Question 1

Increased productivity may occur due to union activity because

Accepted Answer

A) by definition, union workers are the most skilled in our society. 
B) unions set up training programs for their members. 
C) union activity allows workers to shape their workplaces and make them more efficient. 
D) employers demand high productivity in exchange for high wages. 
E) union members feel obligated to work hard to earn their higher wages. 
A) by definition, union workers are the most skilled in our society. 
B) unions set up training programs for their members. 
C) union activity allows workers to shape their workplaces and make them more efficient. 
D) employers demand high productivity in exchange for high wages. 
E) union members feel obligated to work hard to earn their higher wages.

Question 2

Labor is

Accepted Answer

A) exchanged in markets much like any other good or service. 
B) another term for "union." 
C) the physical effort of humans. 
D) bought and sold with little regulation. 
E) not something to which economists should apply reasoning. 
A) exchanged in markets much like any other good or service. 
B) another term for "union." 
C) the physical effort of humans. 
D) bought and sold with little regulation. 
E) not something to which economists should apply reasoning.

Question 3

Labor unions aim at raising wages for members.

Accepted Answer

A) True 
 B)False

Question 4

According to economic reasoning, if labor productivity increases by 3 percent per year,

Accepted Answer

A) the number of jobs should increase by 3 percent per year. 
B) the real wage should increase by 3 percent per year. 
C) the price level should increase by 3 percent per year. 
D) the price level should decrease by 3 percent per year. 
E) nominal wages should increase by 3 percent per year. 
A) the number of jobs should increase by 3 percent per year. 
B) the real wage should increase by 3 percent per year. 
C) the price level should increase by 3 percent per year. 
D) the price level should decrease by 3 percent per year. 
E) nominal wages should increase by 3 percent per year.

Question 5

Why do labor contracts vary so much? Would it be better to have just one type of contract?

Accepted Answer

It would not be efficient to have one ty

Question 6

The demand curve for the labor market can be derived from the demand for goods and services.

Accepted Answer

A) True 
 B)False

Question 7

Suppose a firm with some market power faces a downward-sloping demand curve for the product it produces. Given the following information on demand, complete the table and draw the resulting demand curve for labor. If the hourly wage rate is $4 per hour, how many workers will this firm hire?

Accepted Answer

@#IMG-DLM& If the hourly wage

Question 8

Exhibit 13-1  
-Refer to Exhibit 13-1. If output price is $12 and the weekly wage is $300, the marginal revenue product of the fourth worker is

Accepted Answer

A) $12. 
B) $75. 
C) $192. 
D) $18.75. 
E) $300. 
A) $12. 
B) $75. 
C) $192. 
D) $18.75. 
E) $300.

Question 9

The American Bar Association is an example of a(n)

Accepted Answer

A) industrial union. 
B) craft union. 
C) employee association. 
D) public sector. 
E) monopoly. 
A) industrial union. 
B) craft union. 
C) employee association. 
D) public sector. 
E) monopoly.

Question 10

Recently, there has been an increased demand for wind power as an alternative energy source. How will this affect the marginal product, marginal revenue product, and wages of workers in the wind power industry?

Accepted Answer

The increase in the demand and price of

Question 11

As the growth rate in productivity has declined, so has the growth rate in real wages.

Accepted Answer

A) True 
 B)False

Question 12

A compensating wage differential is a wage difference that

Accepted Answer

A) results from a monopsony. 
B) is attributable to different demands for labor. 
C) makes up for the high risks or poor working conditions of a job. 
D) leads to more risks taken on the job. 
E) results from discrimination. 
A) results from a monopsony. 
B) is attributable to different demands for labor. 
C) makes up for the high risks or poor working conditions of a job. 
D) leads to more risks taken on the job. 
E) results from discrimination.

Question 13

In a deferred-payment arrangement,

Accepted Answer

A) wages are equal to marginal revenue product at both the junior and senior levels. 
B) wages are less than marginal revenue product at both the junior and senior levels. 
C) wages are higher than marginal revenue product at both the junior and senior levels. 
D) wages are less than marginal revenue product at the junior level but higher than marginal revenue product at the senior level. 
E) wages are higher than marginal revenue product at the junior level but less than marginal revenue product at the senior level. 
A) wages are equal to marginal revenue product at both the junior and senior levels. 
B) wages are less than marginal revenue product at both the junior and senior levels. 
C) wages are higher than marginal revenue product at both the junior and senior levels. 
D) wages are less than marginal revenue product at the junior level but higher than marginal revenue product at the senior level. 
E) wages are higher than marginal revenue product at the junior level but less than marginal revenue product at the senior level.

