Question 1

Why has the free market system produced the most rapid rates of growth of any economic system?

Accepted Answer

The features of competitive markets put

Question 2

One implication of human capital theory is that college graduates should earn substantially less than high school graduates.

Accepted Answer

A) True 
 B)False

Question 3

Unions can only achieve wage gains by sacrificing employment.

Accepted Answer

A) True 
 B)False

Question 4

The goal of a union may be to maximize the

Accepted Answer

A) number of union members. 
B) income received by workers in the relevant industry. 
C) number of workers employed in the relevant industry. 
D) All of the above are correct. 
A) number of union members. 
B) income received by workers in the relevant industry. 
C) number of workers employed in the relevant industry. 
D) All of the above are correct.

Question 5

Price competition among firms has proved to be more important than the introduction of new products.

Accepted Answer

A) True 
 B)False

Question 6

In many high-tech industries in the economy, such as computers, medical equipment, and automobiles

Accepted Answer

A) price competition is utilized by firms more than innovation to compete with rivals. 
B) firms compete on the basis of innovation only; never engaging in price competition. 
C) innovation is utilized by firms to compete with rivals more than price competition. 
D) firms use price competition only; never engaging in innovation to compete with rivals. 
E) firms utilize innovation and price competition equally to compete with rivals. 
A) price competition is utilized by firms more than innovation to compete with rivals. 
B) firms compete on the basis of innovation only; never engaging in price competition. 
C) innovation is utilized by firms to compete with rivals more than price competition. 
D) firms use price competition only; never engaging in innovation to compete with rivals. 
E) firms utilize innovation and price competition equally to compete with rivals.

Question 7

The psychological rewards of inventing a new product generally result in ____ profits for entrepreneurs.

Accepted Answer

A) below average 
B) only average 
C) above average 
D) indeterminate 
A) below average 
B) only average 
C) above average 
D) indeterminate

Question 8

Unionism is much more prevalent in the United States than in other industrialized countries.

Accepted Answer

A) True 
 B)False

Question 9

What are the three noteworthy labor market trends that Americans have experienced for about two decades?

Accepted Answer

For about two decades Americans have exp

Question 10

Which of the following observations concerning labor cost patterns over the last century is true?

Accepted Answer

A) Average real wages started rising after 1973. 
B) Hourly compensation rates have fallen dramatically. 
C) Compensation growth slowed markedly. 
D) Average hours worked per week have increased by almost 50 percent. 
A) Average real wages started rising after 1973. 
B) Hourly compensation rates have fallen dramatically. 
C) Compensation growth slowed markedly. 
D) Average hours worked per week have increased by almost 50 percent.

Question 11

The derived demand and, consequently, the demand curve for labor are determined by

Accepted Answer

A) labor's wage. 
B) labor's marginal revenue. 
C) the marginal cost of the input labor. 
D) labor's marginal revenue product. 
A) labor's wage. 
B) labor's marginal revenue. 
C) the marginal cost of the input labor. 
D) labor's marginal revenue product.

Question 12

The term "bilateral monopoly" refers to market situations in which

Accepted Answer

A) there are two participants on the selling side. 
B) there are two participants on the buying side. 
C) there is a monopoly on the selling side and a monopsony on the buying side. 
D) a monopoly has evaded antitrust laws. 
A) there are two participants on the selling side. 
B) there are two participants on the buying side. 
C) there is a monopoly on the selling side and a monopsony on the buying side. 
D) a monopoly has evaded antitrust laws.

Question 13

Average growth rates of per capita income were close to zero, on average, prior to the Industrial Revolution.

Accepted Answer

A) True 
 B)False

Question 14

Recent studies suggest that a rise in the minimum wage results in a substantial cut in the demand for teen labor.

Accepted Answer

A) True 
 B)False

Question 15

The government enacted minimum wage legislation to protect skilled workers.

Accepted Answer

A) True 
 B)False

Question 16

A minimum wage law is predicted to produce

Accepted Answer

A) higher unemployment among young and inexperienced workers. 
B) higher unemployment among all workers. 
C) lower unemployment among young and inexperienced workers. 
D) increased hiring of young and inexperienced workers. 
A) higher unemployment among young and inexperienced workers. 
B) higher unemployment among all workers. 
C) lower unemployment among young and inexperienced workers. 
D) increased hiring of young and inexperienced workers.

Question 17

A firm will tend to follow competitors when they increase spending on R&D, but will not follow them when they decrease such spending.

Accepted Answer

A) True 
 B)False

Question 18

Evidence indicates that the average economic profits of invention are

Accepted Answer

A) well above zero. 
B) slightly above zero. 
C) equal to zero. 
D) less than zero. 
A) well above zero. 
B) slightly above zero. 
C) equal to zero. 
D) less than zero.

Question 19

Economic rents can lead to large wage differentials.

Accepted Answer

A) True 
 B)False

Question 20

Innovation that improves machinery, power sources and other capital equipment will increase the demand for labor in the short run.

Accepted Answer

A) True 
 B)False

Exam 19: Labor and Entrepreneurship: the Human Inputs

Why has the free market system produced the most rapid rates of growth of any economic system?

One implication of human capital theory is that college graduates should earn substantially less than high school graduates.

Unions can only achieve wage gains by sacrificing employment.

The goal of a union may be to maximize the

Price competition among firms has proved to be more important than the introduction of new products.

In many high-tech industries in the economy, such as computers, medical equipment, and automobiles

The psychological rewards of inventing a new product generally result in ____ profits for entrepreneurs.

Unionism is much more prevalent in the United States than in other industrialized countries.

What are the three noteworthy labor market trends that Americans have experienced for about two decades?

Which of the following observations concerning labor cost patterns over the last century is true?

The derived demand and, consequently, the demand curve for labor are determined by

The term "bilateral monopoly" refers to market situations in which

Average growth rates of per capita income were close to zero, on average, prior to the Industrial Revolution.

Recent studies suggest that a rise in the minimum wage results in a substantial cut in the demand for teen labor.

The government enacted minimum wage legislation to protect skilled workers.

A minimum wage law is predicted to produce

A firm will tend to follow competitors when they increase spending on R&D, but will not follow them when they decrease such spending.

Evidence indicates that the average economic profits of invention are

Economic rents can lead to large wage differentials.

Innovation that improves machinery, power sources and other capital equipment will increase the demand for labor in the short run.

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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