Question 1

Figure 20-4
  
-In Figure 20-4, which panel depicts a union suffering unemployment during a recession rather than allowing the wage to fall?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 2

What are the factors that contribute to productivity growth in the market economy and which of them is considered most important?

Accepted Answer

There are three oft-cited factors that c

Question 3

Collective bargaining is a process used by unions and management to settle upon the terms of a labor contract.

Accepted Answer

A) True 
 B)False

Question 4

An economist would describe college fees as

Accepted Answer

A) an investment in human capital. 
B) a transfer payment. 
C) a waste of parents' money. 
D) an economic loss. 
A) an investment in human capital. 
B) a transfer payment. 
C) a waste of parents' money. 
D) an economic loss.

Question 5

For which of the following workers would the income effect be more likely to outweigh the substitution effect of an increase in wage?

Accepted Answer

A) gardener 
B) teacher 
C) professional athlete 
D) plumber 
A) gardener 
B) teacher 
C) professional athlete 
D) plumber

Question 6

When a patent is awarded, no one but the patent owner may produce the invention without his permission.

Accepted Answer

A) True 
 B)False

Question 7

A union wants to increase its members' wages without reducing employment.Which of the following strategies might achieve that goal?

Accepted Answer

A) setting a high minimum wage rate for its members 
B) increasing the number of members in the union 
C) pushing employers not to allow featherbedding of workers 
D) training its members to work more productively 
A) setting a high minimum wage rate for its members 
B) increasing the number of members in the union 
C) pushing employers not to allow featherbedding of workers 
D) training its members to work more productively

Question 8

The income effect of higher wages leads workers to want to work more.

Accepted Answer

A) True 
 B)False

Question 9

Income effect of lower wages implies

Accepted Answer

A) workers prefer leisure to work. 
B) an increase in the productivity of labor. 
C) a fall in the demand for labor. 
D) workers would want to work more. 
A) workers prefer leisure to work. 
B) an increase in the productivity of labor. 
C) a fall in the demand for labor. 
D) workers would want to work more.

Question 10

A tax on wages will

Accepted Answer

A) reduce labor supply since leisure becomes cheaper. 
B) raise labor supply since income is reduced. 
C) have an unpredictable impact on labor supply since there are both substitution and income effects. 
D) have a predictable impact since economists know substitution effects will dominate. 
A) reduce labor supply since leisure becomes cheaper. 
B) raise labor supply since income is reduced. 
C) have an unpredictable impact on labor supply since there are both substitution and income effects. 
D) have a predictable impact since economists know substitution effects will dominate.

Question 11

A person's decision to supply a certain amount of labor in a week is simultaneously a decision to consume a certain amount of leisure per week.

Accepted Answer

A) True 
 B)False

Question 12

From the Industrial Revolution to the present, innovation has played a major role in the growth of output.What do the leading analysts of economic growth argue were some of the most significant innovations of this period?

Accepted Answer

Leading analysts of economic grow argue

Question 13

One effect of having access to cheap foreign goods can be to raise workers' real wages.

Accepted Answer

A) True 
 B)False

Question 14

Spending on R&D among a group of firms is equally likely to increase or to decrease.

Accepted Answer

A) True 
 B)False

Question 15

In general, an increase in wages will lead to some reaction in line with

Accepted Answer

A) the income effect but not the substitution effect. 
B) the substitution effect but not the income effect. 
C) both the income and substitution effect. 
D) neither the income effect nor the substitution effect. 
A) the income effect but not the substitution effect. 
B) the substitution effect but not the income effect. 
C) both the income and substitution effect. 
D) neither the income effect nor the substitution effect.

Question 16

If the income effect of a change in the wage dominates the substitution effect, then workers will want to work more when the wage increases.

Accepted Answer

A) True 
 B)False

Question 17

Union leaders who focus on increasing the size of their union will be aggressive in demanding higher wages.

Accepted Answer

A) True 
 B)False

Question 18

Teenagers generally have high marginal revenue products because they have not completed their educations and have little job experience.

Accepted Answer

A) True 
 B)False

Question 19

Many experts on the nursing shortage insist that, in addition to higher money wages, other ways will have to be found to make the nursing profession more attractive, including, for example, more respect from physicians and administrators, more flexible schedules, and more secure parking lots.These facts illustrate the concept of

Accepted Answer

A) exploitation. 
B) pecuniary principles. 
C) economic rent. 
D) nonmonetary attractiveness. 
A) exploitation. 
B) pecuniary principles. 
C) economic rent. 
D) nonmonetary attractiveness.

Question 20

The concept of economic rent would be more applicable to the earnings of

Accepted Answer

A) a secretary. 
B) Peyton Manning. 
C) a doctor or a lawyer. 
D) only a landowner. 
A) a secretary. 
B) Peyton Manning. 
C) a doctor or a lawyer. 
D) only a landowner.

Exam 19: Labor and Entrepreneurship: the Human Inputs

Figure 20-4 -In Figure 20-4, which panel depicts a union suffering unemployment during a recession rather than allowing the wage to fall?

What are the factors that contribute to productivity growth in the market economy and which of them is considered most important?

Collective bargaining is a process used by unions and management to settle upon the terms of a labor contract.

An economist would describe college fees as

For which of the following workers would the income effect be more likely to outweigh the substitution effect of an increase in wage?

When a patent is awarded, no one but the patent owner may produce the invention without his permission.

A union wants to increase its members' wages without reducing employment.Which of the following strategies might achieve that goal?

The income effect of higher wages leads workers to want to work more.

Income effect of lower wages implies

A tax on wages will

A person's decision to supply a certain amount of labor in a week is simultaneously a decision to consume a certain amount of leisure per week.

From the Industrial Revolution to the present, innovation has played a major role in the growth of output.What do the leading analysts of economic growth argue were some of the most significant innovations of this period?

One effect of having access to cheap foreign goods can be to raise workers' real wages.

Spending on R&D among a group of firms is equally likely to increase or to decrease.

In general, an increase in wages will lead to some reaction in line with

If the income effect of a change in the wage dominates the substitution effect, then workers will want to work more when the wage increases.

Union leaders who focus on increasing the size of their union will be aggressive in demanding higher wages.

Teenagers generally have high marginal revenue products because they have not completed their educations and have little job experience.

The concept of economic rent would be more applicable to the earnings of

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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