Question 1

A monopsonist facing many suppliers of labor will employ:

Accepted Answer

A) fewer workers than a firm operating in a perfectly competitive labor market. 
B) the same number of workers as a firm operating in a perfectly competitive labor market. 
C) more workers than a firm operating in a perfectly competitive labor market. 
D) an indeterminate number of workers. 
A) fewer workers than a firm operating in a perfectly competitive labor market. 
B) the same number of workers as a firm operating in a perfectly competitive labor market. 
C) more workers than a firm operating in a perfectly competitive labor market. 
D) an indeterminate number of workers.

Question 2

Comparable worth laws:

Accepted Answer

A) always distort market outcomes because they interfere with the price mechanism. 
B) may correct institutional biases in the labor market. 
C) are necessary even when wages are completely determined by the interaction of labor supply and labor demand. 
D) are necessary even when institutional biases do not exist. 
A) always distort market outcomes because they interfere with the price mechanism. 
B) may correct institutional biases in the labor market. 
C) are necessary even when wages are completely determined by the interaction of labor supply and labor demand. 
D) are necessary even when institutional biases do not exist.

Question 3

Supply and demand analysis can explain:

Accepted Answer

A) how much rent will accrue to a landholder and the initial set of property rights. 
B) how much rent will accrue to a landholder but not the initial set of property rights. 
C) the initial set of property rights but not how much rent will accrue to a landholder. 
D) neither the initial set of property rights nor how much rent will accrue to a landholder. 
A) how much rent will accrue to a landholder and the initial set of property rights. 
B) how much rent will accrue to a landholder but not the initial set of property rights. 
C) the initial set of property rights but not how much rent will accrue to a landholder. 
D) neither the initial set of property rights nor how much rent will accrue to a landholder.

Question 4

When the cost minimization condition is met:

Accepted Answer

A) marginal cost equals marginal revenue. 
B) the marginal products of all inputs are equal. 
C) the marginal revenue products of all inputs are equal. 
D) the ratio of marginal product to price is equal for all inputs. 
A) marginal cost equals marginal revenue. 
B) the marginal products of all inputs are equal. 
C) the marginal revenue products of all inputs are equal. 
D) the ratio of marginal product to price is equal for all inputs.

Question 5

Refer to the graphs shown.   If product demand increases from D1 to D2, causing the product price to increase, the MRP curve of firm A (a supplier of this product)will:

Accepted Answer

A) remain the same, but there will be a movement upward and to the left along MRP1. 
B) remain the same, but there will be a movement downward and to the right along MRP2. 
C) shift to the right. 
D) shift to the left. 
A) remain the same, but there will be a movement upward and to the left along MRP1. 
B) remain the same, but there will be a movement downward and to the right along MRP2. 
C) shift to the right. 
D) shift to the left.

Question 6

The marginal income tax rate is a person's tax burden as a percentage of total income.

Accepted Answer

A) True 
 B)False

Question 7

Discrimination based on characteristics that are related to job performance may be in the economic best interests of a firm.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following does Luddite reasoning get correct?

Accepted Answer

A) Historically, the demand for labor has actually increased as technology has advanced. 
B) Labor is necessary for building and maintaining machines, and so increased demand for machines increases the demand for labor. 
C) New technology tends to raise total output, leading to an increase in the demand for labor. 
D) New technology frequently causes some specialized labor skills to become obsolete. 
A) Historically, the demand for labor has actually increased as technology has advanced. 
B) Labor is necessary for building and maintaining machines, and so increased demand for machines increases the demand for labor. 
C) New technology tends to raise total output, leading to an increase in the demand for labor. 
D) New technology frequently causes some specialized labor skills to become obsolete.

Question 9

When the labor supply curve is inelastic:

Accepted Answer

A) the percentage change in the quantity of labor supplied exceeds the percentage change in the wage. 
B) the percentage change in the quantity of labor supplied is less than the percentage change in the wage. 
C) the percentage change in the quantity of labor supplied equals the percentage change in the wage. 
D) employers cannot lower wages without losing all their workers. 
A) the percentage change in the quantity of labor supplied exceeds the percentage change in the wage. 
B) the percentage change in the quantity of labor supplied is less than the percentage change in the wage. 
C) the percentage change in the quantity of labor supplied equals the percentage change in the wage. 
D) employers cannot lower wages without losing all their workers.

Question 10

The marginal revenue product of an input tends to decrease as:

Accepted Answer

A) the price of output increases. 
B) more of the input is used. 
C) the price of the input decreases. 
D) productivity increases. 
A) the price of output increases. 
B) more of the input is used. 
C) the price of the input decreases. 
D) productivity increases.

Question 11

The same year that Derek Jeter, one-time shortstop for the New York Yankees, received an annual salary of $23.2 million, the president of the United States received an annual salary of $400,000. If the president of the United States actually contributed more to society than Derek Jeter, we can conclude that:

Accepted Answer

A) factors other than marginal revenue product probably explain the salary differences. 
B) the salary differences are based entirely on marginal revenue products. 
C) there is never a relationship between marginal revenue product and pay. 
D) the markets for their respective services are perfectly competitive. 
A) factors other than marginal revenue product probably explain the salary differences. 
B) the salary differences are based entirely on marginal revenue products. 
C) there is never a relationship between marginal revenue product and pay. 
D) the markets for their respective services are perfectly competitive.

