Question 1

A monopsony is

Accepted Answer

A)  a market in which there is only one producer of a good or service. 
B)  a market in which there is only one producer and one consumer of a good or service. 
C)  a market in which there is only one buyer of a good or service. 
D)  a temporary situation in labor markets when prices are adjusted through the use of collective bargaining. 
A)  a market in which there is only one producer of a good or service. 
B)  a market in which there is only one producer and one consumer of a good or service. 
C)  a market in which there is only one buyer of a good or service. 
D)  a temporary situation in labor markets when prices are adjusted through the use of collective bargaining.

Question 2

The value in one year of $25 invested today at an annual interest rate of 5 percent will be

Accepted Answer

A)  $25.00. 
B)  $26.25. 
C)  $27.50. 
D)  $30.00. 
A)  $25.00. 
B)  $26.25. 
C)  $27.50. 
D)  $30.00.

Question 3

If the price of hair styling increases, then

Accepted Answer

A)  hair styling salons hire fewer workers but makes more profit. 
B)  hair stylists demand an increase in wages and the salons hire fewer workers. 
C)  the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts leftward. 
D)  the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts rightward. 
A)  hair styling salons hire fewer workers but makes more profit. 
B)  hair stylists demand an increase in wages and the salons hire fewer workers. 
C)  the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts leftward. 
D)  the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts rightward.

Question 4

In November 2008, the air traffic controllers who work at Guam became unionized. What would NOT be a way for the union to influence labor demand?

Accepted Answer

A)  Have monthly training which improves the marginal productivity of the air traffic controllers. 
B)  Support minimum wage laws. 
C)  Creating job certification which limits the number of newly certified air traffic controllers. 
D)  Lobby the government to limit who can apply to be an air traffic controller in Guam to those who are certified through the union. 
A)  Have monthly training which improves the marginal productivity of the air traffic controllers. 
B)  Support minimum wage laws. 
C)  Creating job certification which limits the number of newly certified air traffic controllers. 
D)  Lobby the government to limit who can apply to be an air traffic controller in Guam to those who are certified through the union.

Question 5

-In the above figure, the curve labeled MCL is the marginal cost of labor curve and is used in a

Accepted Answer

A)  competitive situation in which individual firms cannot influence the wage rate they must pay. 
B)  competitive situation in which skill differentials create a difference between what a firm must pay labor versus the wage at which households are willing to supply labor. 
C)  monopsony situation in which the firm can influence wages by how much labor it hires, so that the wage rate received by workers is less than the marginal cost of labor. 
D)  monopsony situation in which the firm can influence wages by how much labor it hires, so that the wage rate received by workers is greater than the marginal cost of labor. 
A)  competitive situation in which individual firms cannot influence the wage rate they must pay. 
B)  competitive situation in which skill differentials create a difference between what a firm must pay labor versus the wage at which households are willing to supply labor. 
C)  monopsony situation in which the firm can influence wages by how much labor it hires, so that the wage rate received by workers is less than the marginal cost of labor. 
D)  monopsony situation in which the firm can influence wages by how much labor it hires, so that the wage rate received by workers is greater than the marginal cost of labor.

Question 6

If a monopsony must negotiate with a union, then the wage will probably be

Accepted Answer

A)  more than the value of marginal product. 
B)  more than the marginal cost of labor. 
C)  the same as if there had been no union. 
D)  more than what it would have been without a union but not more than the value of marginal product. 
A)  more than the value of marginal product. 
B)  more than the marginal cost of labor. 
C)  the same as if there had been no union. 
D)  more than what it would have been without a union but not more than the value of marginal product.

Question 7

A monopsony is

Accepted Answer

A)  a market in which there is only a single seller. 
B)  a market in which there is only a single buyer. 
C)  a monopoly sanctioned by law. 
D)  an illegal monopoly. 
A)  a market in which there is only a single seller. 
B)  a market in which there is only a single buyer. 
C)  a monopoly sanctioned by law. 
D)  an illegal monopoly.

Question 8

With respect to labor supply, the income effect leads a person to want to work more in order to raise his or her income.

Accepted Answer

A) True 
 B)False

Question 9

What factors shift the demand for labor curve? Briefly describe the effect of each.

Accepted Answer

Three factors shift the demand for labor

Question 10

In order to spend more time with her children, a young mother decides to work less hours as her pay increases. What does her labor supply curve look like?

Accepted Answer

The young mother's labor supply curve is

Question 11

-The above figure shows the market for labor. The employer is a monopsony. If a minimum wage of $10 is imposed, the equilibrium level of employment is

Accepted Answer

A)  200 hours per day. 
B)  400 hours per day. 
C)  600 hours per day. 
D)  800 hours per day. 
A)  200 hours per day. 
B)  400 hours per day. 
C)  600 hours per day. 
D)  800 hours per day.

Question 12

An increase in the price of a firm's output increases the firm's demand for labor because the

Accepted Answer

A)  marginal product of each worker increases. 
B)  value of marginal product of each worker increases. 
C)  value of marginal product curve becomes steeper. 
D)  value of marginal product curve becomes flatter. 
A)  marginal product of each worker increases. 
B)  value of marginal product of each worker increases. 
C)  value of marginal product curve becomes steeper. 
D)  value of marginal product curve becomes flatter.

Question 13

If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then

Accepted Answer

A)  wages and the quantity of labor hired will both increase. 
B)  wages will increase but the quantity of labor hired will decrease. 
C)  wages will decrease but the quantity of labor hired will increase. 
D)  wages and the quantity of labor hired will both decrease. 
A)  wages and the quantity of labor hired will both increase. 
B)  wages will increase but the quantity of labor hired will decrease. 
C)  wages will decrease but the quantity of labor hired will increase. 
D)  wages and the quantity of labor hired will both decrease.

