Question 1

The income effect of a wage increase is expected to increase

Accepted Answer

A) supply of labor. 
B) supply of goods and services. 
C) demand for leisure. 
D) demand for labor. 
A) supply of labor. 
B) supply of goods and services. 
C) demand for leisure. 
D) demand for labor.

Question 2

A monopsony is a market situation in which there is only one buyer.

Accepted Answer

A) True 
 B)False

Question 3

Firms operating in competitive markets have little choice but to innovate.

Accepted Answer

A) True 
 B)False

Question 4

The shortened work week coupled with rising hourly wages in the U.S.economy shows that

Accepted Answer

A) the income effect has been dominant. 
B) the substitution effect does not exist at all. 
C) the U.S.worker is no longer productive. 
D) workers have become increasingly lazy. 
A) the income effect has been dominant. 
B) the substitution effect does not exist at all. 
C) the U.S.worker is no longer productive. 
D) workers have become increasingly lazy.

Question 5

Innovation refers to the introduction of new products and processes into the market.

Accepted Answer

A) True 
 B)False

Question 6

The supply of workers in an industry is influenced by the available working population and the nonmonetary attractiveness of the job.

Accepted Answer

A) True 
 B)False

Question 7

The demand curve for labor slopes downward because

Accepted Answer

A) few workers work at low wages. 
B) capital has been substituted for labor in most industries. 
C) of the diminishing marginal product of labor. 
D) All of the above are true. 
A) few workers work at low wages. 
B) capital has been substituted for labor in most industries. 
C) of the diminishing marginal product of labor. 
D) All of the above are true.

Question 8

A firm will generally believe that if it increases its spending on R&D its competitors will not follow, but if it decreases its spending they will follow.

Accepted Answer

A) True 
 B)False

Question 9

What are the major goals that unions may pursue in labor negotiations?
 Are these ever in conflict with one another?

Accepted Answer

The most commonly held view of unions is

Question 10

In the U.S.the total amount of work time lost to strikes is less than the amount of work time lost for coffee breaks.

Accepted Answer

A) True 
 B)False

Question 11

One of the great strengths of the market system is the way it acts as an engine of economic growth and innovation.

Accepted Answer

A) True 
 B)False

Question 12

To the extent that high incomes can be attributed to very high demand for very scarce abilities, the labor supply effects of a substantial increase in the tax rate

Accepted Answer

A) will be zero as long as the labor supply curve is vertical. 
B) will be significant because the demand curve is fixed. 
C) cannot be predicted because the substitution and income effects offset each other. 
D) will be zero as long as there is no economic rent in the income. 
A) will be zero as long as the labor supply curve is vertical. 
B) will be significant because the demand curve is fixed. 
C) cannot be predicted because the substitution and income effects offset each other. 
D) will be zero as long as there is no economic rent in the income.

Question 13

History has shown that over the long run, labor-saving technology has actually not reduced employment.

Accepted Answer

A) True 
 B)False

Question 14

The marginal revenue product is the extra revenue the firm receives by selling one more unit of output.

Accepted Answer

A) True 
 B)False

Question 15

The substitution effect makes workers want to work less when the wage increases.

Accepted Answer

A) True 
 B)False

Question 16

What are the alternative views to the human capital theory with respect to the role of education?

Accepted Answer

One alternative dissenting view sees edu

Question 17

High-wage workers are

Accepted Answer

A) more likely than low-wage workers to supply more labor when the wage rate rises. 
B) about as likely as low-wage workers to supply more labor when the wage rate rises. 
C) less likely than low-wage workers to supply more labor when the wage rate rises. 
D) The available evidence does not indicate how high-wage workers and low-wage workers differ in responding to changes in the wage rate. 
A) more likely than low-wage workers to supply more labor when the wage rate rises. 
B) about as likely as low-wage workers to supply more labor when the wage rate rises. 
C) less likely than low-wage workers to supply more labor when the wage rate rises. 
D) The available evidence does not indicate how high-wage workers and low-wage workers differ in responding to changes in the wage rate.

Question 18

Under the U.S.patent system, a patent application must provide evidence that the invention works, and that is based on another invention.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following workers would be most likely to work fewer hours as a result of a wage increase?

Accepted Answer

A) farm worker 
B) surgeon 
C) lifeguard 
D) bartender 
A) farm worker 
B) surgeon 
C) lifeguard 
D) bartender

Question 20

Define the following terms and explain their importance to the study of economics.
a.minimum wage law
b.income and substitution effects
c.backward-bending labor supply curve
d.human capital theory
e.dual labor markets

Accepted Answer

a.The minimum wage law places a lower fl

Exam 19: Labor and Entrepreneurship: the Human Inputs

The income effect of a wage increase is expected to increase

A monopsony is a market situation in which there is only one buyer.

Firms operating in competitive markets have little choice but to innovate.

The shortened work week coupled with rising hourly wages in the U.S.economy shows that

Innovation refers to the introduction of new products and processes into the market.

The supply of workers in an industry is influenced by the available working population and the nonmonetary attractiveness of the job.

The demand curve for labor slopes downward because

A firm will generally believe that if it increases its spending on R&D its competitors will not follow, but if it decreases its spending they will follow.

What are the major goals that unions may pursue in labor negotiations? Are these ever in conflict with one another?

In the U.S.the total amount of work time lost to strikes is less than the amount of work time lost for coffee breaks.

One of the great strengths of the market system is the way it acts as an engine of economic growth and innovation.

To the extent that high incomes can be attributed to very high demand for very scarce abilities, the labor supply effects of a substantial increase in the tax rate

History has shown that over the long run, labor-saving technology has actually not reduced employment.

The marginal revenue product is the extra revenue the firm receives by selling one more unit of output.

The substitution effect makes workers want to work less when the wage increases.

What are the alternative views to the human capital theory with respect to the role of education?

High-wage workers are

Under the U.S.patent system, a patent application must provide evidence that the invention works, and that is based on another invention.

Which of the following workers would be most likely to work fewer hours as a result of a wage increase?

Define the following terms and explain their importance to the study of economics. a.minimum wage law b.income and substitution effects c.backward-bending labor supply curve d.human capital theory e.dual labor markets

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