Question 1

Exhibit 13-2  
-Refer to Exhibit 13-2. The MRP curve for labor for the competitive firm is negatively sloped because

Accepted Answer

A) the firm can sell more units only at lower prices. 
B) of all the reasons listed here. 
C) the marginal product of labor curve is negatively sloped. 
D) at lower prices, the demand for labor increases. 
E) of increasing returns to labor. 
A) the firm can sell more units only at lower prices. 
B) of all the reasons listed here. 
C) the marginal product of labor curve is negatively sloped. 
D) at lower prices, the demand for labor increases. 
E) of increasing returns to labor.

Question 2

In which of the following occupations is a worker least likely to receive compensating wage differentials?

Accepted Answer

A) Economist 
B) Coal miner 
C) Offshore oil driller 
D) Firefighter 
E) Police officer 
A) Economist 
B) Coal miner 
C) Offshore oil driller 
D) Firefighter 
E) Police officer

Question 3

Which of the following statements is true?

Accepted Answer

A) The gap between the wages of college-educated workers and the wages of workers with only high-school educations has been narrowing over the past 25 years. 
B) Since the 1980s, the average pay for women has risen as a percentage of the average pay for men. 
C) Women's income as a percentage of men's has never been above 60 percent. 
D) Due to affirmative action rules, women now generally make more than men. 
E) The gap between the average pay of women and that of men has not changed much over the past 35 years. 
A) The gap between the wages of college-educated workers and the wages of workers with only high-school educations has been narrowing over the past 25 years. 
B) Since the 1980s, the average pay for women has risen as a percentage of the average pay for men. 
C) Women's income as a percentage of men's has never been above 60 percent. 
D) Due to affirmative action rules, women now generally make more than men. 
E) The gap between the average pay of women and that of men has not changed much over the past 35 years.

Question 4

The demand for automobile workers is positively related to the supply of automobiles.

Accepted Answer

A) True 
 B)False

Question 5

In competitive markets, discrimination is

Accepted Answer

A) less likely to occur, due to employer profit maximization. 
B) efficient. 
C) costless. 
D) regulated out of existence. 
E) more likely to occur than in other markets. 
A) less likely to occur, due to employer profit maximization. 
B) efficient. 
C) costless. 
D) regulated out of existence. 
E) more likely to occur than in other markets.

Question 6

Exhibit 13-4  
-The choices an individual faces in the labor supply decision are work versus income.

Accepted Answer

A) True 
 B)False

Question 7

Use a typical diagram of supply and demand for labor to represent the market for lawyers. Suppose the wage for lawyers employed by large law firms is above the equilibrium level. Depict this scenario in your diagram. Will there be a shortage or a surplus of lawyers at this wage rate? This is an inefficient situation based on the supply and demand model. Give one reason why it may persist over time.

Accepted Answer

If large law firms pay a wage higher tha

Question 8

The only way to gain human capital is to take courses from some sort of educational institution.

Accepted Answer

A) True 
 B)False

Question 9

How is demand in the labor market related to the demand for goods and services?

Accepted Answer

The demand for labor is a deri

Question 10

Exhibit 13-4  
-Refer to Exhibit 13-4. Over the segment AB of the curve,

Accepted Answer

A) the substitution effect is stronger than the income effect. 
B) income is so high that work is unnecessary. 
C) the income effect is stronger than the substitution effect. 
D) irrational behavior has set in. 
E) the income and substitution effects are evenly matched. 
A) the substitution effect is stronger than the income effect. 
B) income is so high that work is unnecessary. 
C) the income effect is stronger than the substitution effect. 
D) irrational behavior has set in. 
E) the income and substitution effects are evenly matched.

Question 11

Exhibit 13-1  
-In order to calculate marginal revenue product for a competitive firm, one may multiply marginal product by output price.

Accepted Answer

A) True 
 B)False

Question 12

The tools of supply and demand analysis can be used to explain wage differences between skilled and unskilled workers.

