Question 1

The labor supply curve starts to bend backward at the point where

Accepted Answer

A) the total utility of leisure exceeds the total disutility of labor. 
B) the marginal utility of additional income becomes zero. 
C) the income effect comes to dominate the substitution effect. 
D) the substitution effect comes to dominate the income effect. 
A) the total utility of leisure exceeds the total disutility of labor. 
B) the marginal utility of additional income becomes zero. 
C) the income effect comes to dominate the substitution effect. 
D) the substitution effect comes to dominate the income effect.

Question 2

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 3

What are the major goals that unions may pursue in labor negotiations? Are these ever in conflict with one another?

Accepted Answer

The most commonly held view of unions is

Question 4

All other things being equal, an increase in the supply of labor will lead to a fall in the wage.

Accepted Answer

A) True 
 B)False

Question 5

Why has the free-market system produced the most rapid rates of growth of any economic system?

Accepted Answer

The features of competitive markets put

Question 6

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) available financial capital 
B) incentives for entrepreneurship 
C) an adequate price system 
D) ingenuity 
A) available financial capital 
B) incentives for entrepreneurship 
C) an adequate price system 
D) ingenuity

Question 7

In the United States, because men on average earn more than women, the substitution effect tends to outweigh the income affect when wages increase.

Accepted Answer

A) True 
 B)False

Question 8

Suppose a study showed that as the income of doctors increased, doctors spent more time on the golf course and less in the office.What would such a conclusion say about the relative sizes of substitution and income effects?

Accepted Answer

The supply curve for doctor labor hours

Question 9

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 10

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 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

In the collective bargaining process,

Accepted Answer

A) supply and demand analysis is used to determine the wage. 
B) the contract can legally cover only the wage or salary determined. 
C) there is often heated discussion with threats of strikes and counterthreats of lockout. 
D) the negotiation period is limited to 30 days. 
A) supply and demand analysis is used to determine the wage. 
B) the contract can legally cover only the wage or salary determined. 
C) there is often heated discussion with threats of strikes and counterthreats of lockout. 
D) the negotiation period is limited to 30 days.

Question 14

Unions often have the power to push wages above competitive levels.

Accepted Answer

A) True 
 B)False

Question 15

The majority of new jobs created in the service sector of the U.S.economy have been in the information sector.

Accepted Answer

A) True 
 B)False

Question 16

Less than 13 percent of U.S.workers belong to unions.

Accepted Answer

A) True 
 B)False

Question 17

In which of the following scenarios would a tax be least likely to affect the amount of labor supplied?

Accepted Answer

A) A 10 percent tax on the earnings of NFL quarterbacks 
B) A 10 percent tax on the earnings of fast-food workers 
C) A 10 percent tax increase on the earnings of all workers 
D) A 10 percent tax decrease on earnings of construction workers 
A) A 10 percent tax on the earnings of NFL quarterbacks 
B) A 10 percent tax on the earnings of fast-food workers 
C) A 10 percent tax increase on the earnings of all workers 
D) A 10 percent tax decrease on earnings of construction workers

Question 18

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 19

Recent data and analysis confirms that minimum wage laws have significantly increased teenage unemployment.

Accepted Answer

A) True 
 B)False

Question 20

Over the last century,

Accepted Answer

A) hours worked have increased as wages have increased. 
B) hours worked have decreased as wages have increased. 
C) hours worked have increased as wages have decreased. 
D) hours worked have decreased as wages have decreased 
A) hours worked have increased as wages have increased. 
B) hours worked have decreased as wages have increased. 
C) hours worked have increased as wages have decreased. 
D) hours worked have decreased as wages have decreased

Exam 19: Labor and Entrepreneurship: the Human Inputs

The labor supply curve starts to bend backward at the point where

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

What are the major goals that unions may pursue in labor negotiations? Are these ever in conflict with one another?

All other things being equal, an increase in the supply of labor will lead to a fall in the wage.

Why has the free-market system produced the most rapid rates of growth of any economic system?

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 ____.

In the United States, because men on average earn more than women, the substitution effect tends to outweigh the income affect when wages increase.

Suppose a study showed that as the income of doctors increased, doctors spent more time on the golf course and less in the office.What would such a conclusion say about the relative sizes of substitution and income effects?

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

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.

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

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

In the collective bargaining process,

Unions often have the power to push wages above competitive levels.

The majority of new jobs created in the service sector of the U.S.economy have been in the information sector.

Less than 13 percent of U.S.workers belong to unions.

In which of the following scenarios would a tax be least likely to affect the amount of labor supplied?

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

Recent data and analysis confirms that minimum wage laws have significantly increased teenage unemployment.

Over the last century,

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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