Question 1

In 2011, what percentage of households received the mode income in Canada?

Accepted Answer

A) 5 percent 
B) 6 percent 
C) 7 percent 
D) 17.4 percent 
E) 20 percent 
A) 5 percent 
B) 6 percent 
C) 7 percent 
D) 17.4 percent 
E) 20 percent C

Question 2

If a strike or lockout occurs in a bilateral monopoly situation, it is usually because

Accepted Answer

A) the demand for labour is relatively inelastic. 
B) the demand for labour is relatively elastic. 
C) the supply of labour is relatively inelastic. 
D) the supply of labour is relatively elastic. 
E) one party has misjudged the costs each party can inflict on the other. 
A) the demand for labour is relatively inelastic. 
B) the demand for labour is relatively elastic. 
C) the supply of labour is relatively inelastic. 
D) the supply of labour is relatively elastic. 
E) one party has misjudged the costs each party can inflict on the other. E

Question 3

The Gini coefficient for a perfectly equal distribution of income is

Accepted Answer

A) equal to zero. 
B) equal to 1. 
C) equal to 100. 
D) equal to infinity. 
E) negative. 
A) equal to zero. 
B) equal to 1. 
C) equal to 100. 
D) equal to infinity. 
E) negative. A

Question 4

If the marginal product of a baker is 10 loaves of bread, and the price of a loaf of bread is $2, the baker's value of marginal product is

Accepted Answer

A) $2.00. 
B) $20.00. 
C) $0.20. 
D) $5.00. 
E) $12.00. 
A) $2.00. 
B) $20.00. 
C) $0.20. 
D) $5.00. 
E) $12.00.

Question 5

Natural resources that are depleted as they are used

Accepted Answer

A) should not be used. 
B) are called nonrenewable natural resources. 
C) should be used for only highly valued purposes. 
D) should be conserved for future generations. 
E) are called renewable natural resources. 
A) should not be used. 
B) are called nonrenewable natural resources. 
C) should be used for only highly valued purposes. 
D) should be conserved for future generations. 
E) are called renewable natural resources.

Question 6

A firm can sell its output for $40 per unit.When it increases its labour force from 4 workers to 5 workers, its output increases from 15 to 17 units.The value of marginal product of the 5th worker is

Accepted Answer

A) $80. 
B) $40. 
C) $600. 
D) $680. 
E) $136. 
A) $80. 
B) $40. 
C) $600. 
D) $680. 
E) $136.

Question 7

Which of the following statements is false? Human capital

Accepted Answer

A) is the accumulated skill and knowledge of human beings. 
B) is costly to acquire. 
C) increases from on-the-job training. 
D) increases from higher wages. 
E) increases from education. 
A) is the accumulated skill and knowledge of human beings. 
B) is costly to acquire. 
C) increases from on-the-job training. 
D) increases from higher wages. 
E) increases from education.

Question 8

Since 1976 the Canadian Gini ratio has

Accepted Answer

A) decreased and then increased. 
B) decreased. 
C) increased. 
D) been approximately equal to zero. 
E) increased and then decreased. 
A) decreased and then increased. 
B) decreased. 
C) increased. 
D) been approximately equal to zero. 
E) increased and then decreased.

Question 9

Technological change ________ the demand for high-skilled workers and ________ the demand for low-skilled workers.As a result, income inequality ________.

Accepted Answer

A) increases; decreases; decreases 
B) increases; decreases; increases 
C) increases; increases; decreases 
D) decreases; decreases; increases 
E) increases; does not change; increases 
A) increases; decreases; decreases 
B) increases; decreases; increases 
C) increases; increases; decreases 
D) decreases; decreases; increases 
E) increases; does not change; increases

Question 10

For a monopsonist facing an upward-sloping supply curve of labour, the marginal cost of labour curve

Accepted Answer

A) intersects the value of marginal product curve of labour at the equilibrium wage rate. 
B) is below and parallel to the supply of labour curve. 
C) is identical to the supply of labour curve. 
D) is above and parallel to the supply of labour curve. 
E) is above the supply curve of labour. 
A) intersects the value of marginal product curve of labour at the equilibrium wage rate. 
B) is below and parallel to the supply of labour curve. 
C) is identical to the supply of labour curve. 
D) is above and parallel to the supply of labour curve. 
E) is above the supply curve of labour.