Accepted Answer

A) True 
 B)False

Question 13

A deferred-payment contract may be characterized by a generous retirement plan.

Accepted Answer

A) True 
 B)False

Question 14

Marginal productivity theory indicates that those with more human capital

Accepted Answer

A) come from wealthier families than their counterparts. 
B) are more highly motivated than their counterparts. 
C) work fewer hours than their counterparts. 
D) will earn higher wages than their counterparts. 
E) work more hours than their counterparts. 
A) come from wealthier families than their counterparts. 
B) are more highly motivated than their counterparts. 
C) work fewer hours than their counterparts. 
D) will earn higher wages than their counterparts. 
E) work more hours than their counterparts.

Question 15

Ph.D.'s working in academia generally are paid less than those working outside academia because

Accepted Answer

A) those in academia are less competent. 
B) the academic life has many perks and is very desirable. 
C) academics are people who were fired from the private sector. 
D) academics are not unionized. 
E) those who are in academia are poor communicators. 
A) those in academia are less competent. 
B) the academic life has many perks and is very desirable. 
C) academics are people who were fired from the private sector. 
D) academics are not unionized. 
E) those who are in academia are poor communicators.

Question 16

Over the past 30 years, real wages have

Accepted Answer

A) never fallen. 
B) not changed at all. 
C) generally increased. 
D) generally stayed the same. 
E) generally fallen. 
A) never fallen. 
B) not changed at all. 
C) generally increased. 
D) generally stayed the same. 
E) generally fallen.

Question 17

The market demand for labor is the sum of the quantity demanded of labor at all firms at every wage

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 13-2  
-Refer to Exhibit 13-2. If the wage rate is $60, the firm with the MRP should hire ____ units of labor.

Accepted Answer

A) 4 
B) 3 
C) 5 
D) 7 
E) 6 
A) 4 
B) 3 
C) 5 
D) 7 
E) 6

Question 19

Discrimination resulting in wage differences is partly a result of

Accepted Answer

A) government mandates and regulations. 
B) differences in supply of labor in different groups. 
C) competition within the capitalist system. 
D) worker preferences. 
E) the market force of supply and demand. 
A) government mandates and regulations. 
B) differences in supply of labor in different groups. 
C) competition within the capitalist system. 
D) worker preferences. 
E) the market force of supply and demand.

Question 20

Union wages are, on average, about 15 percent higher than nonunion wages.

Accepted Answer

A) True 
 B)False

Exam 13: Labor Markets

Exhibit 13-2 -Refer to Exhibit 13-2. The MRP curve for labor for the competitive firm is negatively sloped because

In which of the following occupations is a worker least likely to receive compensating wage differentials?

Which of the following statements is true?

The demand for automobile workers is positively related to the supply of automobiles.

In competitive markets, discrimination is

Exhibit 13-4 -The choices an individual faces in the labor supply decision are work versus income.

The only way to gain human capital is to take courses from some sort of educational institution.

How is demand in the labor market related to the demand for goods and services?

Exhibit 13-4 -Refer to Exhibit 13-4. Over the segment AB of the curve,

Exhibit 13-1 -In order to calculate marginal revenue product for a competitive firm, one may multiply marginal product by output price.

The tools of supply and demand analysis can be used to explain wage differences between skilled and unskilled workers.

A deferred-payment contract may be characterized by a generous retirement plan.

Marginal productivity theory indicates that those with more human capital

Ph.D.'s working in academia generally are paid less than those working outside academia because

Over the past 30 years, real wages have

The market demand for labor is the sum of the quantity demanded of labor at all firms at every wage

Exhibit 13-2 -Refer to Exhibit 13-2. If the wage rate is $60, the firm with the MRP should hire ____ units of labor.

Discrimination resulting in wage differences is partly a result of

Union wages are, on average, about 15 percent higher than nonunion wages.

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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