Question 1

The change in total revenue associated with one additional unit of input is referred to as

Accepted Answer

A) Elasticity of labor supply. 
B) Cost efficiency. 
C) MPP. 
D) MRP. 
A) Elasticity of labor supply. 
B) Cost efficiency. 
C) MPP. 
D) MRP. D

Question 2

Jackson hates to work.He receives a great deal of enjoyment from leisure time.Jackson's elasticity of labor supply is

Accepted Answer

A) High. 
B) Low,perhaps even negative. 
C) 1. 
D) Highly negative. 
A) High. 
B) Low,perhaps even negative. 
C) 1. 
D) Highly negative. B

Question 3

Higher wage rates allow a person to reduce the hours worked without losing income.This is known as the

Accepted Answer

A) Substitution effect. 
B) Income effect. 
C) Law of diminishing marginal utility. 
D) Law of diminishing marginal leisure. 
A) Substitution effect. 
B) Income effect. 
C) Law of diminishing marginal utility. 
D) Law of diminishing marginal leisure. B

Question 4

Table 30.2 $$\begin{array} { | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Nurrber of } \
\text { stylists (per } \
\text { week) }
\end{array} & \begin{array} { c } 
\text { Total output } \
\text { (per week) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { physical } \
\text { product } \
\text { (output per } \
\text { stylist) }
\end{array} & \begin{array} { c } 
\text { Total revenue } \
\text { (dollars per } \
\text { week) }
\end{array} & \begin{array} { c } 
\text { Marginal revenue } \
\text { product (dollars } \
\text { per stylist) }
\end{array} \
\hline 0 & \text { c } & \ldots & & \ldots \
\hline 1 & 6 t & & \
\hline 2 & 80 & & \
\hline 3 & 9 d & & \
\hline 4 & 94 & & \
\hline
\end{array}$$ Table 30.2 shows how many hairstyling appointments a hair salon can schedule per week based on the number of stylists.In the spaces provided,compute the marginal physical product (MPP)of the hair stylists,total revenue,and marginal revenue product of the stylists,assuming that a hair stylist charges $60 per appointment.In Table 30.2 suppose a hairstylist is paid $700 per week.How many hairstylists should a profit-maximizing salon hire?

Accepted Answer

A) 1. 
B) 2. 
C) 3. 
D) 4. 
A) 1. 
B) 2. 
C) 3. 
D) 4.

Question 5

Kip will work fewer hours if his salary increases.For Kip,the ________ effect must outweigh the ________ effect.

Accepted Answer

A) substitution;income 
B) income;substitution 
C) income;utility 
D) utility;substitution 
A) substitution;income 
B) income;substitution 
C) income;utility 
D) utility;substitution

Question 6

Cost efficiency refers to the

Accepted Answer

A) Amount of output associated with an additional dollar spent on input. 
B) Effectiveness of labor in reducing production costs. 
C) MPP of labor divided by the product price. 
D) Ability to produce at a level of output where the wage rate is equal to or less than the MRP. 
A) Amount of output associated with an additional dollar spent on input. 
B) Effectiveness of labor in reducing production costs. 
C) MPP of labor divided by the product price. 
D) Ability to produce at a level of output where the wage rate is equal to or less than the MRP.

Question 7

Diagram a model of supply and demand for a competitive labor market with a minimum wage in effect.Identify a group that gains and a group that loses when a minimum wage is imposed.

Accepted Answer

See Figure 30.8 for the model in The Eco

Question 8

Other things being equal,which of the following would increase the market demand for labor?

Accepted Answer

A) A fall in the wage rate. 
B) An increase in the marginal productivity of labor. 
C) A decrease in the cost-effectiveness of labor relative to other inputs. 
D) A decrease in the market demand for the firm's output. 
A) A fall in the wage rate. 
B) An increase in the marginal productivity of labor. 
C) A decrease in the cost-effectiveness of labor relative to other inputs. 
D) A decrease in the market demand for the firm's output.

Question 9

If there is an increase in the number of workers who want to work as accountants,there will be a

Accepted Answer

A) Leftward shift of the labor supply curve. 
B) Rightward shift of the labor supply curve. 
C) Movement up the labor supply curve to the right. 
D) Movement down the labor supply curve to the left. 
A) Leftward shift of the labor supply curve. 
B) Rightward shift of the labor supply curve. 
C) Movement up the labor supply curve to the right. 
D) Movement down the labor supply curve to the left.

Question 10

The market supply of labor is

Accepted Answer

A) The sum of all jobs created in the economy each year. 
B) Different for each individual based on training and education levels. 
C) The total of all goods produced in the economy each year. 
D) The total quantity of labor that workers are willing and able to supply at alternative wage rates in a given period. 
A) The sum of all jobs created in the economy each year. 
B) Different for each individual based on training and education levels. 
C) The total of all goods produced in the economy each year. 
D) The total quantity of labor that workers are willing and able to supply at alternative wage rates in a given period.

Question 11

One In the News article is titled "Challenging Work and Corporate Responsibility Will Lure MBA Grads." In the headline,which of the following determinants of labor supply is most explicitly mentioned?

Accepted Answer

A) Tastes. 
B) Taxes. 
C) Prices of consumer goods. 
D) Expectations regarding prices of consumer goods. 
A) Tastes. 
B) Taxes. 
C) Prices of consumer goods. 
D) Expectations regarding prices of consumer goods.

Question 12

The law of diminishing returns states that,ceteris paribus,the

Accepted Answer

A) MPP of labor declines as additional land,raw materials,and other factors of production are employed. 
B) MPP of labor declines as the wage rate falls. 
C) MPP of labor declines as product price declines. 
D) MPP of labor declines as more of it is employed with a given quantity of other (fixed)inputs. 
A) MPP of labor declines as additional land,raw materials,and other factors of production are employed. 
B) MPP of labor declines as the wage rate falls. 
C) MPP of labor declines as product price declines. 
D) MPP of labor declines as more of it is employed with a given quantity of other (fixed)inputs.

