Question 1

Which of the following statements is true?

Accepted Answer

A)  Marginal revenue product is the extra revenue generated to the firm from the production of one more unit of output. 
B)  Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production. 
C)  The demand curve for a perfectly competitive employer is horizontal at the market wage rate. 
D)  The supply curve of labor is upward sloping because of the law of diminishing marginal productivity. 
A)  Marginal revenue product is the extra revenue generated to the firm from the production of one more unit of output. 
B)  Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production. 
C)  The demand curve for a perfectly competitive employer is horizontal at the market wage rate. 
D)  The supply curve of labor is upward sloping because of the law of diminishing marginal productivity.

Question 2

Exhibit 11-10 Labor and wage rate data $$\begin{array} { | c | c | } 
\hline \text { Labor } & \text { Wage } \
\hline 6 & \$ 12 \
7 & 13 \
8 & 14 \
9 & 15 \
10 & 16 \
\hline
\end{array}$$
-In Exhibit 11-10, the marginal factor cost of the 9th employee is:

Accepted Answer

A)  $15. 
B)  $13. 
C)  $21. 
D)  $23. 
E)  $135. 
A)  $15. 
B)  $13. 
C)  $21. 
D)  $23. 
E)  $135.

Question 3

Which of the following is the best example of an investment in human capital?

Accepted Answer

A)  on-the-job training received by an apprentice electrician 
B)  an increase in the number of hours worked per week by a worker in an unskilled laboring job 
C)  the purchase of company stock by a worker 
D)  payments into a retirement pension plan by a skilled laborer 
A)  on-the-job training received by an apprentice electrician 
B)  an increase in the number of hours worked per week by a worker in an unskilled laboring job 
C)  the purchase of company stock by a worker 
D)  payments into a retirement pension plan by a skilled laborer

Question 4

Exhibit 11-3 Labor supply curve  
-In Exhibit 11-3, the wage for the 6th employee is equal to:

Accepted Answer

A)  $18. 
B)  $36. 
C)  $3. 
D)  $108. 
E)  unable to determine with this information. 
A)  $18. 
B)  $36. 
C)  $3. 
D)  $108. 
E)  unable to determine with this information.

Question 5

Which of the following determines equilibrium wages in perfectly competitive labor markets?

Accepted Answer

A)  The government. 
B)  Monopoly employers. 
C)  Where the supply and demand of labor are equal. 
D)  The requirements of a living wage. 
A)  The government. 
B)  Monopoly employers. 
C)  Where the supply and demand of labor are equal. 
D)  The requirements of a living wage.

Question 6

For a monopsonist, the supply of labor facing the firm is:

Accepted Answer

A)  an insignificant portion of the market supply. 
B)  perfectly horizontal. 
C)  downward sloping. 
D)  the summation of each firm's demand for labor. 
E)  identical to the supply curve facing the market. 
A)  an insignificant portion of the market supply. 
B)  perfectly horizontal. 
C)  downward sloping. 
D)  the summation of each firm's demand for labor. 
E)  identical to the supply curve facing the market.

Question 7

Describe the two basic strategies of unions in increasing wage rates for their members.

Accepted Answer

Increasing demand or decreasing supply o

Question 8

If more and better technology is used for producing wheat in the United States than in a lesser-developed country, then the:

Accepted Answer

A)  MRP of the U.S. workers will be higher than the MRP of the workers in the lesser-developed country. 
B)  MRP of the U.S. workers will be lower than the MRP of the workers in the lesser-developed country. 
C)  demand for the U.S. workers will be lower than the demand for the workers in the lesser developed country. 
D)  price of wheat will be higher in the United States than in the lesser-developed country. 
E)  wages of the U.S. workers will be lower than the wages of the workers in the lesser-developed country. 
A)  MRP of the U.S. workers will be higher than the MRP of the workers in the lesser-developed country. 
B)  MRP of the U.S. workers will be lower than the MRP of the workers in the lesser-developed country. 
C)  demand for the U.S. workers will be lower than the demand for the workers in the lesser developed country. 
D)  price of wheat will be higher in the United States than in the lesser-developed country. 
E)  wages of the U.S. workers will be lower than the wages of the workers in the lesser-developed country.

Question 9

The U.S. has one of the highest unionization rates of all the industrialized countries around the world.
​

Accepted Answer

A) True 
 B)False

Question 10

A monopsony hires labor up to the point where the marginal revenue product of labor equals the wage rate.

Accepted Answer

A) True 
 B)False

Question 11

Exhibit 11-14 Labor cost data for a monopsonist $$\begin{array} { | c | c | } 
\hline \text { Wage Rate } & \begin{array} { c } 
\text { Number of } \
\text { Workers }
\end{array} \
\hline \$ 0 & 0 \
5 & 10 \
8 & 20 \
12 & 30 \
16 & 40 \
\hline
\end{array}$$
-In Exhibit 11-14, the additional labor cost per 10 workers hired when the monopsonist goes from 10 to 20 workers is:

Accepted Answer

A)  $50. 
B)  $110. 
C)  $160. 
D)  $360. 
E)  $480. 
A)  $50. 
B)  $110. 
C)  $160. 
D)  $360. 
E)  $480.

Question 12

If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:

Accepted Answer

A)  marginal factor cost is $6. 
B)  marginal factor cost is $200. 
C)  total wage cost is $1,200. 
D)  total wage cost is $7,200. 
E)  $6 wage is too high. 
A)  marginal factor cost is $6. 
B)  marginal factor cost is $200. 
C)  total wage cost is $1,200. 
D)  total wage cost is $7,200. 
E)  $6 wage is too high.

