Question 1

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 2

Union leaders who focus on increasing the size of their union will generally accept a wage just above the competitive level.

Accepted Answer

A) True 
 B)False

Question 3

The marginal revenue product is the extra revenue the firm receives by selling one additional unit of output.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following has not occurred in the United States over the last two decades?

Accepted Answer

A) A fall in real wages 
B) An increase in labor-force participation 
C) Growth in service sector employment 
D) A decrease in the wage differentials between colleges grads noncollege grads. 
A) A fall in real wages 
B) An increase in labor-force participation 
C) Growth in service sector employment 
D) A decrease in the wage differentials between colleges grads noncollege grads.

Question 5

Union membership was relatively low during the Great Depression.

Accepted Answer

A) True 
 B)False

Question 6

The job market for which group always seems to have higher unemployment than the labor force as a whole? Why?

Accepted Answer

The job market for teenagers seems to ha

Question 7

Price competition among firms has proved to be more important than the introduction of new products.

Accepted Answer

A) True 
 B)False

Question 8

Studies have shown that in the 1980s the wage gap between college-educated workers and those with high school education or less

Accepted Answer

A) decreased dramatically. 
B) decreased slightly. 
C) remained unchanged. 
D) widened dramatically. 
A) decreased dramatically. 
B) decreased slightly. 
C) remained unchanged. 
D) widened dramatically.

Question 9

Given a tax on wages, the economic theory of labor markets would

Accepted Answer

A) predict people work less as a result of the tax. 
B) predict people work more as a result of the tax. 
C) be unable to predict whether people would work more or less as a result of the tax. 
D) predict higher unemployment. 
A) predict people work less as a result of the tax. 
B) predict people work more as a result of the tax. 
C) be unable to predict whether people would work more or less as a result of the tax. 
D) predict higher unemployment.

Question 10

Governmental rules that significantly promoted entrepreneurship first became prominent during the

Accepted Answer

A) Great Recession. 
B) Age of Enlightenment. 
C) Great Depression. 
D) Industrial Revolution. 
A) Great Recession. 
B) Age of Enlightenment. 
C) Great Depression. 
D) Industrial Revolution.

Question 11

The labor demand curve slopes down because

Accepted Answer

A) fewer workers work at low wages. 
B) capital will substitute for labor as wages decrease. 
C) of the diminishing marginal product of labor. 
D) of the income effect of rising wages. 
A) fewer workers work at low wages. 
B) capital will substitute for labor as wages decrease. 
C) of the diminishing marginal product of labor. 
D) of the income effect of rising wages.

Question 12

Many experts on the nursing shortage insist that, in addition to higher money wages, other ways will have to be found to make the nursing profession more attractive, including, for example, more respect from physicians and administrators, more flexible schedules, and more secure parking lots.These facts illustrate the concept of

Accepted Answer

A) exploitation. 
B) pecuniary principles. 
C) economic rent. 
D) nonmonetary attractiveness. 
A) exploitation. 
B) pecuniary principles. 
C) economic rent. 
D) nonmonetary attractiveness.

Question 13

A union wants to increase its members' wages without reducing employment.Which of the following strategies might achieve that goal?

Accepted Answer

A) Setting a high minimum wage rate for its members 
B) Increasing the number of members in the union 
C) Pushing employers not to allow featherbedding of workers 
D) Training its members to work more productively 
A) Setting a high minimum wage rate for its members 
B) Increasing the number of members in the union 
C) Pushing employers not to allow featherbedding of workers 
D) Training its members to work more productively

Question 14

There is strong evidence that entrepreneurs are characteristically

Accepted Answer

A) driven by greed. 
B) overoptimistic. 
C) not good business people. 
D) satisfied with the status quo. 
A) driven by greed. 
B) overoptimistic. 
C) not good business people. 
D) satisfied with the status quo.

Question 15

A firm that reduces its research and development spending will expect competitor firms to reduce research and development spending as competition is reduced.

Accepted Answer

A) True 
 B)False

Question 16

Most entrepreneurs are self-employed.

Accepted Answer

A) True 
 B)False

Question 17

Spending on an education is considered an investment because it involves a sacrifice of current income for higher expected future income.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The human capital model assumes that

Accepted Answer

A) education is a productive investment that raises total output. 
B) education does not change potential productivity, but it does save resources by reducing sorting costs for employers. 
C) the educational system is a very expensive process to legitimize the intergenerational transmission of privileged status. 
D) such factors as the love of learning should be included in the analysis. 
A) education is a productive investment that raises total output. 
B) education does not change potential productivity, but it does save resources by reducing sorting costs for employers. 
C) the educational system is a very expensive process to legitimize the intergenerational transmission of privileged status. 
D) such factors as the love of learning should be included in the analysis.

Question 20

Currently, college graduates are earning about ____ more than high school grads over the course of their careers.

Accepted Answer

A) $100,000 
B) $1,000,000 
C) 25 percent 
D) 60 percent 
A) $100,000 
B) $1,000,000 
C) 25 percent 
D) 60 percent

Exam 19: Labor and Entrepreneurship: the Human Inputs

The income effect of a wage increase is expected to increase

Union leaders who focus on increasing the size of their union will generally accept a wage just above the competitive level.

The marginal revenue product is the extra revenue the firm receives by selling one additional unit of output.

Which of the following has not occurred in the United States over the last two decades?

Union membership was relatively low during the Great Depression.

The job market for which group always seems to have higher unemployment than the labor force as a whole? Why?

Price competition among firms has proved to be more important than the introduction of new products.

Studies have shown that in the 1980s the wage gap between college-educated workers and those with high school education or less

Given a tax on wages, the economic theory of labor markets would

Governmental rules that significantly promoted entrepreneurship first became prominent during the

The labor demand curve slopes down because

A union wants to increase its members' wages without reducing employment.Which of the following strategies might achieve that goal?

There is strong evidence that entrepreneurs are characteristically

A firm that reduces its research and development spending will expect competitor firms to reduce research and development spending as competition is reduced.

Most entrepreneurs are self-employed.

Spending on an education is considered an investment because it involves a sacrifice of current income for higher expected future income.

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

The human capital model assumes that

Currently, college graduates are earning about ____ more than high school grads over the course of their careers.

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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