Question 1

All of the following are examples of fringe benefits except

Accepted Answer

A) health insurance. 
B) retirement payments. 
C) overtime payments. 
D) education subsidies. 
A) health insurance. 
B) retirement payments. 
C) overtime payments. 
D) education subsidies.

Question 2

A labor union acts as a monopsony seller of labor.

Accepted Answer

A) True 
 B)False

Question 3

If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of

Accepted Answer

A) the substitution effect. 
B) the income effect. 
C) rational expectations. 
D) rational ignorance. 
A) the substitution effect. 
B) the income effect. 
C) rational expectations. 
D) rational ignorance.

Question 4

Labor markets are generally perfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

A monopsonist hires labor in a market with perfectly competitive supply. Whenever she hires an additional worker,

Accepted Answer

A) she must reduce the wage paid to all workers already hired. 
B) she will not change the wage paid to all workers already hired. 
C) she must raise the wage paid to all workers already hired. 
D) she may or may not choose to change the wage paid to all workers already hired. 
A) she must reduce the wage paid to all workers already hired. 
B) she will not change the wage paid to all workers already hired. 
C) she must raise the wage paid to all workers already hired. 
D) she may or may not choose to change the wage paid to all workers already hired.

Question 7

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 8

Labor strikes are a significant cause of lost production.

Accepted Answer

A) True 
 B)False

Question 9

Doctors demand large salaries in part because

Accepted Answer

A) they are forbidden by U.S. law from receiving economic rent. 
B) most doctors have backward-bending labor supply curves. 
C) they participate in the secondary labor market. 
D) they have made significant investments in human capital. 
A) they are forbidden by U.S. law from receiving economic rent. 
B) most doctors have backward-bending labor supply curves. 
C) they participate in the secondary labor market. 
D) they have made significant investments in human capital.

Question 10

How do modern markets differ from other economic systems in their capacity to produce "growth miracles"?

Accepted Answer

While other societies have had spectacul

Question 11

As hourly wages have risen in the United States in the twentieth century, the number of hours of labor supplied by most wage workers has

Accepted Answer

A) fallen. 
B) stayed roughly constant. 
C) risen. 
D) generally risen, but has fallen during periods of recession. 
A) fallen. 
B) stayed roughly constant. 
C) risen. 
D) generally risen, but has fallen during periods of recession.

Question 12

Over the last 30 years, the income gap between the rich and the poor has declined.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following has no market "price"?

Accepted Answer

A) Labor 
B) Capital 
C) Entrepreneurship 
D) Fixed factors 
A) Labor 
B) Capital 
C) Entrepreneurship 
D) Fixed factors

Question 14

What is the term used for the process by which an entrepreneur creates or recognizes a new and better product, acquires it, and brings it to market, making older substitutes obsolete?

Accepted Answer

A) Creative destruction 
B) Innovation 
C) The substitution effect 
D) Backward-bending innovation 
A) Creative destruction 
B) Innovation 
C) The substitution effect 
D) Backward-bending innovation

Question 15

The supply curve of truck drivers is upward sloping and demand curve is downward sloping. A reduction in the price of hauling freight by truck relative to the price of hauling freight by rail will ____ the equilibrium wage of truck drivers and ____ the number of drivers employed.

Accepted Answer

A) decrease; decrease 
B) decrease; increase 
C) increase; decrease 
D) increase; increase 
A) decrease; decrease 
B) decrease; increase 
C) increase; decrease 
D) increase; increase

Question 16

Cannon Mills used to be virtually the only employer in Kannapolis, North Carolina. What is the name for a single hirer of labor, and how do wages and the number of jobs available compare to a competitive labor market?

Accepted Answer

Monopsonists hire fewer workers and pay

Question 17

Explain how a bilateral monopoly equilibrium outcome differs from a purely competitive outcome.

Accepted Answer

In pure competition, there are so many s

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

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 20

Why do firms spend money on costly innovation?

Accepted Answer

A) Competitive markets leave firms no choice but to innovate. 
B) Innovation is a low-risk activity. 
C) Innovation always results in higher profits for firms. 
D) Innovation is usually profitable because the majority of innovations reach the market place. 
E) Because innovation is beneficial for society and firms are motivated to act in ways that are beneficial for society. 
A) Competitive markets leave firms no choice but to innovate. 
B) Innovation is a low-risk activity. 
C) Innovation always results in higher profits for firms. 
D) Innovation is usually profitable because the majority of innovations reach the market place. 
E) Because innovation is beneficial for society and firms are motivated to act in ways that are beneficial for society.

Exam 19: Labor and Entrepreneurship: the Human Inputs

All of the following are examples of fringe benefits except

A labor union acts as a monopsony seller of labor.

If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of

Labor markets are generally perfectly competitive markets.

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

A monopsonist hires labor in a market with perfectly competitive supply. Whenever she hires an additional worker,

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

Labor strikes are a significant cause of lost production.

Doctors demand large salaries in part because

How do modern markets differ from other economic systems in their capacity to produce "growth miracles"?

As hourly wages have risen in the United States in the twentieth century, the number of hours of labor supplied by most wage workers has

Over the last 30 years, the income gap between the rich and the poor has declined.

Which of the following has no market "price"?

What is the term used for the process by which an entrepreneur creates or recognizes a new and better product, acquires it, and brings it to market, making older substitutes obsolete?

The supply curve of truck drivers is upward sloping and demand curve is downward sloping. A reduction in the price of hauling freight by truck relative to the price of hauling freight by rail will ____ the equilibrium wage of truck drivers and ____ the number of drivers employed.

Cannon Mills used to be virtually the only employer in Kannapolis, North Carolina. What is the name for a single hirer of labor, and how do wages and the number of jobs available compare to a competitive labor market?

Explain how a bilateral monopoly equilibrium outcome differs from a purely competitive outcome.

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

Which of the following would not be true of a competitive labor market?

Why do firms spend money on costly innovation?

What Is Economics

The Economy: 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

Externalities, Externaliteis, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Contemporary Issues in the Us Economy

Filters

The supply curve of truck drivers is upward sloping and demand curve is downward sloping. A reduction in the price of hauling freight by truck relative to the price of hauling freight by rail will the equilibrium wage of truck drivers and the number of drivers employed.