Question 1

The United Mine Workers' union is a(n) ____ union.

Accepted Answer

A) guild 
B) service 
C) craft 
D) social 
E) industrial 
A) guild 
B) service 
C) craft 
D) social 
E) industrial

Question 2

Discrimination in the labor market cannot be addressed by the standard tools of supply and demand.

Accepted Answer

A) True 
 B)False

Question 3

The measure of workers' pay is affected by the interval of time over which workers are paid.

Accepted Answer

A) True 
 B)False

Question 4

The claim that unions help improve productivity is the same as the claim that they

Accepted Answer

A) increase the demand for labor. 
B) decrease the demand for labor. 
C) increase the supply of labor. 
D) decrease the supply of labor. 
E) increase both the supply of and demand for labor. 
A) increase the demand for labor. 
B) decrease the demand for labor. 
C) increase the supply of labor. 
D) decrease the supply of labor. 
E) increase both the supply of and demand for labor.

Question 5

If leisure is a normal good, then an increase in income will

Accepted Answer

A) decrease the time allocated to work but increase the time allocated to leisure. 
B) increase the time allocated to work but decrease the time allocated to leisure. 
C) not change the time allocated to work or leisure. 
D) increase the time allocated to both work and leisure. 
E) decrease the time allocated to both work and leisure. 
A) decrease the time allocated to work but increase the time allocated to leisure. 
B) increase the time allocated to work but decrease the time allocated to leisure. 
C) not change the time allocated to work or leisure. 
D) increase the time allocated to both work and leisure. 
E) decrease the time allocated to both work and leisure.

Question 6

Weekly earnings for the average worker have increased at the same rate as hourly earnings.

Accepted Answer

A) True 
 B)False

Question 7

Labor unions raise wages by restricting labor demand.

Accepted Answer

A) True 
 B)False

Question 8

A piece-rate contract is a labor contract in which a worker is

Accepted Answer

A) promised a given percentage increase in wage every year. 
B) told how many pieces he or she must produce each day. 
C) guaranteed a piece of the company profits. 
D) paid according to a complicated formula involving the interest rate. 
E) paid a given amount for each unit of output he or she produces. 
A) promised a given percentage increase in wage every year. 
B) told how many pieces he or she must produce each day. 
C) guaranteed a piece of the company profits. 
D) paid according to a complicated formula involving the interest rate. 
E) paid a given amount for each unit of output he or she produces.

Question 9

Exhibit 13-5  
-Refer to Exhibit 13-5. If the wage is regulated at W3, then a labor

Accepted Answer

A) surplus of L5 - L1 occurs. 
B) surplus of L4 - L2 occurs. 
C) equilibrium occurs. 
D) shortage of L5 -0 L1 occurs. 
E) shortage of L4 -L2 occurs. 
A) surplus of L5 - L1 occurs. 
B) surplus of L4 - L2 occurs. 
C) equilibrium occurs. 
D) shortage of L5 -0 L1 occurs. 
E) shortage of L4 -L2 occurs.

Question 10

Since 1990, real wages in the United States have been declining.

Accepted Answer

A) True 
 B)False

Question 11

Funny Farm is a 400-acre profit-maximizing farm that produces wheat. The wheat industry is competitive and the price of wheat is $5 per bushel. The relationship between the number of workers the farm hires and the production of wheat is shown in the table below.

Accepted Answer

The answer of Funny Farm is a 400-acre profit-maximizing farm...

Question 12

Exhibit 13-5  
-Refer to Exhibit 13-5. If this figure represents a low-skilled labor market, a minimum wage would be illustrated by

Accepted Answer

A) None of the wages illustrates a minimum wage. 
B) W3. 
C) W2. 
D) W1. 
E) the origin. 
A) None of the wages illustrates a minimum wage. 
B) W3. 
C) W2. 
D) W1. 
E) the origin.

Question 13

What are the two effects that determine labor/leisure choice, and which one is weak in the short run but stronger in the long run?

Accepted Answer

The two effects are the substi

Question 14

Discrimination is so costly that it is not a problem in capitalist systems.

