Question 1

A worker's marginal revenue product depends upon his average product.

Accepted Answer

A) True 
 B)False

Question 2

The process by which new product or production methods are introduced is called the Industrial Revolution.

Accepted Answer

A) True 
 B)False

Question 3

Distinguish between invention and innovation.

Accepted Answer

Invention is the creation of new product

Question 4

Firms that set prices equal to marginal costs will usually recover all of their R&D costs.

Accepted Answer

A) True 
 B)False

Question 5

Collaborative research is especially important in high-technology sectors because a single firm might not have the resources to develop a significant innovation.

Accepted Answer

A) True 
 B)False

Question 6

Explain the expression "time is more valuable than money." Explain in words and use a diagram to illustrate the implications of this for a person's labor supply curve.

Accepted Answer

A person has a certain amount of time th

Question 7

Rising productivity usually reduces workers' standards of living.

Accepted Answer

A) True 
 B)False

Question 8

If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of

Accepted Answer

A) the substitution effect. 
B) the income effect. 
C) rational expectations. 
D) rational ignorance. 
A) the substitution effect. 
B) the income effect. 
C) rational expectations. 
D) rational ignorance.

Question 9

Given a fixed amount of time, a decision to supply labor or not is simultaneously a decision to

Accepted Answer

A) demand goods and services or not. 
B) demand leisure or not. 
C) supply capital and land or not. 
D) supply leisure or not. 
A) demand goods and services or not. 
B) demand leisure or not. 
C) supply capital and land or not. 
D) supply leisure or not.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Entrepreneurial profits are very low because entrepreneurs are generally

Accepted Answer

A) overly pessimistic and receive psychological rewards for their work. 
B) overly pessimistic and incur psychological costs from their work. 
C) overly optimistic and receive psychological rewards for their work. 
D) overly optimistic and incur psychological costs from their work. 
A) overly pessimistic and receive psychological rewards for their work. 
B) overly pessimistic and incur psychological costs from their work. 
C) overly optimistic and receive psychological rewards for their work. 
D) overly optimistic and incur psychological costs from their work.

Question 12

The demand for labor is a derived demand.

Accepted Answer

A) True 
 B)False

Question 13

Teenage unemployment rates tend to be substantially higher than the overall unemployment rate.

Accepted Answer

A) True 
 B)False

Question 14

Over the last 30 years, the income gap between the rich and the poor has declined.

Accepted Answer

A) True 
 B)False

Question 15

The substitution effect is thought to dominate the behavior of low-wage workers.

Accepted Answer

A) True 
 B)False

Question 16

The more specialized and highly valued a worker's skills are,

Accepted Answer

A) the lower is her stock of human capital. 
B) the more likely she is to earn economic rent. 
C) the less likely she is to sell her skills on the primary labor market. 
D) the more likely she is to be directly affected by minimum wage legislation. 
A) the lower is her stock of human capital. 
B) the more likely she is to earn economic rent. 
C) the less likely she is to sell her skills on the primary labor market. 
D) the more likely she is to be directly affected by minimum wage legislation.

Question 17

American unions came under increasing pressure in the 1950s because of stronger competition both at home and abroad.

Accepted Answer

A) True 
 B)False

Question 18

An argument that has been advanced to explain high teenage unemployment is

Accepted Answer

A) lack of job experience. 
B) limited education. 
C) a minimum-wage requirement higher than their marginal revenue products. 
D) all of the above. 
A) lack of job experience. 
B) limited education. 
C) a minimum-wage requirement higher than their marginal revenue products. 
D) all of the above.

Question 19

Money spent on college tuition is considered human capital by economists.

Accepted Answer

A) True 
 B)False

Question 20

During most of the 1990s, average hours worked per week ____, then, after 2000, started to ____.

Accepted Answer

A) rose steadily; level off 
B) remained virtually constant; drop slowly. 
C) were on the upswing; fall slowly. 
D) continued to decline; level off 
A) rose steadily; level off 
B) remained virtually constant; drop slowly. 
C) were on the upswing; fall slowly. 
D) continued to decline; level off

Exam 19: Labor and Entrepreneurship: the Human Inputs

A worker's marginal revenue product depends upon his average product.

The process by which new product or production methods are introduced is called the Industrial Revolution.

Distinguish between invention and innovation.

Firms that set prices equal to marginal costs will usually recover all of their R&D costs.

Collaborative research is especially important in high-technology sectors because a single firm might not have the resources to develop a significant innovation.

Explain the expression "time is more valuable than money." Explain in words and use a diagram to illustrate the implications of this for a person's labor supply curve.

Rising productivity usually reduces workers' standards of living.

If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of

Given a fixed amount of time, a decision to supply labor or not is simultaneously a decision to

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

Entrepreneurial profits are very low because entrepreneurs are generally

The demand for labor is a derived demand.

Teenage unemployment rates tend to be substantially higher than the overall unemployment rate.

Over the last 30 years, the income gap between the rich and the poor has declined.

The substitution effect is thought to dominate the behavior of low-wage workers.

The more specialized and highly valued a worker's skills are,

American unions came under increasing pressure in the 1950s because of stronger competition both at home and abroad.

An argument that has been advanced to explain high teenage unemployment is

Money spent on college tuition is considered human capital by economists.

During most of the 1990s, average hours worked per week ____, then, after 2000, started to ____.

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

Filters

During most of the 1990s, average hours worked per week , then, after 2000, started to .