Question 1

Labor unions in the United States

Accepted Answer

A)  tend to be more outspoken politically than those in Europe. 
B)  have experienced steady declines in membership since the 1950s. 
C)  tend to be more powerful in deregulated industries (for example, airlines) than in regulated industries. 
D)  universally support socialist principles. 
A)  tend to be more outspoken politically than those in Europe. 
B)  have experienced steady declines in membership since the 1950s. 
C)  tend to be more powerful in deregulated industries (for example, airlines) than in regulated industries. 
D)  universally support socialist principles.

Question 2

Under what conditions is it likely that the labor supply curve may become backward bending? What roles do the income and substitution effects play?

Accepted Answer

The labor supply curve is based on the w

Question 3

The relationship between professional basketball players and the owners' association is an example of a bilateral monopoly.

Accepted Answer

A) True 
 B)False

Question 4

The salary of an athlete like Peyton Manning is in part a reward for his unique ability-something economists call economic rent.

Accepted Answer

A) True 
 B)False

Question 5

The substitution effect makes workers want to work less when the wage increases.

Accepted Answer

A) True 
 B)False

Question 6

What percentage of American workers now belong to labor unions?

Accepted Answer

A)  less than 20 percent 
B)  about 40 percent 
C)  about 60 percent 
D)  more than 80 percent 
A)  less than 20 percent 
B)  about 40 percent 
C)  about 60 percent 
D)  more than 80 percent

Question 7

Which of the following makes invention and entrepreneurship more likely in today's economy?

Accepted Answer

A)  increasing morality of inventors 
B)  government rules within society 
C)  positive marginal costs 
D)  positive marginal revenues 
A)  increasing morality of inventors 
B)  government rules within society 
C)  positive marginal costs 
D)  positive marginal revenues

Question 8

The demand for education is determined by the

Accepted Answer

A)  demand for human capital. 
B)  demand for nonhuman capital. 
C)  supply of human capital. 
D)  supply of nonhuman capital. 
A)  demand for human capital. 
B)  demand for nonhuman capital. 
C)  supply of human capital. 
D)  supply of nonhuman capital.

Question 9

Teenage unemployment rates tend to be substantially higher than the overall unemployment rate.

Accepted Answer

A) True 
 B)False

Question 10

Statistical studies in the United States have reached the conclusion that for most workers the response of labor supply to wage changes is

Accepted Answer

A)  quite strong. 
B)  not very strong. 
C)  inverted. 
D)  always zero. 
A)  quite strong. 
B)  not very strong. 
C)  inverted. 
D)  always zero.

Question 11

Currently, college graduates are earning about ____ percent more than high school grads.

Accepted Answer

A)  100 
B)  50 
C)  25 
D)  10 
A)  100 
B)  50 
C)  25 
D)  10

Question 12

Among possible union strategies, the one that can both raise wages and add to employment is

Accepted Answer

A)  restricting the supply of workers. 
B)  raising the demand curve for the product or for labor. 
C)  fixing the wage. 
D)  striking frequently. 
A)  restricting the supply of workers. 
B)  raising the demand curve for the product or for labor. 
C)  fixing the wage. 
D)  striking frequently.

Question 13

Union members earn about the same wage level as nonunion members in the same industry.

Accepted Answer

A) True 
 B)False

Question 14

The wages of professional athletes

Accepted Answer

A)  are related to demand for their services. 
B)  include substantial economic rents. 
C)  are high because of scarcity. 
D)  All of the above are true. 
A)  are related to demand for their services. 
B)  include substantial economic rents. 
C)  are high because of scarcity. 
D)  All of the above are true.

Question 15

The relationship between the quantity of labor supplied and the wage is governed by an income effect and a substitution effect.

Accepted Answer

A) True 
 B)False

Question 16

The income effect of a wage increase is expected to increase

Accepted Answer

A)  supply of labor. 
B)  supply of goods and services. 
C)  demand for leisure. 
D)  demand for labor. 
A)  supply of labor. 
B)  supply of goods and services. 
C)  demand for leisure. 
D)  demand for labor.

Question 17

Inventions like gunpowder and the wheelbarrow were created by the Chinese hundreds of years ago.The fact that such items were not put to productive use was caused primarily by a lack of ____.

Accepted Answer

A)  financial capital 
B)  entrepreneurship 
C)  an adequate price system 
D)  marginal analysis 
A)  financial capital 
B)  entrepreneurship 
C)  an adequate price system 
D)  marginal analysis

Question 18

Explain the theory of investment in human capital and the specific role that education plays in the theory.

Accepted Answer

The central view of human capital theory

Question 19

A labor union is an organization representing workers in negotiations with employers over wages, benefits, and working conditions.

Accepted Answer

A) True 
 B)False

Question 20

Money spent on college tuition is considered human capital by economists.

Accepted Answer

A) True 
 B)False

Exam 20: Labor and Entrepreneurship: The Human Inputs

Labor unions in the United States

Under what conditions is it likely that the labor supply curve may become backward bending? What roles do the income and substitution effects play?

The relationship between professional basketball players and the owners' association is an example of a bilateral monopoly.

The salary of an athlete like Peyton Manning is in part a reward for his unique ability-something economists call economic rent.

The substitution effect makes workers want to work less when the wage increases.

What percentage of American workers now belong to labor unions?

Which of the following makes invention and entrepreneurship more likely in today's economy?

The demand for education is determined by the

Teenage unemployment rates tend to be substantially higher than the overall unemployment rate.

Statistical studies in the United States have reached the conclusion that for most workers the response of labor supply to wage changes is

Currently, college graduates are earning about ____ percent more than high school grads.

Among possible union strategies, the one that can both raise wages and add to employment is

Union members earn about the same wage level as nonunion members in the same industry.

The wages of professional athletes

The relationship between the quantity of labor supplied and the wage is governed by an income effect and a substitution effect.

The income effect of a wage increase is expected to increase

Inventions like gunpowder and the wheelbarrow were created by the Chinese hundreds of years ago.The fact that such items were not put to productive use was caused primarily by a lack of ____.

Explain the theory of investment in human capital and the specific role that education plays in the theory.

A labor union is an organization representing workers in negotiations with employers over wages, benefits, and working conditions.

Money spent on college tuition is considered human capital by economists.

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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