Question 14

If the interest rate falls, the present value of $100 to be received in one year

Accepted Answer

A)  rises. 
B)  falls. 
C)  is unaffected. 
D)  might rise, fall, or not change. 
A)  rises. 
B)  falls. 
C)  is unaffected. 
D)  might rise, fall, or not change.

Question 15

-Hank's Propane Storage Company is a profit-maximizing monopsony in the local labor market for propane handling, delivery, and other associated services. The supply and marginal cost of labor curves are shown in the figure above. Hank's demand for labor curve is the curve labeled VMP = D. What is Hank's total cost of labor at the profit-maximizing quantity of labor employed?

Accepted Answer

A)  $1,200 
B)  $960 
C)  $800 
D)  $600 
A)  $1,200 
B)  $960 
C)  $800 
D)  $600

Question 16

If a firm finds that, at its current level of employment, VMP > W, it will

Accepted Answer

A)  be maximizing profits. 
B)  be minimizing profits. 
C)  increase the amount of labor it hires. 
D)  decrease the amount of labor it hires. 
A)  be maximizing profits. 
B)  be minimizing profits. 
C)  increase the amount of labor it hires. 
D)  decrease the amount of labor it hires.

Question 17

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve

Accepted Answer

A)  shifts leftward. 
B)  shifts rightward. 
C)  does not shift at all, but the firm moves upward along the curve. 
D)  None of the above because this change shifts the supply of labor curve. 
A)  shifts leftward. 
B)  shifts rightward. 
C)  does not shift at all, but the firm moves upward along the curve. 
D)  None of the above because this change shifts the supply of labor curve.

Question 18

-The above figure shows the market for labor. The employer is a monopsony. The firm maximizes its profit by hiring

Accepted Answer

A)  800 hours of labor at a wage of $5 per hour. 
B)  600 hours of labor at a wage of $10 per hour. 
C)  400 hours of labor at a wage of $5 per hour. 
D)  200 hours of labor at a wage of $5 per hour. 
A)  800 hours of labor at a wage of $5 per hour. 
B)  600 hours of labor at a wage of $10 per hour. 
C)  400 hours of labor at a wage of $5 per hour. 
D)  200 hours of labor at a wage of $5 per hour.

Question 19

A company is considering the purchase or the rental of a new machine. An increase in the interest rate

Accepted Answer

A)  increases the likelihood the company will buy the machine. 
B)  increases the likelihood the company will rent the machine. 
C)  has no effect on the likelihood that the company will buy the machine. 
D)  has no effect on the likelihood that the company will rent the machine. 
A)  increases the likelihood the company will buy the machine. 
B)  increases the likelihood the company will rent the machine. 
C)  has no effect on the likelihood that the company will buy the machine. 
D)  has no effect on the likelihood that the company will rent the machine.

Question 20

The supply of land is

Accepted Answer

A)  perfectly elastic. 
B)  elastic, but not perfectly elastic. 
C)  perfectly inelastic. 
D)  inelastic, but not perfectly inelastic. 
A)  perfectly elastic. 
B)  elastic, but not perfectly elastic. 
C)  perfectly inelastic. 
D)  inelastic, but not perfectly inelastic.

A monopsony is

The value in one year of $25 invested today at an annual interest rate of 5 percent will be

If the price of hair styling increases, then

In November 2008, the air traffic controllers who work at Guam became unionized. What would NOT be a way for the union to influence labor demand?

-In the above figure, the curve labeled MCL is the marginal cost of labor curve and is used in a

If a monopsony must negotiate with a union, then the wage will probably be

A monopsony is

With respect to labor supply, the income effect leads a person to want to work more in order to raise his or her income.

What factors shift the demand for labor curve? Briefly describe the effect of each.

In order to spend more time with her children, a young mother decides to work less hours as her pay increases. What does her labor supply curve look like?

-The above figure shows the market for labor. The employer is a monopsony. If a minimum wage of $10 is imposed, the equilibrium level of employment is

An increase in the price of a firm's output increases the firm's demand for labor because the

If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then

If the interest rate falls, the present value of $100 to be received in one year

If a firm finds that, at its current level of employment, VMP > W, it will

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve

-The above figure shows the market for labor. The employer is a monopsony. The firm maximizes its profit by hiring

A company is considering the purchase or the rental of a new machine. An increase in the interest rate

The supply of land is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Economic Inequality

Uncertainty and Information

Filters

Exam 18: Markets for Factors of Production

A monopsony is

The value in one year of $25 invested today at an annual interest rate of 5 percent will be

If the price of hair styling increases, then

In November 2008, the air traffic controllers who work at Guam became unionized. What would NOT be a way for the union to influence labor demand?

-In the above figure, the curve labeled MCL is the marginal cost of labor curve and is used in a

If a monopsony must negotiate with a union, then the wage will probably be

A monopsony is

With respect to labor supply, the income effect leads a person to want to work more in order to raise his or her income.

What factors shift the demand for labor curve? Briefly describe the effect of each.

In order to spend more time with her children, a young mother decides to work less hours as her pay increases. What does her labor supply curve look like?

-The above figure shows the market for labor. The employer is a monopsony. If a minimum wage of $10 is imposed, the equilibrium level of employment is

An increase in the price of a firm's output increases the firm's demand for labor because the

If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then

If the interest rate falls, the present value of $100 to be received in one year

If a firm finds that, at its current level of employment, VMP > W, it will

-The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve

-The above figure shows the market for labor. The employer is a monopsony. The firm maximizes its profit by hiring

A company is considering the purchase or the rental of a new machine. An increase in the interest rate

The supply of land is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Economic Inequality

Uncertainty and Information

Filters