Question 1

A minimum wage law is predicted to produce

Accepted Answer

A) higher unemployment among young and inexperienced workers. 
B) higher unemployment among all workers. 
C) lower unemployment among young and inexperienced workers. 
D) increased hiring of young and inexperienced workers. 
A) higher unemployment among young and inexperienced workers. 
B) higher unemployment among all workers. 
C) lower unemployment among young and inexperienced workers. 
D) increased hiring of young and inexperienced workers.

Question 2

Which of the following would likely not be a goal of a union?

Accepted Answer

A) Increasing the size of the union 
B) Increasing union income 
C) Increasing wages of union members 
D) Increasing wages of nonunion members 
A) Increasing the size of the union 
B) Increasing union income 
C) Increasing wages of union members 
D) Increasing wages of nonunion members

Question 3

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 4

In reality, there is not one labor market, but many.

Accepted Answer

A) True 
 B)False

Question 5

Under what conditions is it likely that the labor supply curve may become backward bending? What roles do the income and substitution effects play?

Accepted Answer

The labor supply curve is based on the w

Question 6

Discuss the historic increases and decreases in unionism in the United States and how it affects current labor relations today.

Accepted Answer

Unions are no longer as important as the

Question 7

Most innovations in the economy come from

Accepted Answer

A) many different industries in a few countries. 
B) a few industries in many different countries. 
C) many different industries in many different countries. 
D) a few industries in a few countries. 
E) a few industries in the United States. 
A) many different industries in a few countries. 
B) a few industries in many different countries. 
C) many different industries in many different countries. 
D) a few industries in a few countries. 
E) a few industries in the United States.

Question 8

Capitalism is an economic system in which the production process is controlled primarily by private firms operating in markets.

Accepted Answer

A) True 
 B)False

Question 9

Statistical studies in the United States have reached the conclusion that for low-income workers

Accepted Answer

A) the substitution effect is greater than the income effect. 
B) the income effect is greater than the substitution effect. 
C) the income effect is about equal to the substitution effect. 
D) the substitution effect is of the "wrong" sign. 
A) the substitution effect is greater than the income effect. 
B) the income effect is greater than the substitution effect. 
C) the income effect is about equal to the substitution effect. 
D) the substitution effect is of the "wrong" sign.

Question 10

The substitution effect from a change in wages is

Accepted Answer

A) when people switch to higher paying jobs. 
B) when people work less as their income increases. 
C) when companies use more capital or other inputs as wages increase and more labor when wages decrease. 
D) when people have an incentive to work more when wages increase and less when they decrease. 
A) when people switch to higher paying jobs. 
B) when people work less as their income increases. 
C) when companies use more capital or other inputs as wages increase and more labor when wages decrease. 
D) when people have an incentive to work more when wages increase and less when they decrease.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Suppose the goal of a union is to maximize the total income of all workers it represents. In this case, it will probably aim for a wage at which the elasticity of demand for workers is

Accepted Answer

A) 0 
B) infinite. 
C) 1 
D) ranging from 2 to 5. 
A) 0 
B) infinite. 
C) 1 
D) ranging from 2 to 5.

Question 13

The following table shows the total physical product of labor. Compute the marginal physical product (MPP)of labor and the marginal revenue product (MRP)of labor at output prices of $10 per unit and $12 per unit. If labor costs $105 per unit, how much should the firm hire at each price of output?

Accepted Answer

If labor costs $105 per unit,

Question 14

A minimum wage law might increase wages without reducing employment if the hiring firm is

Accepted Answer

A) in perfect competition. 
B) a monopolist. 
C) a monopolistic competitor. 
D) a monopsonist. 
A) in perfect competition. 
B) a monopolist. 
C) a monopolistic competitor. 
D) a monopsonist.

Question 15

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 16

Evidence indicates that the average economic profits of invention are

Accepted Answer

A) well above zero. 
B) slightly above zero. 
C) equal to zero. 
D) less than zero. 
A) well above zero. 
B) slightly above zero. 
C) equal to zero. 
D) less than zero.

Question 17

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 18

A college education is a(n)

Accepted Answer

A) investment in human capital. 
B) form of innovation. 
C) public good. 
D) mediated settlement. 
A) investment in human capital. 
B) form of innovation. 
C) public good. 
D) mediated settlement.

Question 19

Historically, revolutionary inventions and innovations have come from

Accepted Answer

A) large established companies. 
B) individuals and small new firms. 
C) firms with large research and development programs. 
D) government-sponsored entities. 
A) large established companies. 
B) individuals and small new firms. 
C) firms with large research and development programs. 
D) government-sponsored entities.

Question 20

Union membership in the United States has fallen compared to what it was in the 1950s.

Accepted Answer

A) True 
 B)False

Exam 19: Labor and Entrepreneurship: the Human Inputs

A minimum wage law is predicted to produce

Which of the following would likely not be a goal of a union?

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

In reality, there is not one labor market, but many.

Under what conditions is it likely that the labor supply curve may become backward bending? What roles do the income and substitution effects play?

Discuss the historic increases and decreases in unionism in the United States and how it affects current labor relations today.

Most innovations in the economy come from

Capitalism is an economic system in which the production process is controlled primarily by private firms operating in markets.

Statistical studies in the United States have reached the conclusion that for low-income workers

The substitution effect from a change in wages is

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

Suppose the goal of a union is to maximize the total income of all workers it represents. In this case, it will probably aim for a wage at which the elasticity of demand for workers is

The following table shows the total physical product of labor. Compute the marginal physical product (MPP)of labor and the marginal revenue product (MRP)of labor at output prices of $10 per unit and $12 per unit. If labor costs $105 per unit, how much should the firm hire at each price of output?

A minimum wage law might increase wages without reducing employment if the hiring firm is

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

Evidence indicates that the average economic profits of invention are

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

A college education is a(n)

Historically, revolutionary inventions and innovations have come from

Union membership in the United States has fallen compared to what it was in the 1950s.

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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