Question 1

Exhibit 11-13 A monopsonist's supply and marginal revenue product data
 
Use Exhibit 11-13. What wage rate will the monopsonist pay the workers?

Accepted Answer

A)  $11. 
B)  $13. 
C)  $12. 
D)  $16. 
A)  $11. 
B)  $13. 
C)  $12. 
D)  $16. C

Question 2

According to the economic theory of labor markets, if unions are successful in raising wages, with no accompanying increase in labor productivity, then which of the following is true ?

Accepted Answer

A)  The quantity of labor demanded by profit-maximizing firms will decline. 
B)  The quantity of labor demanded by profit-maximizing firms will increase. 
C)  The quantity of labor supplied by workers will decline. 
D)  There will be a shortage of labor in the unionized labor market. 
A)  The quantity of labor demanded by profit-maximizing firms will decline. 
B)  The quantity of labor demanded by profit-maximizing firms will increase. 
C)  The quantity of labor supplied by workers will decline. 
D)  There will be a shortage of labor in the unionized labor market. A

Question 3

BigBiz, a local monopsonist, currently hires 50 workers and pays them $6 per hour. To attract an additional worker to its labor force, BigBiz would have to raise the wage rate to $6.25 per hour. What is BigBiz's marginal factor cost?

Accepted Answer

A)  $6.25 per hour. 
B)  $12.50 per hour. 
C)  $18.75 per hour. 
D)  $20 per hour. 
A)  $6.25 per hour. 
B)  $12.50 per hour. 
C)  $18.75 per hour. 
D)  $20 per hour. C

Question 4

Which of the following will decrease the demand for fast-food burger workers' labor?

Accepted Answer

A)  More people start working two jobs and eat more fast food. 
B)  The price of pizza, a substitute for burgers, decreases. 
C)  A new technology allows burgers to be produced faster. 
D)  Workers get additional training that increases productivity. 
A)  More people start working two jobs and eat more fast food. 
B)  The price of pizza, a substitute for burgers, decreases. 
C)  A new technology allows burgers to be produced faster. 
D)  Workers get additional training that increases productivity.

Question 5

Which of the following statements is true ?

Accepted Answer

A)  Marginal revenue product is the extra revenue generated to the firm from the production of one more unit of output. 
B)  Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production. 
C)  The demand curve for a perfectly competitive employer is horizontal at the market wage rate. 
D)  The supply curve of labor is upward sloping because of the law of diminishing marginal productivity. 
A)  Marginal revenue product is the extra revenue generated to the firm from the production of one more unit of output. 
B)  Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production. 
C)  The demand curve for a perfectly competitive employer is horizontal at the market wage rate. 
D)  The supply curve of labor is upward sloping because of the law of diminishing marginal productivity.

Question 6

If a product's price increases, then its:

Accepted Answer

A)  MP will increase. 
B)  MFC will increase. 
C)  MRP will increase. 
D)  MP will decrease. 
A)  MP will increase. 
B)  MFC will increase. 
C)  MRP will increase. 
D)  MP will decrease.

Question 7

Exhibit 11-13 A monopsonist's supply and marginal revenue product data
 
In Exhibit 11-13, how many workers will the monopsonist hire?

Accepted Answer

A)  4. 
B)  5. 
C)  3. 
D)  6. 
A)  4. 
B)  5. 
C)  3. 
D)  6.

Question 8

An increase in the demand for a product will shift the

Accepted Answer

A)  supply of labor used to produce the product rightward. 
B)  supply of labor used to produce the product leftward. 
C)  demand for labor used to produce the product rightward. 
D)  demand for labor used to produce the product leftward. 
A)  supply of labor used to produce the product rightward. 
B)  supply of labor used to produce the product leftward. 
C)  demand for labor used to produce the product rightward. 
D)  demand for labor used to produce the product leftward.

Question 9

The following chart indicates the reductions in total losses due to theft if a jewelry store hires additional security guards.
 
If the security guards can be hired for $45 per day, how many guards should the shop hire?

Accepted Answer

A)  2. 
B)  3. 
C)  4. 
D)  5. 
A)  2. 
B)  3. 
C)  4. 
D)  5.

Question 10

A union can influence the demand for labor by:

Accepted Answer

A)  requiring union fees. 
B)  raising union fees. 
C)  effective advertising that convinces customers to buy the "union label." 
D)  lobbying for legislation to reduce immigration. 
A)  requiring union fees. 
B)  raising union fees. 
C)  effective advertising that convinces customers to buy the "union label." 
D)  lobbying for legislation to reduce immigration.

Question 11

If product price increases, then:

Accepted Answer

A)  MP will increase. 
B)  MFC will increase. 
C)  MRP will increase. 
D)  MP will decrease. 
A)  MP will increase. 
B)  MFC will increase. 
C)  MRP will increase. 
D)  MP will decrease.

Question 12

A union may attempt to obtain stricter certification requirements or longer apprenticeships. These changes would raise workers' wages because they:

Accepted Answer

A)  create unnecessary unemployment. 
B)  shift in labor supply curve leftward. 
C)  decrease the marginal product of labor. 
D)  reduce management's use of featherbedding. 
A)  create unnecessary unemployment. 
B)  shift in labor supply curve leftward. 
C)  decrease the marginal product of labor. 
D)  reduce management's use of featherbedding.

