Question 1

Exhibit 11-11 Labor wage and cost data
 
In Exhibit 11-11, the wage required to hire 12 employees is equal to:

Accepted Answer

A)  $5.80. 
B)  $6.00. 
C)  $6.50. 
D)  $6.80. 
A)  $5.80. 
B)  $6.00. 
C)  $6.50. 
D)  $6.80.

Question 2

Exhibit 11-1 Use the information in the accompanying chart to answer the following question(s). The firm hires labor competitively and sells its product in a competitive price-taker market.
 
Refer to Exhibit 11-1. If the market wage rate is $25 per day, how many workers should the firm hire if it wants to maximize profits?

Accepted Answer

A)  4. 
B)  5. 
C)  6. 
D)  7. 
A)  4. 
B)  5. 
C)  6. 
D)  7.

Question 3

The demand for labor curve is identical to the:

Accepted Answer

A)  marginal revenue curve. 
B)  marginal resource curve. 
C)  total revenue curve. 
D)  marginal revenue product curve. 
A)  marginal revenue curve. 
B)  marginal resource curve. 
C)  total revenue curve. 
D)  marginal revenue product curve.

Question 4

Which of the following is not true about a monopsonist?

Accepted Answer

A)  It can set the wage rate and hire any desired number of workers at that wage. 
B)  It is the only buyer of labor in a market. 
C)  It usually extracts rents from its monopsony power. 
D)  It determines the optimal employment-wage rate combination by equating the marginal revenue product of labor to the marginal cost of labor. 
A)  It can set the wage rate and hire any desired number of workers at that wage. 
B)  It is the only buyer of labor in a market. 
C)  It usually extracts rents from its monopsony power. 
D)  It determines the optimal employment-wage rate combination by equating the marginal revenue product of labor to the marginal cost of labor.

Question 5

One reason the supply of carpenters is greater than the supply of physicians is because:

Accepted Answer

A)  carpenters demand less income. 
B)  physicians do not belong to a union. 
C)  of differences in human capital. 
D)  carpenters belong to unions. 
A)  carpenters demand less income. 
B)  physicians do not belong to a union. 
C)  of differences in human capital. 
D)  carpenters belong to unions.

Question 6

Exhibit 11-4 Supply and demand curves for food servers
 
In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid:

Accepted Answer

A)  $16 per day. 
B)  $32 per day. 
C)  $36 per day. 
D)  $40 per day. 
A)  $16 per day. 
B)  $32 per day. 
C)  $36 per day. 
D)  $40 per day.

Question 7

Exhibit 11-3 Labor supply curve
 
In Exhibit 11-3, the total wage cost of hiring 6 employees is:

Accepted Answer

A)  $18 per hour. 
B)  $36 per hour. 
C)  $3 per hour. 
D)  $108 per hour. 
A)  $18 per hour. 
B)  $36 per hour. 
C)  $3 per hour. 
D)  $108 per hour.

Question 8

If union-sponsored advertisements for a particular product succeed in increasing the demand for that product , the:

Accepted Answer

A)  demand for the union-labor used to produce the product will increase. 
B)  demand for the union-labor used to produce the product will decrease. 
C)  marginal factor cost of union-labor will increase. 
D)  marginal factor cost of union-labor will decrease. 
A)  demand for the union-labor used to produce the product will increase. 
B)  demand for the union-labor used to produce the product will decrease. 
C)  marginal factor cost of union-labor will increase. 
D)  marginal factor cost of union-labor will decrease.

Question 9

Describe the decision for a perfectly competitive employer in determining the profit maximizing quantity of labor to employ.

Accepted Answer

The profit maximizing quantity of labor

Question 10

A technological advance that increases the productivity of teachers can be expected to have what effects on the equilibrium labor market for teachers?

Accepted Answer

A)  Wages will rise, and quantity of labor will fall. 
B)  Wages will rise, and quantity of labor will rise. 
C)  Wages will fall, and quantity of labor will fall. 
D)  Wages will fall, and quantity of labor will rise. 
A)  Wages will rise, and quantity of labor will fall. 
B)  Wages will rise, and quantity of labor will rise. 
C)  Wages will fall, and quantity of labor will fall. 
D)  Wages will fall, and quantity of labor will rise.

Question 11

A firm's demand for labor depends on, in part, the demand for the firm's product. To summarize this idea, economists say that the demand for labor is:

Accepted Answer

A)  derived demand. 
B)  marginal demand. 
C)  secondary demand. 
D)  monopsonistic demand. 
A)  derived demand. 
B)  marginal demand. 
C)  secondary demand. 
D)  monopsonistic demand.

Question 12

Tucker Corporation sells its product for $5.00. Tucker's industrial engineers have informed management that hiring one additional worker will increase output by five units per hour. Tucker should hire the additional worker only if the wage rate is:

Accepted Answer

A)  $5.00 or less per hour. 
B)  $1.00 or more per hour. 
C)  $25.00 or less per hour. 
D)  more than $25.00 per hour. 
A)  $5.00 or less per hour. 
B)  $1.00 or more per hour. 
C)  $25.00 or less per hour. 
D)  more than $25.00 per hour.

