quantity of labor demanded will be greater than the quantity of labor supplied. 
A) there is a surplus of labor. 
B) the quantity of labor demanded is equal to the quantity of labor supplied. 
C) the demand for labor will fall and the supply of labor will rise. 
D) the quantity of labor demanded will be greater than the quantity of labor supplied.

Question 10

Table 17.2
-Refer to Table 17.2.The marginal revenue product of the fourth worker is:

Accepted Answer

A) $5. 
B) $20. 
C) $100. 
D) $475. 
A) $5. 
B) $20. 
C) $100. 
D) $475.

Question 11

Advancements in technology in the U.S.have resulted in:

Accepted Answer

A) less U.S.imports. 
B) an increase in demand for high-skilled workers. 
C) less U.S.exports. 
D) an increase in demand for low-skilled workers. 
A) less U.S.imports. 
B) an increase in demand for high-skilled workers. 
C) less U.S.exports. 
D) an increase in demand for low-skilled workers.

Question 12

Alan and Bob have the same marginal productivity of labor.Yet,Alan's wage rate is much higher than Bob's.How can this be?

Accepted Answer

Workers are paid according to marginal r

Question 13

-Refer to Figure 17.2.If the equilibrium wage $12 and a new minimum wage is set at $15,then:

Accepted Answer

A) demand will rise. 
B) quantity demanded will decrease. 
C) quantity demanded will increase. 
D) demand will fall. 
A) demand will rise. 
B) quantity demanded will decrease. 
C) quantity demanded will increase. 
D) demand will fall.

Question 14

What does a firm use to decide how much labor to hire at a particular wage?

Accepted Answer

A) marginal cost 
B) price of output 
C) marginal revenue product of labor 
D) marginal product of labor 
A) marginal cost 
B) price of output 
C) marginal revenue product of labor 
D) marginal product of labor

Question 15

Assuming that leisure is a normal good,if an individual's labor supply curve is backward bending,then the:

Accepted Answer

A) income effect outweighs the substitution effect. 
B) substitution effect outweighs the income effect. 
C) income effect and the substitution effects are equal. 
D) income effect is zero. 
A) income effect outweighs the substitution effect. 
B) substitution effect outweighs the income effect. 
C) income effect and the substitution effects are equal. 
D) income effect is zero.

Question 16

Table 17.6
-A soft pretzel shop can sell as many pretzels as it wishes at a price of $2.The production information is shown in Table 17.6.If the shop must pay $60 per worker per day,how many workers should be hired to maximize profit?

Accepted Answer

The firm will hire workers unt

Question 17

Dogger's Snowboard Shop hires workers for the holidays.Dogger's sells snowboards for $150.The marginal revenue product of the last worker hired is $450.What is the marginal product of the last worker?

Accepted Answer

Marginal p

Question 18

If the wage rate is below the equilibrium,then:

Accepted Answer

A) the supply of labor will decrease to adjust to the lower wage. 
B) the wage will be bid up by employers. 
C) many workers will be unemployed. 
D) both A and C 
A) the supply of labor will decrease to adjust to the lower wage. 
B) the wage will be bid up by employers. 
C) many workers will be unemployed. 
D) both A and C

Question 19

The market supply curve for labor is usually:

Accepted Answer

A) negatively sloped. 
B) horizontal. 
C) positively sloped. 
D) vertical. 
A) negatively sloped. 
B) horizontal. 
C) positively sloped. 
D) vertical.

Question 20

The marginal revenue product curve is:

Accepted Answer

A) upward sloping when capital and labor are substitutes. 
B) the firm's short-run demand curve for labor. 
C) likely to shift if the wage increases. 
D) all of the above 
A) upward sloping when capital and labor are substitutes. 
B) the firm's short-run demand curve for labor. 
C) likely to shift if the wage increases. 
D) all of the above

How can an increase in the minimum-wage affect the restaurant industry?

Discrimination can affect the income that workers earn due to their race or gender.

-Refer to Figure 17.2.If the equilibrium wage $12 and a new minimum wage is set at $15,then ________ hours of labor will be employed.

Married couples have a higher poverty rate than female-headed households.

If supply is low relative to demand,then we can expect the equilibrium wage to be:

If a firm is maximizing profit,which of the following is true?

-Refer to Figure 17.2.If the demand for labor decreases,then equilibrium wage will and equilibrium quantity of hours will .

Working longer hours at a more demanding job will not lead to higher income.

If the hourly wage rate is above the equilibrium wage,then:

Table 17.2 -Refer to Table 17.2.The marginal revenue product of the fourth worker is:

Advancements in technology in the U.S.have resulted in:

Alan and Bob have the same marginal productivity of labor.Yet,Alan's wage rate is much higher than Bob's.How can this be?

-Refer to Figure 17.2.If the equilibrium wage $12 and a new minimum wage is set at $15,then:

What does a firm use to decide how much labor to hire at a particular wage?

Assuming that leisure is a normal good,if an individual's labor supply curve is backward bending,then the:

Table 17.6 -A soft pretzel shop can sell as many pretzels as it wishes at a price of $2.The production information is shown in Table 17.6.If the shop must pay $60 per worker per day,how many workers should be hired to maximize profit?

Dogger's Snowboard Shop hires workers for the holidays.Dogger's sells snowboards for $150.The marginal revenue product of the last worker hired is $450.What is the marginal product of the last worker?

If the wage rate is below the equilibrium,then:

The market supply curve for labor is usually:

The marginal revenue product curve is:

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

How can an increase in the minimum-wage affect the restaurant industry?

Discrimination can affect the income that workers earn due to their race or gender.

-Refer to Figure 17.2.If the equilibrium wage $12 and a new minimum wage is set at $15,then ________ hours of labor will be employed.

Married couples have a higher poverty rate than female-headed households.

If supply is low relative to demand,then we can expect the equilibrium wage to be:

If a firm is maximizing profit,which of the following is true?

-Refer to Figure 17.2.If the demand for labor decreases,then equilibrium wage will ________ and equilibrium quantity of hours will ________.

Working longer hours at a more demanding job will not lead to higher income.

If the hourly wage rate is above the equilibrium wage,then:

Table 17.2 -Refer to Table 17.2.The marginal revenue product of the fourth worker is:

Advancements in technology in the U.S.have resulted in:

Alan and Bob have the same marginal productivity of labor.Yet,Alan's wage rate is much higher than Bob's.How can this be?

-Refer to Figure 17.2.If the equilibrium wage $12 and a new minimum wage is set at $15,then:

What does a firm use to decide how much labor to hire at a particular wage?

Assuming that leisure is a normal good,if an individual's labor supply curve is backward bending,then the:

Table 17.6 -A soft pretzel shop can sell as many pretzels as it wishes at a price of $2.The production information is shown in Table 17.6.If the shop must pay $60 per worker per day,how many workers should be hired to maximize profit?

Dogger's Snowboard Shop hires workers for the holidays.Dogger's sells snowboards for $150.The marginal revenue product of the last worker hired is $450.What is the marginal product of the last worker?

If the wage rate is below the equilibrium,then:

The market supply curve for labor is usually:

The marginal revenue product curve is:

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

-Refer to Figure 17.2.If the demand for labor decreases,then equilibrium wage will and equilibrium quantity of hours will .