Question 13

A decrease in the marginal product of labor would be represented by a(n):

Accepted Answer

A)  increase in labor demand. 
B)  decrease in labor demand. 
C)  increase in the quantity demanded of labor. 
D)  decrease in the quantity demanded of labor. 
A)  increase in labor demand. 
B)  decrease in labor demand. 
C)  increase in the quantity demanded of labor. 
D)  decrease in the quantity demanded of labor.

Question 14

The marginal revenue product of a resource is:

Accepted Answer

A)  the marginal product of the resource divided by the price of the product it helps to produce. 
B)  the price of the product times the price of the resource. 
C)  larger when the product price is larger. 
D)  larger when the marginal product is smaller. 
A)  the marginal product of the resource divided by the price of the product it helps to produce. 
B)  the price of the product times the price of the resource. 
C)  larger when the product price is larger. 
D)  larger when the marginal product is smaller.

Question 15

Suppose the price of HD televisions decreases. As a result, the

Accepted Answer

A)  MP of the workers making HD televisions will increase. 
B)  MFC of the workers making HD televisions will increase. 
C)  MRP of the workers making HD televisions will increase. 
D)  MRP of the workers making HD televisions will decrease. 
A)  MP of the workers making HD televisions will increase. 
B)  MFC of the workers making HD televisions will increase. 
C)  MRP of the workers making HD televisions will increase. 
D)  MRP of the workers making HD televisions will decrease.

Question 16

What happens to the marginal product of labor when the market price of the good produced increases?

Accepted Answer

A)  Increases proportional to price. 
B)  Decreases proportional to price. 
C)  Stays the same. 
D)  Falls because quantity demanded falls. 
A)  Increases proportional to price. 
B)  Decreases proportional to price. 
C)  Stays the same. 
D)  Falls because quantity demanded falls.

Question 17

A worker's accumulated investment in education, training, experience, and health is called:

Accepted Answer

A)  derived labor demand. 
B)  collective entrepreneurship. 
C)  seniority. 
D)  human capital. 
A)  derived labor demand. 
B)  collective entrepreneurship. 
C)  seniority. 
D)  human capital.

Question 18

Lorna's Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is:

Accepted Answer

A)  $10. 
B)  $14. 
C)  $120. 
D)  $140. 
A)  $10. 
B)  $14. 
C)  $120. 
D)  $140.

Question 19

Describe the two basic strategies of unions in increasing wage rates for their members.

Accepted Answer

Increasing demand or decreasing supply o

Question 20

Which of the following is the best example of an investment in human capital?

Accepted Answer

A)  on-the-job training received by an apprentice electrician 
B)  an increase in the number of hours worked per week by a worker in an unskilled laboring job 
C)  the purchase of company stock by a worker 
D)  payments into a retirement pension plan by a skilled laborer 
A)  on-the-job training received by an apprentice electrician 
B)  an increase in the number of hours worked per week by a worker in an unskilled laboring job 
C)  the purchase of company stock by a worker 
D)  payments into a retirement pension plan by a skilled laborer

Exam 11: Labor Markets

Exhibit 11-13 A monopsonist's supply and marginal revenue product data Use Exhibit 11-13. What wage rate will the monopsonist pay the workers?

According to the economic theory of labor markets, if unions are successful in raising wages, with no accompanying increase in labor productivity, then which of the following is true ?

BigBiz, a local monopsonist, currently hires 50 workers and pays them $6 per hour. To attract an additional worker to its labor force, BigBiz would have to raise the wage rate to $6.25 per hour. What is BigBiz's marginal factor cost?

Which of the following will decrease the demand for fast-food burger workers' labor?

Which of the following statements is true ?

If a product's price increases, then its:

Exhibit 11-13 A monopsonist's supply and marginal revenue product data In Exhibit 11-13, how many workers will the monopsonist hire?

An increase in the demand for a product will shift the

The following chart indicates the reductions in total losses due to theft if a jewelry store hires additional security guards. If the security guards can be hired for $45 per day, how many guards should the shop hire?

A union can influence the demand for labor by:

If product price increases, then:

A union may attempt to obtain stricter certification requirements or longer apprenticeships. These changes would raise workers' wages because they:

A decrease in the marginal product of labor would be represented by a(n):

The marginal revenue product of a resource is:

Suppose the price of HD televisions decreases. As a result, the

What happens to the marginal product of labor when the market price of the good produced increases?

A worker's accumulated investment in education, training, experience, and health is called:

Lorna's Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is:

Describe the two basic strategies of unions in increasing wage rates for their members.

Which of the following is the best example of an investment in human capital?

Introducing the Economic Way of Thinking

Production Possibilities Opportunity Cost and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Income Distribution Poverty and Discrimination

Antitrust and Regulation

Environmental Economics

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits Surpluses and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less Developed Countries

Understanding Direct and Inverse Relationships between Variables

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