Question 1

Innovative firms face competition much more quickly than they did one hundred years ago.

Accepted Answer

A) True 
 B)False  True

Question 2

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  True

Question 3

Which of the following were invented centuries ago in China?

Accepted Answer

A) gunpowder 
B) the wheelbarrow 
C) printing with movable type 
D) all of the above 
A) gunpowder 
B) the wheelbarrow 
C) printing with movable type 
D) all of the above D

Question 4

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 5

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

Accepted Answer

A) True 
 B)False

Question 6

The increasing share of women in the labor force may have contributed to the decrease in unionization.

Accepted Answer

A) True 
 B)False

Question 7

A labor union is an organization representing workers in negotiations with employers over wages, benefits, and working conditions.

Accepted Answer

A) True 
 B)False

Question 8

Most innovation comes from universities and governments, which are inherently market driven.

Accepted Answer

A) True 
 B)False

Question 9

Firms share technology with rivals,

Accepted Answer

A) in order to better compete with their rivals. 
B) in order to help out when their rivals are in trouble. 
C) to share the substantial risks of innovation. 
D) because they are required to by law. 
E) in order to pass false information to their rivals in order to drive them out of business. 
A) in order to better compete with their rivals. 
B) in order to help out when their rivals are in trouble. 
C) to share the substantial risks of innovation. 
D) because they are required to by law. 
E) in order to pass false information to their rivals in order to drive them out of business.

Question 10

Most innovations come from just a few large industries.

Accepted Answer

A) True 
 B)False

Question 11

Statistical studies in the United States have reached the conclusion that for most workers the response of labor supply to wage changes is

Accepted Answer

A) quite strong. 
B) not very strong. 
C) inverted. 
D) always zero. 
A) quite strong. 
B) not very strong. 
C) inverted. 
D) always zero.

Question 12

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 13

A monopsonist hires labor in a market with perfectly competitive supply.Whenever she hires an additional worker,

Accepted Answer

A) she must reduce the wage paid to all workers already hired. 
B) she will not change the wage paid to all workers already hired. 
C) she must raise the wage paid to all workers already hired. 
D) she may or may not choose to change the wage paid to all workers already hired. 
A) she must reduce the wage paid to all workers already hired. 
B) she will not change the wage paid to all workers already hired. 
C) she must raise the wage paid to all workers already hired. 
D) she may or may not choose to change the wage paid to all workers already hired.

Question 14

Capitalism is an economic system in which there is public ownership of the means of production and resource allocation is determined through markets.

Accepted Answer

A) True 
 B)False

Question 15

Invention alone does not explain why free market societies have experienced such rapid rates of economic growth.

Accepted Answer

A) True 
 B)False

Question 16

In a competitive labor market

Accepted Answer

A) wages would be determined by supply and demand. 
B) the demand curve for labor is derived like the demand curve for any other input. 
C) the demand curve for labor is the downward-sloping portion of the MRP curve. 
D) All of the above answers are correct. 
A) wages would be determined by supply and demand. 
B) the demand curve for labor is derived like the demand curve for any other input. 
C) the demand curve for labor is the downward-sloping portion of the MRP curve. 
D) All of the above answers are correct.

Question 17

Wages are comparatively low in markets where demand for labor is low and supply is high.

Accepted Answer

A) True 
 B)False

Question 18

The demand for labor is a derived demand.Employers hire workers until the

Accepted Answer

A) wage rate equals the average product of labor. 
B) wage rate equals the marginal revenue product of labor. 
C) last worker hired adds nothing to total output. 
D) average product of labor is zero. 
A) wage rate equals the average product of labor. 
B) wage rate equals the marginal revenue product of labor. 
C) last worker hired adds nothing to total output. 
D) average product of labor is zero.

Question 19

Globalization was much more pervasive in the 1800s than it is today.

Accepted Answer

A) True 
 B)False

Question 20

Anything that influences a good's price or the marginal physical product of labor will influence wages.

Accepted Answer

A) True 
 B)False

Exam 19: Labor and Entrepreneurship: the Human Inputs

Innovative firms face competition much more quickly than they did one hundred years ago.

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

Which of the following were invented centuries ago in China?

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

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

The increasing share of women in the labor force may have contributed to the decrease in unionization.

A labor union is an organization representing workers in negotiations with employers over wages, benefits, and working conditions.

Most innovation comes from universities and governments, which are inherently market driven.

Firms share technology with rivals,

Most innovations come from just a few large industries.

Statistical studies in the United States have reached the conclusion that for most workers the response of labor supply to wage changes is

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

A monopsonist hires labor in a market with perfectly competitive supply.Whenever she hires an additional worker,

Capitalism is an economic system in which there is public ownership of the means of production and resource allocation is determined through markets.

Invention alone does not explain why free market societies have experienced such rapid rates of economic growth.

In a competitive labor market

Wages are comparatively low in markets where demand for labor is low and supply is high.

The demand for labor is a derived demand.Employers hire workers until the

Globalization was much more pervasive in the 1800s than it is today.

Anything that influences a good's price or the marginal physical product of labor will influence wages.

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

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

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