Question 13

In a labor market with one employer, the marginal factor cost is:

Accepted Answer

A)  above the labor supply curve. 
B)  above the labor demand curve. 
C)  what determines the wage. 
D)  downward sloping. 
A)  above the labor supply curve. 
B)  above the labor demand curve. 
C)  what determines the wage. 
D)  downward sloping.

Question 14

The marginal cost of labor for a perfectly competitive firm is given by:

Accepted Answer

A)  the marginal product of labor. 
B)  the market wage rate. 
C)  its marginal revenue product curve. 
D)  the demand curve for labor. 
A)  the marginal product of labor. 
B)  the market wage rate. 
C)  its marginal revenue product curve. 
D)  the demand curve for labor.

Question 15

If the MRP of labor decreases, labor:

Accepted Answer

A)  demand will decrease. 
B)  demand will increase. 
C)  supply will increase. 
D)  supply will decrease. 
A)  demand will decrease. 
B)  demand will increase. 
C)  supply will increase. 
D)  supply will decrease.

Question 16

Exhibit 11-8 A labor market
 
If the labor market shown in Exhibit 11-8 is a monopsony, the wage rate and number of workers employed will be determined at point:
​

Accepted Answer

A)  F. 
B)  B. 
C)  C. 
D)  D. 
A)  F. 
B)  B. 
C)  C. 
D)  D.

Question 17

The demand curve for labor of Coca-Cola manufacturers will not shift to the right if:

Accepted Answer

A)  Coca-Cola workers become unionized. 
B)  the price of Coca-Cola increases. 
C)  the firms innovate with new technology that raises labor productivity. 
D)  the price of Pepsi increases. 
A)  Coca-Cola workers become unionized. 
B)  the price of Coca-Cola increases. 
C)  the firms innovate with new technology that raises labor productivity. 
D)  the price of Pepsi increases.

Question 18

A monopoly is a sole ____, and a monopsonist is a sole ____.

Accepted Answer

A)  buyer in a product market; seller in a product market 
B)  seller in a product market; seller in a labor market 
C)  buyer in a product market; seller in a labor market 
D)  seller in a product market; buyer in a labor market 
A)  buyer in a product market; seller in a product market 
B)  seller in a product market; seller in a labor market 
C)  buyer in a product market; seller in a labor market 
D)  seller in a product market; buyer in a labor market

Question 19

If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:

Accepted Answer

A)  marginal factor cost is $6. 
B)  marginal factor cost is $200. 
C)  total wage cost is $1,200. 
D)  total wage cost is $7,200. 
A)  marginal factor cost is $6. 
B)  marginal factor cost is $200. 
C)  total wage cost is $1,200. 
D)  total wage cost is $7,200.

Question 20

A monopsonist's marginal factor cost (MFC) curve lies above its supply curve because the firm must:

Accepted Answer

A)  lower the factor price to hire more. 
B)  increase the price of its product to sell more. 
C)  increase the factor price to hire more. 
D)  lower the product price to sell more. 
A)  lower the factor price to hire more. 
B)  increase the price of its product to sell more. 
C)  increase the factor price to hire more. 
D)  lower the product price to sell more.

Exam 11: Labor Markets

Exhibit 11-11 Labor wage and cost data In Exhibit 11-11, the wage required to hire 12 employees is equal to:

The demand for labor curve is identical to the:

Which of the following is not true about a monopsonist?

One reason the supply of carpenters is greater than the supply of physicians is because:

Exhibit 11-4 Supply and demand curves for food servers In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid:

Exhibit 11-3 Labor supply curve In Exhibit 11-3, the total wage cost of hiring 6 employees is:

If union-sponsored advertisements for a particular product succeed in increasing the demand for that product , the:

Describe the decision for a perfectly competitive employer in determining the profit maximizing quantity of labor to employ.

A technological advance that increases the productivity of teachers can be expected to have what effects on the equilibrium labor market for teachers?

A firm's demand for labor depends on, in part, the demand for the firm's product. To summarize this idea, economists say that the demand for labor is:

Tucker Corporation sells its product for $5.00. Tucker's industrial engineers have informed management that hiring one additional worker will increase output by five units per hour. Tucker should hire the additional worker only if the wage rate is:

In a labor market with one employer, the marginal factor cost is:

The marginal cost of labor for a perfectly competitive firm is given by:

If the MRP of labor decreases, labor:

Exhibit 11-8 A labor market If the labor market shown in Exhibit 11-8 is a monopsony, the wage rate and number of workers employed will be determined at point: ​

The demand curve for labor of Coca-Cola manufacturers will not shift to the right if:

A monopoly is a sole ____, and a monopsonist is a sole ____.

If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:

A monopsonist's marginal factor cost (MFC) curve lies above its supply curve because the firm must:

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

Filters

Exhibit 11-8 A labor market If the labor market shown in Exhibit 11-8 is a monopsony, the wage rate and number of workers employed will be determined at point:

A monopoly is a sole , and a monopsonist is a sole .