Question 1

What are the two characteristics that are essential to economic analysis of invention?

Accepted Answer

A)  fixed-costs and public goods 
B)  fixed-costs and private goods 
C)  variable-costs and public goods 
D)  variable-costs and private goods 
A)  fixed-costs and public goods 
B)  fixed-costs and private goods 
C)  variable-costs and public goods 
D)  variable-costs and private goods

Question 2

Wages are comparatively low in markets where demand for labor is low and supply is high.

Accepted Answer

A) True 
 B)False

Question 3

The branch of economic theory that analyzes decisions about education and training is

Accepted Answer

A)  welfare economics. 
B)  equilibrium analysis. 
C)  human capital theory. 
D)  consumption theory. 
A)  welfare economics. 
B)  equilibrium analysis. 
C)  human capital theory. 
D)  consumption theory.

Question 4

A monopsony is a market situation in which there is only one seller.

Accepted Answer

A) True 
 B)False

Question 5

A monopsony is a market situation in which there is only one buyer.

Accepted Answer

A) True 
 B)False

Question 6

Some take issue with the human capital argument that employers pay more for college graduates because firms recognize the value of human capital.What are three alternative explanations for why college grads receive higher pay?

Accepted Answer

Education is a sorting device for factor

Question 7

What are the alternative views to the human capital theory with respect to the role of education?

Accepted Answer

One alternative dissenting view sees edu

Question 8

The supply curve is believed to bend backward at high wage rates because

Accepted Answer

A)  income effects outweigh substitution effects. 
B)  substitution effects outweigh income effects. 
C)  the income and substitution effects work together to create the backward bend. 
D)  leisure time is less attractive. 
A)  income effects outweigh substitution effects. 
B)  substitution effects outweigh income effects. 
C)  the income and substitution effects work together to create the backward bend. 
D)  leisure time is less attractive.

Question 9

The income effect of higher wages leads workers to want to work more.

Accepted Answer

A) True 
 B)False

Question 10

Explain how the demand for labor is determined.

Accepted Answer

The demand for labor is the downward-slo

Question 11

Innovation that improves machinery, power sources and other capital equipment will increase the demand for labor in the short run.

Accepted Answer

A) True 
 B)False

Question 12

The steam engine was first invented by

Accepted Answer

A)  Heron of Alexandria 
B)  James Wyatt 
C)  Robert Fulton 
D)  Denis Papin 
A)  Heron of Alexandria 
B)  James Wyatt 
C)  Robert Fulton 
D)  Denis Papin

Question 13

If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of

Accepted Answer

A)  the substitution effect. 
B)  the income effect. 
C)  rational expectations. 
D)  rational ignorance. 
A)  the substitution effect. 
B)  the income effect. 
C)  rational expectations. 
D)  rational ignorance.

Question 14

If the income effect of a change in the wage dominates the substitution effect, then workers will want to work more when the wage increases.

Accepted Answer

A) True 
 B)False

Question 15

Cannon Mills used to be virtually the only employer in Kannapolis, North Carolina.What is the name for a single hirer of labor, and how do wages and the number of jobs available compare to a competitive labor market?

Accepted Answer

Monopsonists hire fewer workers and pay

Question 16

The United States has had a long history of work time lost due to worker strikes.This trend has

Accepted Answer

A)  increased over time. 
B)  decreased over time. 
C)  stayed relatively constant during the past century. 
D)  been less of a problem compared to other countries such as Japan. 
A)  increased over time. 
B)  decreased over time. 
C)  stayed relatively constant during the past century. 
D)  been less of a problem compared to other countries such as Japan.

Question 17

All of the following are examples of fringe benefits except

Accepted Answer

A)  health insurance. 
B)  retirement payments. 
C)  overtime payments. 
D)  education subsidies. 
A)  health insurance. 
B)  retirement payments. 
C)  overtime payments. 
D)  education subsidies.

Question 18

The demand for labor is a derived demand.

Accepted Answer

A) True 
 B)False

Question 19

A union wants to increase its members' wages without reducing employment.Which of the following strategies might achieve that goal?

Accepted Answer

A)  setting a high minimum wage rate for its members 
B)  increasing the number of members in the union 
C)  pushing employers not to allow featherbedding of workers 
D)  training its members to work more productively 
A)  setting a high minimum wage rate for its members 
B)  increasing the number of members in the union 
C)  pushing employers not to allow featherbedding of workers 
D)  training its members to work more productively

Question 20

One of the most significant developments in labor supply in recent times is the increase in the labor force participation of married women.

Accepted Answer

A) True 
 B)False

Exam 20: Labor and Entrepreneurship: The Human Inputs

What are the two characteristics that are essential to economic analysis of invention?

Wages are comparatively low in markets where demand for labor is low and supply is high.

The branch of economic theory that analyzes decisions about education and training is

A monopsony is a market situation in which there is only one seller.

A monopsony is a market situation in which there is only one buyer.

Some take issue with the human capital argument that employers pay more for college graduates because firms recognize the value of human capital.What are three alternative explanations for why college grads receive higher pay?

What are the alternative views to the human capital theory with respect to the role of education?

The supply curve is believed to bend backward at high wage rates because

The income effect of higher wages leads workers to want to work more.

Explain how the demand for labor is determined.

Innovation that improves machinery, power sources and other capital equipment will increase the demand for labor in the short run.

The steam engine was first invented by

If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of

If the income effect of a change in the wage dominates the substitution effect, then workers will want to work more when the wage increases.

Cannon Mills used to be virtually the only employer in Kannapolis, North Carolina.What is the name for a single hirer of labor, and how do wages and the number of jobs available compare to a competitive labor market?

The United States has had a long history of work time lost due to worker strikes.This trend has

All of the following are examples of fringe benefits except

The demand for labor is a derived demand.

A union wants to increase its members' wages without reducing employment.Which of the following strategies might achieve that goal?

One of the most significant developments in labor supply in recent times is the increase in the labor force participation of married women.

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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