Question 12

On average, women receive ________ of the pay that men receive.

Accepted Answer

A) 100 percent 
B) between 30 and 40 percent 
C) between 50 and 60 percent 
D) between 70 and 90 percent 
A) 100 percent 
B) between 30 and 40 percent 
C) between 50 and 60 percent 
D) between 70 and 90 percent

Question 13

The focal point phenomenon:

Accepted Answer

A) explains why production tends to take place in countries that have fewer trade barriers. 
B) explains why production tends to take place in a few select countries rather than being evenly distributed across countries. 
C) argues that transportation costs make it unprofitable to locate production in other countries. 
D) argues that trade barriers force countries to locate production in other countries. 
A) explains why production tends to take place in countries that have fewer trade barriers. 
B) explains why production tends to take place in a few select countries rather than being evenly distributed across countries. 
C) argues that transportation costs make it unprofitable to locate production in other countries. 
D) argues that trade barriers force countries to locate production in other countries.

Question 14

If the productivity of labor diminishes only slowly as output increases, labor:

Accepted Answer

A) demand will most likely be inelastic. 
B) demand will most likely be elastic. 
C) supply will most likely be elastic. 
D) supply will most likely be inelastic. 
A) demand will most likely be inelastic. 
B) demand will most likely be elastic. 
C) supply will most likely be elastic. 
D) supply will most likely be inelastic.

Question 15

When the National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union, it was an example of conflict:

Accepted Answer

A) within a bilateral monopoly. 
B) within monopolistic competition. 
C) between monopsony on the employers' side and competition on the union's side. 
D) between unions and hockey fans. 
A) within a bilateral monopoly. 
B) within monopolistic competition. 
C) between monopsony on the employers' side and competition on the union's side. 
D) between unions and hockey fans.

Question 16

The same year that Derek Jeter, one-time shortstop for the New York Yankees, received an annual salary of $23.2 million, the president of the United States received an annual salary of $400,000. Based on marginal productivity theory and assuming these markets are competitive, this salary differential indicates that:

Accepted Answer

A) Derek Jeter contributed much more to society than did the president of the United States. 
B) the president of the United States contributed much more to society than did Derek Jeter. 
C) Derek Jeter and the president of the United States made equal contributions to society. 
D) the salary differential between Derek Jeter and the president of the United States indicated that their marginal productivities cannot be compared. 
A) Derek Jeter contributed much more to society than did the president of the United States. 
B) the president of the United States contributed much more to society than did Derek Jeter. 
C) Derek Jeter and the president of the United States made equal contributions to society. 
D) the salary differential between Derek Jeter and the president of the United States indicated that their marginal productivities cannot be compared.

Question 17

The labor demand curve:

Accepted Answer

A) shifts out when wages fall. 
B) shifts in when wages rise. 
C) slopes up because of the law of demand. 
D) slopes down because of the law of demand. 
A) shifts out when wages fall. 
B) shifts in when wages rise. 
C) slopes up because of the law of demand. 
D) slopes down because of the law of demand.

Question 18

Why will an increase in the marginal income tax rate likely lead to a reduction in the number of hours worked? Why will an increase in the marginal income tax rate likely lead to an increase in the number of hours worked.

Accepted Answer

An increase in the marginal income tax r

Question 19

A reduction in the supply of labor will cause wages to:

Accepted Answer

A) decrease and employment to decrease. 
B) increase and employment to decrease. 
C) increase and employment to increase. 
D) decrease and employment to increase. 
A) decrease and employment to decrease. 
B) increase and employment to decrease. 
C) increase and employment to increase. 
D) decrease and employment to increase.

Question 20

Discrimination based on individual characteristics that don't affect job performance:

Accepted Answer

A) is the hardest kind of discrimination to eliminate. 
B) is costly to a firm, and so market forces will work toward eliminating it. 
C) is not costly to a firm and thus is easy to eliminate. 
D) may be profit-maximizing in some cases. 
A) is the hardest kind of discrimination to eliminate. 
B) is costly to a firm, and so market forces will work toward eliminating it. 
C) is not costly to a firm and thus is easy to eliminate. 
D) may be profit-maximizing in some cases.

Exam 17: Work and the Labor Market

A monopsonist facing many suppliers of labor will employ:

Comparable worth laws:

Supply and demand analysis can explain:

When the cost minimization condition is met:

Refer to the graphs shown. If product demand increases from D1 to D2, causing the product price to increase, the MRP curve of firm A (a supplier of this product)will:

The marginal income tax rate is a person's tax burden as a percentage of total income.

Discrimination based on characteristics that are related to job performance may be in the economic best interests of a firm.

Which of the following does Luddite reasoning get correct?

When the labor supply curve is inelastic:

The marginal revenue product of an input tends to decrease as:

On average, women receive ________ of the pay that men receive.

The focal point phenomenon:

If the productivity of labor diminishes only slowly as output increases, labor:

When the National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union, it was an example of conflict:

The labor demand curve:

Why will an increase in the marginal income tax rate likely lead to a reduction in the number of hours worked? Why will an increase in the marginal income tax rate likely lead to an increase in the number of hours worked.

A reduction in the supply of labor will cause wages to:

Discrimination based on individual characteristics that don't affect job performance:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters

Refer to the graphs shown. If product demand increases from D₁ to D₂, causing the product price to increase, the MRP curve of firm A (a supplier of this product)will: