Question 1

Which of the following would cause the demand for labor to change?

Accepted Answer

A)  a change in the price of the good produced 
B)  a change in the cost of living 
C)  changes in the wage rate 
D)  movements along the labor demand curve 
A)  a change in the price of the good produced 
B)  a change in the cost of living 
C)  changes in the wage rate 
D)  movements along the labor demand curve

Question 2

The marginal revenue product of a resource:

Accepted Answer

A)  is defined as the marginal product of the resource multiplied by the resource price. 
B)  simply means that a firm should add to its capital stock as long as competition requires it. 
C)  equals the extra output produced by an additional unit of the resource multiplied by the price of that output. 
D)  equals the average product of the resource multiplied by the cost of hiring an additional (marginal) unit of the resource. 
A)  is defined as the marginal product of the resource multiplied by the resource price. 
B)  simply means that a firm should add to its capital stock as long as competition requires it. 
C)  equals the extra output produced by an additional unit of the resource multiplied by the price of that output. 
D)  equals the average product of the resource multiplied by the cost of hiring an additional (marginal) unit of the resource.

Question 3

For a monopsonist, the supply of labor facing the firm is:

Accepted Answer

A)  an insignificant portion of the market supply. 
B)  perfectly horizontal. 
C)  identical to the supply curve facing the market. 
D)  the summation of each firm's demand for labor. 
A)  an insignificant portion of the market supply. 
B)  perfectly horizontal. 
C)  identical to the supply curve facing the market. 
D)  the summation of each firm's demand for labor.

Question 4

A competitive car wash currently hires 4 workers, who together can wash 80 cars per day. The market price of car washes is $5 per wash, and the price of workers is $60 per day. The car wash should hire a fifth worker if it would increase total production to at least:

Accepted Answer

A)  92 cars per day. 
B)  100 cars per day. 
C)  104 cars per day. 
D)  110 cars per day. 
A)  92 cars per day. 
B)  100 cars per day. 
C)  104 cars per day. 
D)  110 cars per day.

Question 5

Explain why wage rates might rise at Joe's Quik-Print Shop if Joe replaces his aging copy machines with state-of-the-art copy machines.

Accepted Answer

The improvement in technology will boost

Question 6

Which of the following most clearly illustrates the concept of derived demand?

Accepted Answer

A)  An increase in the price of steak causes the demand for poultry to increase. 
B)  An increase in the demand for new houses leads to an increase in the demand for construction workers. 
C)  An increase in consumer income leads to an increase in the demand for services provided by the government. 
D)  An increase in the demand for new cars causes the demand for used automobiles to rise. 
A)  An increase in the price of steak causes the demand for poultry to increase. 
B)  An increase in the demand for new houses leads to an increase in the demand for construction workers. 
C)  An increase in consumer income leads to an increase in the demand for services provided by the government. 
D)  An increase in the demand for new cars causes the demand for used automobiles to rise.

Question 7

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. What is the marginal revenue product of the fifth unit of labor?

Accepted Answer

A)  $6. 
B)  $36. 
C)  $54. 
D)  $324. 
A)  $6. 
B)  $36. 
C)  $54. 
D)  $324.

Question 8

Exhibit 11- 7  Demand for labor curves
​
 
In Exhibit 11-7, which of the following could have caused the shift in labor demand from D 1 to D 2 ?

Accepted Answer

A)  Increase in the demand for the product. 
B)  Decrease in wages. 
C)  Decrease in price of product. 
D)  Decrease in demand for the product. 
A)  Increase in the demand for the product. 
B)  Decrease in wages. 
C)  Decrease in price of product. 
D)  Decrease in demand for the product.

Question 9

Exhibit 11-12 A monopsonist
 
In Exhibit 11-12, a profit-maximizing firm faced with this labor market will hire ____ workers and pay a wage of ____.

Accepted Answer

A)  60; $35 
B)  60; $25 
C)  60; $27 
D)  70; $30 
A)  60; $35 
B)  60; $25 
C)  60; $27 
D)  70; $30

Question 10

A monopsonist hires the amount of labor where the marginal revenue product of labor equals the:

Accepted Answer

A)  price of the monopsonist's product. 
B)  wage rate. 
C)  marginal factor cost of labor. 
D)  marginal product of labor. 
A)  price of the monopsonist's product. 
B)  wage rate. 
C)  marginal factor cost of labor. 
D)  marginal product of labor.

Question 11

The optimal hiring rule is to employ labor up to the point where:

Accepted Answer

A)  wage = MFC. 
B)  wage = MP. 
C)  wage = MR 
D)  wage = MRP 
A)  wage = MFC. 
B)  wage = MP. 
C)  wage = MR 
D)  wage = MRP

Question 12

Wage and MFC differ for a monopsonist because:

Accepted Answer

A)  the monopsonist is forced to pay a wage greater than the worker's MFC. 
B)  the monopsonist must accept the market wage rate. 
C)  workers are not as efficient when employed by a monopsonist. 
D)  any wage increase applies to all workers, not just to the next hired. 
A)  the monopsonist is forced to pay a wage greater than the worker's MFC. 
B)  the monopsonist must accept the market wage rate. 
C)  workers are not as efficient when employed by a monopsonist. 
D)  any wage increase applies to all workers, not just to the next hired.