Accepted Answer

A) True 
 B)False

Question 15

Unions can cause their wages to be high and nonunion wages to be low by

Accepted Answer

A) restricting membership to high-school graduates. 
B) restricting the supply of labor in unionized industries. 
C) getting state governments to pass laws setting wages. 
D) requiring nonmembers to have jobs before they can join the union. 
E) restricting the demand for labor in unionized industries. 
A) restricting membership to high-school graduates. 
B) restricting the supply of labor in unionized industries. 
C) getting state governments to pass laws setting wages. 
D) requiring nonmembers to have jobs before they can join the union. 
E) restricting the demand for labor in unionized industries.

Question 16

The nominal wage

Accepted Answer

A) does not account for inflation. 
B) reflects actual buying power. 
C) is expressed in dollars, whereas the real wage is not. 
D) is the amount of money one actually receives after taxes. 
E) measures productivity. 
A) does not account for inflation. 
B) reflects actual buying power. 
C) is expressed in dollars, whereas the real wage is not. 
D) is the amount of money one actually receives after taxes. 
E) measures productivity.

Question 17

The market demand for labor is obtained by

Accepted Answer

A) multiplying the quantity of labor demanded by a single firm at every wage rate by the number of firms minus 1. 
B) summing the prices firms are willing to pay for each quantity of labor. 
C) multiplying the quantities of labor demanded by each firm at each wage rate. 
D) summing the quantities of labor demanded by each firm at each wage rate. 
E) dividing the quantities of labor demanded by each firm at each wage rate. 
A) multiplying the quantity of labor demanded by a single firm at every wage rate by the number of firms minus 1. 
B) summing the prices firms are willing to pay for each quantity of labor. 
C) multiplying the quantities of labor demanded by each firm at each wage rate. 
D) summing the quantities of labor demanded by each firm at each wage rate. 
E) dividing the quantities of labor demanded by each firm at each wage rate.

Question 18

Since 1950, the ratio of working women to the female population--the female labor participation rate--as increased steadily over time. How can you explain the fact that more and more women are working outside the home while paying others to babysit their children at home?

Accepted Answer

Babysitting children includes the opport

Question 19

People often complain that sanitation workers are overpaid based on their level of education. Use the idea of compensating differentials to explain why sanitation workers' wages are relatively high.

Accepted Answer

Their wages could be efficiency wages, s

Question 20

Bilateral monopoly occurs when monopolies in two different industries try to enter each other's industries.

Accepted Answer

A) True 
 B)False

Exam 13: Labor Markets

The United Mine Workers' union is a(n) ____ union.

Discrimination in the labor market cannot be addressed by the standard tools of supply and demand.

The measure of workers' pay is affected by the interval of time over which workers are paid.

The claim that unions help improve productivity is the same as the claim that they

If leisure is a normal good, then an increase in income will

Weekly earnings for the average worker have increased at the same rate as hourly earnings.

Labor unions raise wages by restricting labor demand.

A piece-rate contract is a labor contract in which a worker is

Exhibit 13-5 -Refer to Exhibit 13-5. If the wage is regulated at W3, then a labor

Since 1990, real wages in the United States have been declining.

Funny Farm is a 400-acre profit-maximizing farm that produces wheat. The wheat industry is competitive and the price of wheat is $5 per bushel. The relationship between the number of workers the farm hires and the production of wheat is shown in the table below.

Exhibit 13-5 -Refer to Exhibit 13-5. If this figure represents a low-skilled labor market, a minimum wage would be illustrated by

What are the two effects that determine labor/leisure choice, and which one is weak in the short run but stronger in the long run?

Discrimination is so costly that it is not a problem in capitalist systems.

Unions can cause their wages to be high and nonunion wages to be low by

The nominal wage

The market demand for labor is obtained by

Since 1950, the ratio of working women to the female population--the female labor participation rate--as increased steadily over time. How can you explain the fact that more and more women are working outside the home while paying others to babysit their children at home?

People often complain that sanitation workers are overpaid based on their level of education. Use the idea of compensating differentials to explain why sanitation workers' wages are relatively high.

Bilateral monopoly occurs when monopolies in two different industries try to enter each other's industries.

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

Filters

Exhibit 13-5 -Refer to Exhibit 13-5. If the wage is regulated at W₃, then a labor