Question 1

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 2

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 3

The supply of workers in an industry is influenced by the available working population and the nonmonetary attractiveness of the job.

Accepted Answer

A) True 
 B)False

Question 4

At existing wage rates, hospitals face a shortage of registered nurses (RNs). Some studies have suggested that an increase in RN wages will actually reduce the hours supplied by existing RNs, making it more difficult for hospitals to find RNs. Which of the following is likely the cause of these findings?

Accepted Answer

A) Constant marginal productivity 
B) The cost disease 
C) A substitution effect larger than the income effect 
D) An income effect larger than the substitution effect 
A) Constant marginal productivity 
B) The cost disease 
C) A substitution effect larger than the income effect 
D) An income effect larger than the substitution effect

Question 5

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 6

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 7

Which of the following is not true for the wages of professional athletes?

Accepted Answer

A) They are related to demand for their services. 
B) They include substantial economic rents. 
C) They are high because of scarcity. 
D) They are not related to human capital investment. 
A) They are related to demand for their services. 
B) They include substantial economic rents. 
C) They are high because of scarcity. 
D) They are not related to human capital investment.

Question 8

For which of the following workers would the substitution effect be more likely to outweigh the income effect of an increase in wage?

Accepted Answer

A) Air traffic controller 
B) Marketing manager 
C) Waitress 
D) Dentist 
A) Air traffic controller 
B) Marketing manager 
C) Waitress 
D) Dentist

Question 9

One of the most significant developments in labor supply in recent times is the increase in the labor force participation of married women.

Accepted Answer

A) True 
 B)False

Question 10

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 11

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 12

What are the two characteristics that are essential to economic analysis of invention?

Accepted Answer

A) Fixed costs and public goods 
B) Fixed costs and private goods 
C) Variable costs and public goods 
D) Variable costs and private goods 
A) Fixed costs and public goods 
B) Fixed costs and private goods 
C) Variable costs and public goods 
D) Variable costs and private goods

Question 13

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 14

The shortened work week coupled with rising hourly wages in the U.S. economy shows that

Accepted Answer

A) the income effect has been dominant. 
B) the substitution effect does not exist at all. 
C) the U.S. worker is no longer productive. 
D) workers have become increasingly lazy. 
A) the income effect has been dominant. 
B) the substitution effect does not exist at all. 
C) the U.S. worker is no longer productive. 
D) workers have become increasingly lazy.

Question 15

College graduates now earn nearly twice as much as their high school-educated peers and that gap is increasing.

Accepted Answer

A) True 
 B)False

Question 16

Agriculture is a sector of the economy where increased productivity has been accompanied by a significant decrease in employment.

Accepted Answer

A) True 
 B)False

Question 17

What percentage of American workers now belong to labor unions?

Accepted Answer

A) Less than 20 percent 
B) About 40 percent 
C) About 60 percent 
D) More than 80 percent 
A) Less than 20 percent 
B) About 40 percent 
C) About 60 percent 
D) More than 80 percent

Question 18

Innovation tends to be an extremely competitive activity that allows few opportunities for firms to share information with one another.

Accepted Answer

A) True 
 B)False

Question 19

Income effect of lowering wages implies

Accepted Answer

A) workers prefer leisure to work. 
B) an increase in the productivity of labor. 
C) a fall in the demand for labor. 
D) workers would want to work more. 
A) workers prefer leisure to work. 
B) an increase in the productivity of labor. 
C) a fall in the demand for labor. 
D) workers would want to work more.

Question 20

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.

Exam 19: Labor and Entrepreneurship: the Human Inputs

The demand for labor is derived from the

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

The supply of workers in an industry is influenced by the available working population and the nonmonetary attractiveness of the job.

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

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

Which of the following is not true for the wages of professional athletes?

For which of the following workers would the substitution effect be more likely to outweigh the income effect of an increase in wage?

One of the most significant developments in labor supply in recent times is the increase in the labor force participation of married women.

The human capital model assumes that

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?

What are the two characteristics that are essential to economic analysis of invention?

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

The shortened work week coupled with rising hourly wages in the U.S. economy shows that

College graduates now earn nearly twice as much as their high school-educated peers and that gap is increasing.

Agriculture is a sector of the economy where increased productivity has been accompanied by a significant decrease in employment.

What percentage of American workers now belong to labor unions?

Innovation tends to be an extremely competitive activity that allows few opportunities for firms to share information with one another.

Income effect of lowering wages implies

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

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

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