Question 13

Featherbedding allows unions to increase wages by:

Accepted Answer

A)  limiting the supply of labor. 
B)  increasing firms' demand for labor. 
C)  forcing firms to accept higher-than-equilibrium wages. 
D)  reducing labor share of payroll taxes. 
A)  limiting the supply of labor. 
B)  increasing firms' demand for labor. 
C)  forcing firms to accept higher-than-equilibrium wages. 
D)  reducing labor share of payroll taxes.

Question 14

Currently, union membership in the United States is about what percentage of civilian employees?

Accepted Answer

A)  10 percent. 
B)  15 percent. 
C)  20 percent. 
D)  25 percent. 
A)  10 percent. 
B)  15 percent. 
C)  20 percent. 
D)  25 percent.

Question 15

Exhibit 11-5 A perfectly competitive labor market
 
  In Exhibit 11-5, when the marginal revenue product is $20.00, firms should

Accepted Answer

A)  continue hiring workers. 
B)  stop hiring workers. 
C)  start firing workers. 
D)  pay a wage above $15.00 to its workers 
A)  continue hiring workers. 
B)  stop hiring workers. 
C)  start firing workers. 
D)  pay a wage above $15.00 to its workers

Question 16

The demand for a factor of production depends on the:

Accepted Answer

A)  supply of the factor. 
B)  supply of other factors of production. 
C)  demand for other factors of production. 
D)  demand for the products that it helps to produce. 
A)  supply of the factor. 
B)  supply of other factors of production. 
C)  demand for other factors of production. 
D)  demand for the products that it helps to produce.

Question 17

The process of negotiating labor contracts between the union and management concerning wages and working conditions is called

Accepted Answer

A)  collective bargaining. 
B)  featherbedding. 
C)  lobbying. 
D)  an apprenticeship. 
A)  collective bargaining. 
B)  featherbedding. 
C)  lobbying. 
D)  an apprenticeship.

Question 18

A firm's demand curve for labor coincides with the:

Accepted Answer

A)  marginal cost curve. 
B)  average cost curve. 
C)  marginal revenue curve. 
D)  marginal revenue product curve. 
A)  marginal cost curve. 
B)  average cost curve. 
C)  marginal revenue curve. 
D)  marginal revenue product curve.

Question 19

Exhibit 11-4 Supply and demand curves for food servers
 
In Exhibit 11-4, the equilibrium wage and the number of food servers employed per day, respectively, are:

Accepted Answer

A)  $2.00 and 5,000. 
B)  $4.00 and 10,000. 
C)  $6.00 and 15,000 
D)  $8.00 and 20,000. 
A)  $2.00 and 5,000. 
B)  $4.00 and 10,000. 
C)  $6.00 and 15,000 
D)  $8.00 and 20,000.

Question 20

Which of the following statements is true ?

Accepted Answer

A)  A monopsony is the only employer of a factor of production. 
B)  A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market. 
C)  A monopsony has a marginal factor cost curve which lies below its supply curve of labor. 
D)  Unions are becoming a greater influence in American labor markets. 
A)  A monopsony is the only employer of a factor of production. 
B)  A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market. 
C)  A monopsony has a marginal factor cost curve which lies below its supply curve of labor. 
D)  Unions are becoming a greater influence in American labor markets.

Exam 11: Labor Markets

Which of the following would cause the demand for labor to change?

The marginal revenue product of a resource:

For a monopsonist, the supply of labor facing the firm is:

A competitive car wash currently hires 4 workers, who together can wash 80 cars per day. The market price of car washes is $5 per wash, and the price of workers is $60 per day. The car wash should hire a fifth worker if it would increase total production to at least:

Explain why wage rates might rise at Joe's Quik-Print Shop if Joe replaces his aging copy machines with state-of-the-art copy machines.

Which of the following most clearly illustrates the concept of derived demand?

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. What is the marginal revenue product of the fifth unit of labor?

Exhibit 11- 7 Demand for labor curves ​ In Exhibit 11-7, which of the following could have caused the shift in labor demand from D 1 to D 2 ?

Exhibit 11-12 A monopsonist In Exhibit 11-12, a profit-maximizing firm faced with this labor market will hire ____ workers and pay a wage of ____.

A monopsonist hires the amount of labor where the marginal revenue product of labor equals the:

The optimal hiring rule is to employ labor up to the point where:

Wage and MFC differ for a monopsonist because:

Featherbedding allows unions to increase wages by:

Currently, union membership in the United States is about what percentage of civilian employees?

Exhibit 11-5 A perfectly competitive labor market In Exhibit 11-5, when the marginal revenue product is $20.00, firms should

The demand for a factor of production depends on the:

The process of negotiating labor contracts between the union and management concerning wages and working conditions is called

A firm's demand curve for labor coincides with the:

Exhibit 11-4 Supply and demand curves for food servers In Exhibit 11-4, the equilibrium wage and the number of food servers employed per day, respectively, are:

Which of the following statements is true ?

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- 7 Demand for labor curves In Exhibit 11-7, which of the following could have caused the shift in labor demand from D ₁ to D ₂ ?

Exhibit 11-12 A monopsonist In Exhibit 11-12, a profit-maximizing firm faced with this labor market will hire workers and pay a wage of .