Question 1

Exhibit 13-2  
-A competitive firm's derived demand curve is its

Accepted Answer

A) wage curve. 
B) marginal product curve. 
C) marginal revenue product curve. 
D) output demand curve divided by the wage. 
E) output demand curve. 
A) wage curve. 
B) marginal product curve. 
C) marginal revenue product curve. 
D) output demand curve divided by the wage. 
E) output demand curve.

Question 2

Briefly provide two explanations why union wages are higher than nonunion wages.

Accepted Answer

One explanation is that unions improve p

Question 3

Fringe benefits

Accepted Answer

A) are an entitlement of workers. 
B) are not earned. 
C) can be a large part of one's total pay. 
D) do not include cash bonuses. 
E) are received only by executives. 
A) are an entitlement of workers. 
B) are not earned. 
C) can be a large part of one's total pay. 
D) do not include cash bonuses. 
E) are received only by executives.

Question 4

Analyze the labor supply schedules for Mary and Anne based on the data given in the table below.

Accepted Answer

The answer of Analyze the labor supply schedules for Mary...

Question 5

Suppose a competitive firm that is profit-maximizing pays a wage of $750 per week, and the price of its output is $15 per unit. Based on this information, one may surmise that the firm's marginal revenue product is

Accepted Answer

A) 50 units. 
B) $15. 
C) $50. 
D) $750. 
E) 15 units. 
A) 50 units. 
B) $15. 
C) $50. 
D) $750. 
E) 15 units.

Question 6

An increase in a firm's marginal revenue causes a(n)

Accepted Answer

A) increase in the quantity of labor demanded by the firm. 
B) increase in the demand for labor by the firm. 
C) decrease in the demand for labor by the firm. 
D) decrease in the quantity of labor demanded by the firm. 
E) increase in the supply of labor. 
A) increase in the quantity of labor demanded by the firm. 
B) increase in the demand for labor by the firm. 
C) decrease in the demand for labor by the firm. 
D) decrease in the quantity of labor demanded by the firm. 
E) increase in the supply of labor.

Question 7

Because of the substitution effect, labor supply

Accepted Answer

A) tends to be upward-sloping. 
B) tends to be downward-sloping. 
C) tends to be vertical. 
D) has no definable shape. 
E) tends to be horizontal. 
A) tends to be upward-sloping. 
B) tends to be downward-sloping. 
C) tends to be vertical. 
D) has no definable shape. 
E) tends to be horizontal.

Question 8

Labor productivity is defined as output per hour of work.

Accepted Answer

A) True 
 B)False

Question 9

When a firm has market power, the marginal revenue product is less than the market value of the extra output produced by one more unit of labor.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is true?

Accepted Answer

A) Firms ultimately demand labor in order to make profits. 
B) Firms demand labor for the tax deduction. 
C) Labor supply shows how the quantity of labor changes with changes in working conditions. 
D) People supply labor for the enjoyment of it. 
E) As everyone must supply labor by necessity, labor demand is all that really counts in the labor market. 
A) Firms ultimately demand labor in order to make profits. 
B) Firms demand labor for the tax deduction. 
C) Labor supply shows how the quantity of labor changes with changes in working conditions. 
D) People supply labor for the enjoyment of it. 
E) As everyone must supply labor by necessity, labor demand is all that really counts in the labor market.

Question 11

Suppose a monopolist's output price is $25, its marginal revenue is $20, and its marginal product of labor is 8 per period of time. Calculate the wage-price ratio for the profit-maximizing firm.

Accepted Answer

6.4
MRP = W due to profit-maxi

Question 12

One reason that the average workweek has gotten shorter may be that

Accepted Answer

A) wage increases in recent years are more permanent. 
B) government requirements have been imposed. 
C) people work for fringe benefits instead of wages. 
D) more people work on a salary basis as opposed to receiving an hourly wage. 
E) wage increases in recent years are only temporary. 
A) wage increases in recent years are more permanent. 
B) government requirements have been imposed. 
C) people work for fringe benefits instead of wages. 
D) more people work on a salary basis as opposed to receiving an hourly wage. 
E) wage increases in recent years are only temporary.

Question 13

Suppose there is an increase in the demand for computers in a competitive market. Then, in computer production,

Accepted Answer

A) the marginal product will not change but the marginal revenue product will decrease. 
B) the marginal product will not change but the marginal revenue product will increase. 
C) both the marginal product and the marginal revenue product will increase. 
D) both the marginal product and the marginal revenue product will decrease. 
E) both the marginal product and the marginal revenue product will not change. 
A) the marginal product will not change but the marginal revenue product will decrease. 
B) the marginal product will not change but the marginal revenue product will increase. 
C) both the marginal product and the marginal revenue product will increase. 
D) both the marginal product and the marginal revenue product will decrease. 
E) both the marginal product and the marginal revenue product will not change.

Question 14

An upward-sloping individual labor supply curve indicates that the

Accepted Answer

A) income and substitution effects are of roughly equal strength. 
B) substitution effect is the only effect at work. 
C) income effect is the only effect at work. 
D) income effect is stronger than the substitution effect. 
E) substitution effect is stronger than the income effect. 
A) income and substitution effects are of roughly equal strength. 
B) substitution effect is the only effect at work. 
C) income effect is the only effect at work. 
D) income effect is stronger than the substitution effect. 
E) substitution effect is stronger than the income effect.

Question 15

Because of the income effect, labor supply

Accepted Answer

A) has no definable shape. 
B) tends to be vertical. 
C) tends to be horizontal. 
D) tends to be upward-sloping. 
E) tends to be downward-sloping. 
A) has no definable shape. 
B) tends to be vertical. 
C) tends to be horizontal. 
D) tends to be upward-sloping. 
E) tends to be downward-sloping.

Question 16

Under what circumstances can wage differences between men and women or between whites and minorities be an indication of discrimination?

Accepted Answer

Wage differences between diffe

Question 17

Most workers in the United States have a contract that

Accepted Answer

A) guarantees a minimum weekly income regardless of hours worked. 
B) fluctuates the wage even as worker productivity is fixed. 
C) fixes the wage even as worker productivity fluctuates. 
D) sets a maximum weekly income regardless of hours worked. 
E) fluctuates the wage as worker productivity fluctuates. 
A) guarantees a minimum weekly income regardless of hours worked. 
B) fluctuates the wage even as worker productivity is fixed. 
C) fixes the wage even as worker productivity fluctuates. 
D) sets a maximum weekly income regardless of hours worked. 
E) fluctuates the wage as worker productivity fluctuates.

Question 18

The only explanation for union wages being higher than nonunion wages is that unions monopolize labor and restrict labor supply.

Accepted Answer

A) True 
 B)False

Question 19

Exhibit 13-1  
-Refer to Exhibit 13-1. Suppose the profit-maximizing, competitive firm hires five workers and the output price is $15. Then the wage per week must be

Accepted Answer

A) less than $180. 
B) less than or equal to $180 but greater than $135. 
C) $135 or less. 
D) exactly $180. 
E) greater than $180. 
A) less than $180. 
B) less than or equal to $180 but greater than $135. 
C) $135 or less. 
D) exactly $180. 
E) greater than $180.

Question 20

The marginal revenue product of labor curve is an individual firm's labor demand curve.

Accepted Answer

A) True 
 B)False

Exam 13: Labor Markets

Exhibit 13-2 -A competitive firm's derived demand curve is its

Briefly provide two explanations why union wages are higher than nonunion wages.

Fringe benefits

Analyze the labor supply schedules for Mary and Anne based on the data given in the table below.

Suppose a competitive firm that is profit-maximizing pays a wage of $750 per week, and the price of its output is $15 per unit. Based on this information, one may surmise that the firm's marginal revenue product is

An increase in a firm's marginal revenue causes a(n)

Because of the substitution effect, labor supply

Labor productivity is defined as output per hour of work.

When a firm has market power, the marginal revenue product is less than the market value of the extra output produced by one more unit of labor.

Which of the following statements is true?

Suppose a monopolist's output price is $25, its marginal revenue is $20, and its marginal product of labor is 8 per period of time. Calculate the wage-price ratio for the profit-maximizing firm.

One reason that the average workweek has gotten shorter may be that

Suppose there is an increase in the demand for computers in a competitive market. Then, in computer production,

An upward-sloping individual labor supply curve indicates that the

Because of the income effect, labor supply

Under what circumstances can wage differences between men and women or between whites and minorities be an indication of discrimination?

Most workers in the United States have a contract that

The only explanation for union wages being higher than nonunion wages is that unions monopolize labor and restrict labor supply.

Exhibit 13-1 -Refer to Exhibit 13-1. Suppose the profit-maximizing, competitive firm hires five workers and the output price is $15. Then the wage per week must be

The marginal revenue product of labor curve is an individual firm's labor demand curve.

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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