Question 11

An income Lorenz curve

Accepted Answer

A) graphs the cumulative percentage of income against the cumulative percentage of households. 
B) measures the income among households ranked from the poorest to the richest. 
C) measures the income among households ranked from the richest to the poorest. 
D) measures the factor prices earned by the rich compared with the poor. 
E) is a downward-sloping curve. 
A) graphs the cumulative percentage of income against the cumulative percentage of households. 
B) measures the income among households ranked from the poorest to the richest. 
C) measures the income among households ranked from the richest to the poorest. 
D) measures the factor prices earned by the rich compared with the poor. 
E) is a downward-sloping curve.

Question 12

The labour supply curve may eventually become "backward bending" at high wages because

Accepted Answer

A) the income effect of the higher wage is dominated by the substitution effect. 
B) the income effect of the higher wage dominates the substitution effect of the higher wage. 
C) firms will demand added productivity from the workers as the wage reaches very high levels. 
D) firms will demand longer hours in trade for the higher wages. 
E) people get tired of working so many hours and refuse to increase their labour supply. 
A) the income effect of the higher wage is dominated by the substitution effect. 
B) the income effect of the higher wage dominates the substitution effect of the higher wage. 
C) firms will demand added productivity from the workers as the wage reaches very high levels. 
D) firms will demand longer hours in trade for the higher wages. 
E) people get tired of working so many hours and refuse to increase their labour supply.

Question 13

Use the figure below to answer the following questions.
   
Figure 18.3.3
-Refer to Figure 18.3.3.For the monopsonist employer illustrated in this figure, the profit-maximizing wage rate is ________ and the quantity of labour hired is ________.

Accepted Answer

A) $9 per hour; 300 hours 
B) $8 per hour; 350 hours 
C) $8 per hour; 500 hours 
D) $7 per hour; 400 hours 
E) $6 per hour; 300 hours 
A) $9 per hour; 300 hours 
B) $8 per hour; 350 hours 
C) $8 per hour; 500 hours 
D) $7 per hour; 400 hours 
E) $6 per hour; 300 hours

Question 14

Tim is opening a new online store.He plans to hire two workers at $10 an hour.Tim is also considering buying or leasing some new computers.The purchase price of a computer is $900 and after three years it is worthless.The annual cost of leasing a computer is $450.The price of capital equipment is ________.The rental rate of capital is ________.

Accepted Answer

A) $900; $450 
B) $450; $450 
C) $900; $900 
D) $450; $900 
E) 100 percent; 50 percent 
A) $900; $450 
B) $450; $450 
C) $900; $900 
D) $450; $900 
E) 100 percent; 50 percent

Question 15

Use the figure below to answer the following question.
   
Figure 19.3.3
-Refer to Figure 19.3.3.At any given level of employment for high-skilled and low-skilled workers, the vertical distance between the two supply curves

Accepted Answer

A) disappears if there is free entry into the skill market. 
B) disappears if there is equal pay for work of equal value. 
C) is created by discrimination against low-skilled workers. 
D) is the compensation required for the cost of acquiring human capital. 
E) equals the value of marginal product of skill. 
A) disappears if there is free entry into the skill market. 
B) disappears if there is equal pay for work of equal value. 
C) is created by discrimination against low-skilled workers. 
D) is the compensation required for the cost of acquiring human capital. 
E) equals the value of marginal product of skill.

Question 16

A Lorenz curve illustrates the distribution of income by graphing the

Accepted Answer

A) cumulative percentage of income received and the cumulative percentage of households. 
B) chance of a family earning a specific income. 
C) wealth earned by a cumulative percentage of households. 
D) cumulative frequency of specific incomes. 
E) percentage change in income for a percentage change in population. 
A) cumulative percentage of income received and the cumulative percentage of households. 
B) chance of a family earning a specific income. 
C) wealth earned by a cumulative percentage of households. 
D) cumulative frequency of specific incomes. 
E) percentage change in income for a percentage change in population.

Question 17

In 2011, the poorest 20 percent of households received what percentage of the nation's after-tax income?

Accepted Answer

A) 10.6 percent 
B) 4.8 percent 
C) 24.1 percent 
D) 16.3 percent 
E) 17.4 percent 
A) 10.6 percent 
B) 4.8 percent 
C) 24.1 percent 
D) 16.3 percent 
E) 17.4 percent

Question 18

The substitution effect on labour supply refers to the degree to which

Accepted Answer

A) the firm can substitute other factors of production for labour. 
B) buyers can substitute other products for the products that are made by organized labour. 
C) labour is willing to substitute nonlabour income for wages. 
D) labour prefers to substitute nonmonetary payments for money wages. 
E) labour is willing to substitute work for leisure. 
A) the firm can substitute other factors of production for labour. 
B) buyers can substitute other products for the products that are made by organized labour. 
C) labour is willing to substitute nonlabour income for wages. 
D) labour prefers to substitute nonmonetary payments for money wages. 
E) labour is willing to substitute work for leisure.