Question 13

Suppose a change in technology increases the marginal product of labor. The result is a(n):

Accepted Answer

A)  downward movement along the demand for labor curve. 
B)  rightward shift in the demand for labor curve. 
C)  leftward shift in the demand for labor curve. 
D)  upward movement along the demand for labor curve. 
A)  downward movement along the demand for labor curve. 
B)  rightward shift in the demand for labor curve. 
C)  leftward shift in the demand for labor curve. 
D)  upward movement along the demand for labor curve.

Question 14

Which of the following would be a human capital investment?

Accepted Answer

A)  On-the-job training programs. 
B)  Health care programs. 
C)  Formal education. 
D)  All of these. 
A)  On-the-job training programs. 
B)  Health care programs. 
C)  Formal education. 
D)  All of these.

Question 15

If a monopsony finds that its MRP is greater than its MFC, it:

Accepted Answer

A)  is doing the right thing to maximize profits. 
B)  should hire fewer workers to increase profits. 
C)  should hire more workers to increase profits. 
D)  should pay the workers a lower wage. 
E)  should produce less output. 
A)  is doing the right thing to maximize profits. 
B)  should hire fewer workers to increase profits. 
C)  should hire more workers to increase profits. 
D)  should pay the workers a lower wage. 
E)  should produce less output.

Question 16

If product price decreases, then:

Accepted Answer

A)  MP will increase. 
B)  MFC will increase. 
C)  MRP will increase. 
D)  MRP will decrease. 
A)  MP will increase. 
B)  MFC will increase. 
C)  MRP will increase. 
D)  MRP will decrease.

Question 17

If a monopsonist's labor supply curve is positively sloped, the marginal factor cost (MFC) will exceed the wage rate.

Accepted Answer

A) True 
 B)False

Question 18

Economists define a labor market with only one buyer to be:

Accepted Answer

A)  a monopoly. 
B)  an oligopoly. 
C)  a monopsony. 
D)  perfectly competitive. 
E)  backward bending. 
A)  a monopoly. 
B)  an oligopoly. 
C)  a monopsony. 
D)  perfectly competitive. 
E)  backward bending.

Question 19

As a percentage of nonfarm workers, union membership in the United States grew most rapidly since 1945.

Accepted Answer

A) True 
 B)False

Question 20

The labor supply curve facing an individual employer in a perfectly competitive labor market is:

Accepted Answer

A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  greater than MFC. 
E)  the MRP curve. 
A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  greater than MFC. 
E)  the MRP curve.

Which of the following statements is true?

Exhibit 11-10 Labor and wage rate data Labor Wage 6 \ 12 7 13 8 14 9 15 10 16 -In Exhibit 11-10, the marginal factor cost of the 9th employee is:

Which of the following is the best example of an investment in human capital?

Exhibit 11-3 Labor supply curve -In Exhibit 11-3, the wage for the 6th employee is equal to:

Which of the following determines equilibrium wages in perfectly competitive labor markets?

For a monopsonist, the supply of labor facing the firm is:

Describe the two basic strategies of unions in increasing wage rates for their members.

If more and better technology is used for producing wheat in the United States than in a lesser-developed country, then the:

The U.S. has one of the highest unionization rates of all the industrialized countries around the world.

A monopsony hires labor up to the point where the marginal revenue product of labor equals the wage rate.

Exhibit 11-14 Labor cost data for a monopsonist Wage Rate Number of Workers \ 0 0 5 10 8 20 12 30 16 40 -In Exhibit 11-14, the additional labor cost per 10 workers hired when the monopsonist goes from 10 to 20 workers is:

If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:

Suppose a change in technology increases the marginal product of labor. The result is a(n):

Which of the following would be a human capital investment?

If a monopsony finds that its MRP is greater than its MFC, it:

If product price decreases, then:

If a monopsonist's labor supply curve is positively sloped, the marginal factor cost (MFC) will exceed the wage rate.

Economists define a labor market with only one buyer to be:

As a percentage of nonfarm workers, union membership in the United States grew most rapidly since 1945.

The labor supply curve facing an individual employer in a perfectly competitive labor market is:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 11: Labor Markets

Which of the following statements is true?

Exhibit 11-10 Labor and wage rate data Labor Wage 6 \ 12 7 13 8 14 9 15 10 16 -In Exhibit 11-10, the marginal factor cost of the 9th employee is:

Which of the following is the best example of an investment in human capital?

Exhibit 11-3 Labor supply curve -In Exhibit 11-3, the wage for the 6th employee is equal to:

Which of the following determines equilibrium wages in perfectly competitive labor markets?

For a monopsonist, the supply of labor facing the firm is:

Describe the two basic strategies of unions in increasing wage rates for their members.

If more and better technology is used for producing wheat in the United States than in a lesser-developed country, then the:

The U.S. has one of the highest unionization rates of all the industrialized countries around the world. ​

A monopsony hires labor up to the point where the marginal revenue product of labor equals the wage rate.

Exhibit 11-14 Labor cost data for a monopsonist Wage Rate Number of Workers \ 0 0 5 10 8 20 12 30 16 40 -In Exhibit 11-14, the additional labor cost per 10 workers hired when the monopsonist goes from 10 to 20 workers is:

If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:

Suppose a change in technology increases the marginal product of labor. The result is a(n):

Which of the following would be a human capital investment?

If a monopsony finds that its MRP is greater than its MFC, it:

If product price decreases, then:

If a monopsonist's labor supply curve is positively sloped, the marginal factor cost (MFC) will exceed the wage rate.

Economists define a labor market with only one buyer to be:

As a percentage of nonfarm workers, union membership in the United States grew most rapidly since 1945.

The labor supply curve facing an individual employer in a perfectly competitive labor market is:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

The U.S. has one of the highest unionization rates of all the industrialized countries around the world.