Question 13

Democrats argue that labor demand is ________,so ________ jobs will be lost when the minimum wage is raised.

Accepted Answer

A) inelastic;few 
B) inelastic;many 
C) elastic;few 
D) elastic;many 
A) inelastic;few 
B) inelastic;many 
C) elastic;few 
D) elastic;many

Question 14

Which of the following is true about the equilibrium market wage? A.All workers are satisfied with the wage.

Accepted Answer

A) All employers are satisfied with the wage. 
B) There is no unemployment in the market at the equilibrium wage. 
C) Competitive employers have market power with respect to the equilibrium wage. 
D) All workers are satisfied with the wage. 
A) All employers are satisfied with the wage. 
B) There is no unemployment in the market at the equilibrium wage. 
C) Competitive employers have market power with respect to the equilibrium wage. 
D) All workers are satisfied with the wage.

Question 15

If the demand for alarm clocks decreases,the effect on the alarm clock job market will be to

Accepted Answer

A) Increase the demand for labor and increase equilibrium wages. 
B) Reduce the supply of labor and increase equilibrium wages. 
C) Decrease the demand for labor and reduce equilibrium wages. 
D) Have no impact on equilibrium wages. 
A) Increase the demand for labor and increase equilibrium wages. 
B) Reduce the supply of labor and increase equilibrium wages. 
C) Decrease the demand for labor and reduce equilibrium wages. 
D) Have no impact on equilibrium wages.

Question 16

If leisure activities become more attractive,there will be a

Accepted Answer

A) Rightward shift of the labor supply curve. 
B) Leftward shift of the labor supply curve. 
C) Movement up the labor supply curve to the right. 
D) Movement down the labor supply curve to the left. 
A) Rightward shift of the labor supply curve. 
B) Leftward shift of the labor supply curve. 
C) Movement up the labor supply curve to the right. 
D) Movement down the labor supply curve to the left.

Question 17

In Figure 30.1,the movement from point G to point F along the labor supply curve S1 is a result of

Accepted Answer

A) The income effect of higher wages. 
B) The substitution effect of a higher wage rate. 
C) Increased job satisfaction. 
D) A lower wage rate. 
A) The income effect of higher wages. 
B) The substitution effect of a higher wage rate. 
C) Increased job satisfaction. 
D) A lower wage rate.

Question 18

In Figure 30.2,a minimum wage of $12 will result in

Accepted Answer

A) A shortage of 32 workers. 
B) A shortage of 44 workers. 
C) A surplus of 20 workers. 
D) No shortage or surplus of workers. 
A) A shortage of 32 workers. 
B) A shortage of 44 workers. 
C) A surplus of 20 workers. 
D) No shortage or surplus of workers.

Question 19

As labor productivity increases,which of the following shifts in the labor market should occur?

Accepted Answer

A) Supply of labor should shift to the left. 
B) Demand for labor should shift to the left. 
C) Supply of labor should shift to the right. 
D) Demand for labor should shift to the right. 
A) Supply of labor should shift to the left. 
B) Demand for labor should shift to the left. 
C) Supply of labor should shift to the right. 
D) Demand for labor should shift to the right.

Question 20

If the elasticity of labor is 0.60,a 15 percent increase in the wage rate will induce a

Accepted Answer

A) 9.0 percent decrease in the quantity of labor supplied. 
B) 9.0 percent increase in the quantity of labor supplied. 
C) 4.0 percent decrease in the quantity of labor supplied. 
D) 4.0 percent increase in the quantity of labor supplied. 
A) 9.0 percent decrease in the quantity of labor supplied. 
B) 9.0 percent increase in the quantity of labor supplied. 
C) 4.0 percent decrease in the quantity of labor supplied. 
D) 4.0 percent increase in the quantity of labor supplied.

Exam 30: The Labor Market

The change in total revenue associated with one additional unit of input is referred to as

Jackson hates to work.He receives a great deal of enjoyment from leisure time.Jackson's elasticity of labor supply is

Higher wage rates allow a person to reduce the hours worked without losing income.This is known as the

Kip will work fewer hours if his salary increases.For Kip,the ________ effect must outweigh the ________ effect.

Cost efficiency refers to the

Diagram a model of supply and demand for a competitive labor market with a minimum wage in effect.Identify a group that gains and a group that loses when a minimum wage is imposed.

Other things being equal,which of the following would increase the market demand for labor?

If there is an increase in the number of workers who want to work as accountants,there will be a

The market supply of labor is

One In the News article is titled "Challenging Work and Corporate Responsibility Will Lure MBA Grads." In the headline,which of the following determinants of labor supply is most explicitly mentioned?

The law of diminishing returns states that,ceteris paribus,the

Democrats argue that labor demand is ________,so ________ jobs will be lost when the minimum wage is raised.

Which of the following is true about the equilibrium market wage? A.All workers are satisfied with the wage.

If the demand for alarm clocks decreases,the effect on the alarm clock job market will be to

If leisure activities become more attractive,there will be a

In Figure 30.1,the movement from point G to point F along the labor supply curve S1 is a result of

In Figure 30.2,a minimum wage of $12 will result in

As labor productivity increases,which of the following shifts in the labor market should occur?

If the elasticity of labor is 0.60,a 15 percent increase in the wage rate will induce a

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

Filters

Kip will work fewer hours if his salary increases.For Kip,the effect must outweigh the effect.

Democrats argue that labor demand is ,so jobs will be lost when the minimum wage is raised.

In Figure 30.1,the movement from point G to point F along the labor supply curve S₁ is a result of