Question 19

If the wage rate decreases, the income effect gives a household the incentive to

Accepted Answer

A) raise its reservation wage. 
B) increase leisure and decrease work. 
C) increase work and decrease leisure. 
D) increase both work and leisure. 
E) decrease both work and leisure. 
A) raise its reservation wage. 
B) increase leisure and decrease work. 
C) increase work and decrease leisure. 
D) increase both work and leisure. 
E) decrease both work and leisure.

Question 20

Unions try to raise minimum wages because

Accepted Answer

A) they wish to encourage employment among the poor. 
B) they wish to help those on minimum wages. 
C) this will decrease the supply of labour in their industry. 
D) this will increase the demand for labour in their industry. 
E) they want the minimum wage to be a living wage. 
A) they wish to encourage employment among the poor. 
B) they wish to help those on minimum wages. 
C) this will decrease the supply of labour in their industry. 
D) this will increase the demand for labour in their industry. 
E) they want the minimum wage to be a living wage.

In 2011, what percentage of households received the mode income in Canada?

If a strike or lockout occurs in a bilateral monopoly situation, it is usually because

The Gini coefficient for a perfectly equal distribution of income is

If the marginal product of a baker is 10 loaves of bread, and the price of a loaf of bread is $2, the baker's value of marginal product is

Natural resources that are depleted as they are used

A firm can sell its output for $40 per unit.When it increases its labour force from 4 workers to 5 workers, its output increases from 15 to 17 units.The value of marginal product of the 5th worker is

Which of the following statements is false? Human capital

Since 1976 the Canadian Gini ratio has

Technological change the demand for high-skilled workers and the demand for low-skilled workers.As a result, income inequality .

For a monopsonist facing an upward-sloping supply curve of labour, the marginal cost of labour curve

An income Lorenz curve

The labour supply curve may eventually become "backward bending" at high wages because

Use the figure below to answer the following questions. Figure 18.3.3 -Refer to Figure 18.3.3.For the monopsonist employer illustrated in this figure, the profit-maximizing wage rate is and the quantity of labour hired is .

Use the figure below to answer the following question. Figure 19.3.3 -Refer to Figure 19.3.3.At any given level of employment for high-skilled and low-skilled workers, the vertical distance between the two supply curves

A Lorenz curve illustrates the distribution of income by graphing the

In 2011, the poorest 20 percent of households received what percentage of the nation's after-tax income?

The substitution effect on labour supply refers to the degree to which

If the wage rate decreases, the income effect gives a household the incentive to

Unions try to raise minimum wages because

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Filters

Exam 18: Markets for Factors of Production

In 2011, what percentage of households received the mode income in Canada?

If a strike or lockout occurs in a bilateral monopoly situation, it is usually because

The Gini coefficient for a perfectly equal distribution of income is

If the marginal product of a baker is 10 loaves of bread, and the price of a loaf of bread is $2, the baker's value of marginal product is

Natural resources that are depleted as they are used

A firm can sell its output for $40 per unit.When it increases its labour force from 4 workers to 5 workers, its output increases from 15 to 17 units.The value of marginal product of the 5th worker is

Which of the following statements is false? Human capital

Since 1976 the Canadian Gini ratio has

Technological change ________ the demand for high-skilled workers and ________ the demand for low-skilled workers.As a result, income inequality ________.

For a monopsonist facing an upward-sloping supply curve of labour, the marginal cost of labour curve

An income Lorenz curve

The labour supply curve may eventually become "backward bending" at high wages because

Use the figure below to answer the following questions. Figure 18.3.3 -Refer to Figure 18.3.3.For the monopsonist employer illustrated in this figure, the profit-maximizing wage rate is ________ and the quantity of labour hired is ________.

Use the figure below to answer the following question. Figure 19.3.3 -Refer to Figure 19.3.3.At any given level of employment for high-skilled and low-skilled workers, the vertical distance between the two supply curves

A Lorenz curve illustrates the distribution of income by graphing the

In 2011, the poorest 20 percent of households received what percentage of the nation's after-tax income?

The substitution effect on labour supply refers to the degree to which

If the wage rate decreases, the income effect gives a household the incentive to

Unions try to raise minimum wages because

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Filters

Technological change the demand for high-skilled workers and the demand for low-skilled workers.As a result, income inequality .

Use the figure below to answer the following questions. Figure 18.3.3 -Refer to Figure 18.3.3.For the monopsonist employer illustrated in this figure, the profit-maximizing wage rate is and the quantity of labour hired is .