Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Capitalism is an economic system in which the production process is controlled primarily by private firms operating in markets.

Accepted Answer

A) True 
 B)False

Question 3

Figure 20-4  
-The consensus among researchers is that union workers earn 15 percent more than otherwise identical nonunion workers.This means unions have probably raised wages

Accepted Answer

A) exactly 15 percent. 
B) less than 15 percent. 
C) at least 15 percent. 
D) more or less than 15 percent, but one cannot tell exactly. 
A) exactly 15 percent. 
B) less than 15 percent. 
C) at least 15 percent. 
D) more or less than 15 percent, but one cannot tell exactly.

Question 4

Increases in education are analogous to investments in capital.

Accepted Answer

A) True 
 B)False

Question 5

It is possible to analyze education decisions in a manner similar to the decision to acquire more

Accepted Answer

A) capital. 
B) leisure. 
C) work. 
D) goods and services. 
A) capital. 
B) leisure. 
C) work. 
D) goods and services.

Question 6

Over 50 percent of all U.S.workers now belong to unions.

Accepted Answer

A) True 
 B)False

Question 7

The argument that the minimum wage law has significantly increased teenage unemployment is not supported by recent statistical analysis.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not an argument that has been made to explain high unemployment among teenagers?

Accepted Answer

A) A lack of job experience 
B) Limited education 
C) A minimum-wage requirement higher than their marginal revenue products 
D) Backward bending supply curves 
A) A lack of job experience 
B) Limited education 
C) A minimum-wage requirement higher than their marginal revenue products 
D) Backward bending supply curves

Question 9

A labor union can increase wages by exercising market power on behalf of workers.

Accepted Answer

A) True 
 B)False

Question 10

The American Bar Association administers the bar examinations that prospective lawyers must pass before being allowed to practice law.The legal requirement to pass this test before practicing law allows the Bar Association to act as a

Accepted Answer

A) monopsony. 
B) union that can restrict the supply of lawyers. 
C) union that can increase the number of lawyers. 
D) bilateral monopoly. 
A) monopsony. 
B) union that can restrict the supply of lawyers. 
C) union that can increase the number of lawyers. 
D) bilateral monopoly.

Question 11

Invention cannot be successful financially if price is

Accepted Answer

A) greater than marginal cost because invention is based largely on social costs. 
B) greater than marginal cost because invention is based solely on external costs. 
C) equal to marginal cost because invention is based largely on variable costs. 
D) equal to marginal cost because invention is based largely on fixed costs. 
A) greater than marginal cost because invention is based largely on social costs. 
B) greater than marginal cost because invention is based solely on external costs. 
C) equal to marginal cost because invention is based largely on variable costs. 
D) equal to marginal cost because invention is based largely on fixed costs.

Question 12

Figure 20-1  
-Which of the following would not be true of a competitive labor market?

Accepted Answer

A) Wages would be determined by supply and demand. 
B) The demand curve for labor would be derived like the demand curve for any other input. 
C) The demand curve for labor would be the downward-sloping portion of the MRP curve. 
D) Labor supply would be determined by the marginal revenue product curve. 
A) Wages would be determined by supply and demand. 
B) The demand curve for labor would be derived like the demand curve for any other input. 
C) The demand curve for labor would be the downward-sloping portion of the MRP curve. 
D) Labor supply would be determined by the marginal revenue product curve.

Question 13

A bilateral monopoly is a market situation in which there is only one buyer and only one seller.

Accepted Answer

A) True 
 B)False

Question 14

The real minimum wage has increased significantly over the last 40 years.

Accepted Answer

A) True 
 B)False

Question 15

Statistical studies in the United States have reached the conclusion that for low-income workers

Accepted Answer

A) the substitution effect is greater than the income effect. 
B) the income effect is greater than the substitution effect. 
C) the income effect is about equal to the substitution effect. 
D) the substitution effect is of the "wrong" sign. 
A) the substitution effect is greater than the income effect. 
B) the income effect is greater than the substitution effect. 
C) the income effect is about equal to the substitution effect. 
D) the substitution effect is of the "wrong" sign.

Question 16

An economist would describe college fees as

Accepted Answer

A) an investment in human capital. 
B) a transfer payment. 
C) a waste of parents' money. 
D) an economic loss. 
A) an investment in human capital. 
B) a transfer payment. 
C) a waste of parents' money. 
D) an economic loss.

Question 17

The number of persons who could become lawyers or surgeons is potentially quite large, yet these two groups earn fairly high incomes.One of the main reasons why they do is the

Accepted Answer

A) return on the investment of many years of training. 
B) evening-out of their low income during schooling. 
C) rent on their unique and rare talents. 
D) scarcity value of their abilities. 
A) return on the investment of many years of training. 
B) evening-out of their low income during schooling. 
C) rent on their unique and rare talents. 
D) scarcity value of their abilities.

Question 18

A minimum wage

Accepted Answer

A) increases the number of unskilled workers who are employed. 
B) increases wages to all unskilled workers. 
C) increases the wages paid to unskilled workers who are employed. 
D) increases cyclical unemployment. 
A) increases the number of unskilled workers who are employed. 
B) increases wages to all unskilled workers. 
C) increases the wages paid to unskilled workers who are employed. 
D) increases cyclical unemployment.

Question 19

The demand for labor is derived from the

Accepted Answer

A) demand for leisure. 
B) supply of labor. 
C) demand for final-output goods. 
D) supply of final-output goods. 
A) demand for leisure. 
B) supply of labor. 
C) demand for final-output goods. 
D) supply of final-output goods.

Question 20

High-wage workers are

Accepted Answer

A) more likely than low-wage workers to supply more labor when the wage rate rises. 
B) about as likely as low-wage workers to supply more labor when the wage rate rises. 
C) less likely than low-wage workers to supply more labor when the wage rate rises. 
D) about as likely as low-wages workers to supply less labor when the wage rate rises. 
A) more likely than low-wage workers to supply more labor when the wage rate rises. 
B) about as likely as low-wage workers to supply more labor when the wage rate rises. 
C) less likely than low-wage workers to supply more labor when the wage rate rises. 
D) about as likely as low-wages workers to supply less labor when the wage rate rises.

Exam 19: Labor and Entrepreneurship: the Human Inputs

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

Capitalism is an economic system in which the production process is controlled primarily by private firms operating in markets.

Figure 20-4 -The consensus among researchers is that union workers earn 15 percent more than otherwise identical nonunion workers.This means unions have probably raised wages

Increases in education are analogous to investments in capital.

It is possible to analyze education decisions in a manner similar to the decision to acquire more

Over 50 percent of all U.S.workers now belong to unions.

The argument that the minimum wage law has significantly increased teenage unemployment is not supported by recent statistical analysis.

Which of the following is not an argument that has been made to explain high unemployment among teenagers?

A labor union can increase wages by exercising market power on behalf of workers.

The American Bar Association administers the bar examinations that prospective lawyers must pass before being allowed to practice law.The legal requirement to pass this test before practicing law allows the Bar Association to act as a

Invention cannot be successful financially if price is

Figure 20-1 -Which of the following would not be true of a competitive labor market?

A bilateral monopoly is a market situation in which there is only one buyer and only one seller.

The real minimum wage has increased significantly over the last 40 years.

Statistical studies in the United States have reached the conclusion that for low-income workers

An economist would describe college fees as

The number of persons who could become lawyers or surgeons is potentially quite large, yet these two groups earn fairly high incomes.One of the main reasons why they do is the

A minimum wage

The demand for labor is derived from the

High-wage workers are

What Is Economics

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of 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

Contemporary Issues in the Useconomy

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