Question 1

Firms that set prices equal to marginal costs will usually recover all of their R&D costs.

Accepted Answer

A) True 
 B)False

Question 2

The quantity of labor supplied is dependent on the size of the working population and the wage rate.

Accepted Answer

A) True 
 B)False

Question 3

Innovation that increases the productivity of capital equipment will increase the demand for labor in the short run but decrease wages in the long run.

Accepted Answer

A) True 
 B)False

Question 4

Union leaders who focus on increasing the size of their union will be aggressive in demanding higher wages.

Accepted Answer

A) True 
 B)False

Question 5

Invention alone does not explain why free-market societies have experienced such rapid rates of economic growth.

Accepted Answer

A) True 
 B)False

Question 6

The process by which new product or production methods are introduced is called the Industrial Revolution.

Accepted Answer

A) True 
 B)False

Question 7

Labor productivity refers to the total amount of output a worker produces in some period of time (an hour, a week, a month, a year).

Accepted Answer

A) True 
 B)False

Question 8

It has been shown that when offered higher wages, women will work more hours.This is likely because

Accepted Answer

A) women tend to work more hours than men at any wage rate. 
B) the substitution effect is more dominant for women. 
C) the income effect is more dominant for women. 
D) women are more productive than men at higher wages. 
A) women tend to work more hours than men at any wage rate. 
B) the substitution effect is more dominant for women. 
C) the income effect is more dominant for women. 
D) women are more productive than men at higher wages.

Question 9

Now, about ____ percent of American married-couple families have two or more wage earners.

Accepted Answer

A) 35 
B) 50 
C) 60 
D) 90 
A) 35 
B) 50 
C) 60 
D) 90

Question 10

The derived demand for labor is determined by

Accepted Answer

A) labor's wage. 
B) labor's marginal revenue. 
C) the marginal cost of the input labor. 
D) labor's marginal revenue product. 
A) labor's wage. 
B) labor's marginal revenue. 
C) the marginal cost of the input labor. 
D) labor's marginal revenue product.

Question 11

Most innovation comes from universities and governments, which are inherently market driven.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following would not be a prediction from economic labor theory regarding the wage of a field hand?

Accepted Answer

A) Wages would increase as the price of wheat increased. 
B) Wages would decrease as interest rates rose. 
C) Wages would increase with the imposition of restrictions on immigration . 
D) Wages would decrease when the wheat thrasher increased harvesting productivity. 
A) Wages would increase as the price of wheat increased. 
B) Wages would decrease as interest rates rose. 
C) Wages would increase with the imposition of restrictions on immigration . 
D) Wages would decrease when the wheat thrasher increased harvesting productivity.

Question 13

Explain the expression "time is more valuable than money." Explain in words and use a diagram to illustrate the implications of this for a person's labor supply curve.

Accepted Answer

A person has a certain amount of time th

Question 14

There is only a small difference in wages between college graduates and workers who did not attend college.

Accepted Answer

A) True 
 B)False

Question 15

An individual's supply curve is backward bending when wages rise above a certain point.

Accepted Answer

A) True 
 B)False

Question 16

Under the U.S.patent system, a patent application must provide evidence that the invention works and that is based on another invention.

Accepted Answer

A) True 
 B)False

Question 17

Collective bargaining is a process used by unions and management to settle upon the terms of a labor contract.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following observations concerning labor cost patterns over the last century is true?

Accepted Answer

A) Average real wages started rising after 1973. 
B) Hourly compensation rates have fallen dramatically. 
C) Compensation growth slowed markedly. 
D) Average hours worked per week have increased by almost 50 percent. 
A) Average real wages started rising after 1973. 
B) Hourly compensation rates have fallen dramatically. 
C) Compensation growth slowed markedly. 
D) Average hours worked per week have increased by almost 50 percent.

Question 19

Innovation refers to the introduction of new products and processes into the market.

Accepted Answer

A) True 
 B)False

Question 20

The primary reason unionization in the United States has been declining is the shift of the U.S.labor force into service industries and out of manufacturing.

Accepted Answer

A) True 
 B)False

Exam 19: Labor and Entrepreneurship: the Human Inputs

Firms that set prices equal to marginal costs will usually recover all of their R&D costs.

The quantity of labor supplied is dependent on the size of the working population and the wage rate.

Innovation that increases the productivity of capital equipment will increase the demand for labor in the short run but decrease wages in the long run.

Union leaders who focus on increasing the size of their union will be aggressive in demanding higher wages.

Invention alone does not explain why free-market societies have experienced such rapid rates of economic growth.

The process by which new product or production methods are introduced is called the Industrial Revolution.

Labor productivity refers to the total amount of output a worker produces in some period of time (an hour, a week, a month, a year).

It has been shown that when offered higher wages, women will work more hours.This is likely because

Now, about ____ percent of American married-couple families have two or more wage earners.

The derived demand for labor is determined by

Most innovation comes from universities and governments, which are inherently market driven.

Which of the following would not be a prediction from economic labor theory regarding the wage of a field hand?

Explain the expression "time is more valuable than money." Explain in words and use a diagram to illustrate the implications of this for a person's labor supply curve.

There is only a small difference in wages between college graduates and workers who did not attend college.

An individual's supply curve is backward bending when wages rise above a certain point.

Under the U.S.patent system, a patent application must provide evidence that the invention works and that is based on another invention.

Collective bargaining is a process used by unions and management to settle upon the terms of a labor contract.

Which of the following observations concerning labor cost patterns over the last century is true?

Innovation refers to the introduction of new products and processes into the market.

The primary reason unionization in the United States has been declining is the shift of the U.S.labor force into service industries and out of manufacturing.

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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