Question 14

The sum total of knowledge and skills a person possesses is called his or her

Accepted Answer

A) human resources. 
B) intelligence 
C) personal property. 
D) human capital. 
E) education. 
A) human resources. 
B) intelligence 
C) personal property. 
D) human capital. 
E) education.

Question 15

A labor contract in which a worker is paid less than he or she is worth when young and more than he or she is worth when old is called a(n) ____ contract.

Accepted Answer

A) efficiency 
B) piece-rate 
C) fixed-wage 
D) retirement 
E) deferred-payment 
A) efficiency 
B) piece-rate 
C) fixed-wage 
D) retirement 
E) deferred-payment

Question 16

Compensating wage differentials are mainly a result of

Accepted Answer

A) discrimination against women and minorities. 
B) employer preferences. 
C) differences in supply of labor in different occupations. 
D) government mandates and regulations. 
E) differences in demand for labor in different occupations. 
A) discrimination against women and minorities. 
B) employer preferences. 
C) differences in supply of labor in different occupations. 
D) government mandates and regulations. 
E) differences in demand for labor in different occupations.

Question 17

Which of the following is true of the supply and demand curves for the labor market?

Accepted Answer

A) The supply curve slopes downward and the demand curve slopes upward. 
B) The supply curve slopes upward and the demand curve slopes downward. 
C) Both the supply curve and the demand curve slope upward. 
D) Both the supply curve and the demand curve slope downward. 
E) Both the supply curve and the demand curve are horizontal. 
A) The supply curve slopes downward and the demand curve slopes upward. 
B) The supply curve slopes upward and the demand curve slopes downward. 
C) Both the supply curve and the demand curve slope upward. 
D) Both the supply curve and the demand curve slope downward. 
E) Both the supply curve and the demand curve are horizontal.

Question 18

Economists assume that firms decide whether to hire another unit of labor based only on

Accepted Answer

A) how much the labor will produce. 
B) the cost of the labor. 
C) how much the labor's output is worth. 
D) how profits will be affected. 
E) the labor's productivity. 
A) how much the labor will produce. 
B) the cost of the labor. 
C) how much the labor's output is worth. 
D) how profits will be affected. 
E) the labor's productivity.

Question 19

Suppose an individual is paid $10 per hour for 10 years, and for the first year the price index is 1. By the tenth year the price index is 3. By how much did the real wage change over the past 10 years?

Accepted Answer

-$6.67
Real wage in the first

Question 20

Human capital can be developed through

Accepted Answer

A) self-education. 
B) all of the methods listed here. 
C) personal experience. 
D) formal education. 
E) on-the-job training. 
A) self-education. 
B) all of the methods listed here. 
C) personal experience. 
D) formal education. 
E) on-the-job training.

Exam 13: Labor Markets

Increased productivity may occur due to union activity because

Labor is

Labor unions aim at raising wages for members.

According to economic reasoning, if labor productivity increases by 3 percent per year,

Why do labor contracts vary so much? Would it be better to have just one type of contract?

The demand curve for the labor market can be derived from the demand for goods and services.

Suppose a firm with some market power faces a downward-sloping demand curve for the product it produces. Given the following information on demand, complete the table and draw the resulting demand curve for labor. If the hourly wage rate is $4 per hour, how many workers will this firm hire?

Exhibit 13-1 -Refer to Exhibit 13-1. If output price is $12 and the weekly wage is $300, the marginal revenue product of the fourth worker is

The American Bar Association is an example of a(n)

Recently, there has been an increased demand for wind power as an alternative energy source. How will this affect the marginal product, marginal revenue product, and wages of workers in the wind power industry?

As the growth rate in productivity has declined, so has the growth rate in real wages.

A compensating wage differential is a wage difference that

In a deferred-payment arrangement,

The sum total of knowledge and skills a person possesses is called his or her

A labor contract in which a worker is paid less than he or she is worth when young and more than he or she is worth when old is called a(n) ____ contract.

Compensating wage differentials are mainly a result of

Which of the following is true of the supply and demand curves for the labor market?

Economists assume that firms decide whether to hire another unit of labor based only on

Suppose an individual is paid $10 per hour for 10 years, and for the first year the price index is 1. By the tenth year the price index is 3. By how much did the real wage change over the past 10 years?

Human capital can be developed through

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

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