Question 1

If the area between the line of equality and the Lorenz curve is 1,250 and the entire area beneath the line of equality is 5,000, the Gini ratio is

Accepted Answer

A) 1,250. 
B) 0.80. 
C) 0.25. 
D) 0.33. 
E) 4.00. 
A) 1,250. 
B) 0.80. 
C) 0.25. 
D) 0.33. 
E) 4.00.

Question 2

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Consider the Lorenz curves in Figure 19.1.2.Which point indicates that the poorest 20 percent of families earn 9 percent of the income?

Accepted Answer

A) a 
B) b 
C) c 
D) d 
E) the origin 
A) a 
B) b 
C) c 
D) d 
E) the origin

Question 3

Among Canada, Finland, and South Africa, income is distributed most equally in ________ and least equally in ________.

Accepted Answer

A) South Africa; Finland 
B) Canada; South Africa 
C) South Africa; Canada 
D) Finland; Canada 
E) Finland; South Africa 
A) South Africa; Finland 
B) Canada; South Africa 
C) South Africa; Canada 
D) Finland; Canada 
E) Finland; South Africa

Question 4

In Canada, the low-income cut-off level for a family is when ________ or more of income is spent on food, shelter, and clothing.

Accepted Answer

A) 33.6 percent 
B) 43.6 percent 
C) 53.6 percent 
D) 63.6 percent 
E) 73.6 percent 
A) 33.6 percent 
B) 43.6 percent 
C) 53.6 percent 
D) 63.6 percent 
E) 73.6 percent

Question 5

A firm's value of marginal product of labour curve is also its

Accepted Answer

A) marginal cost curve of labour. 
B) demand curve for labour. 
C) supply curve of labour. 
D) supply curve of output. 
E) marginal product curve. 
A) marginal cost curve of labour. 
B) demand curve for labour. 
C) supply curve of labour. 
D) supply curve of output. 
E) marginal product curve.

Question 6

Use the figure below to answer the following questions.
   
Figure 18.3.1
-Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is controlled by a monopsony, then the monopsonist

Accepted Answer

A) pays a wage rate that is greater than the value of marginal product of labour. 
B) pays a wage rate exactly equal to the value of marginal product of labour. 
C) pays a wage rate that is less than the value of marginal product of labour. 
D) employs more labour hours per week than in a competitive labour market. 
E) pays a wage equal to the marginal cost of labour. 
A) pays a wage rate that is greater than the value of marginal product of labour. 
B) pays a wage rate exactly equal to the value of marginal product of labour. 
C) pays a wage rate that is less than the value of marginal product of labour. 
D) employs more labour hours per week than in a competitive labour market. 
E) pays a wage equal to the marginal cost of labour.

Question 7

A shift in a firm's demand curve for labour occurs when there is a change in the

Accepted Answer

A) wage rate. 
B) opportunity cost of labour. 
C) price of the output. 
D) working-age population. 
E) marginal cost of labour. 
A) wage rate. 
B) opportunity cost of labour. 
C) price of the output. 
D) working-age population. 
E) marginal cost of labour.

Question 8

Use the figure below to answer the following questions.
   
Figure 18.3.1
-Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is controlled by a monopsony, the wage rate is

Accepted Answer

A) $7 an hour. 
B) $6 an hour. 
C) $3 an hour. 
D) $5 an hour. 
E) zero, because the market would shut down. 
A) $7 an hour. 
B) $6 an hour. 
C) $3 an hour. 
D) $5 an hour. 
E) zero, because the market would shut down.

Question 9

Wealth differs from income because

Accepted Answer

A) income is a stock and wealth is a flow. 
B) wealth is derived from income. 
C) income is what you earn and wealth is what you own. 
D) income is what you own and wealth is what you earn. 
E) wealth is preferable to income. 
A) income is a stock and wealth is a flow. 
B) wealth is derived from income. 
C) income is what you earn and wealth is what you own. 
D) income is what you own and wealth is what you earn. 
E) wealth is preferable to income.

Question 10

Poverty is

Accepted Answer

A) an income below the national average income level. 
B) an income below the national median income level. 
C) a state in which a family's income is too low to be able to buy the quantities of food, shelter, and clothing that are deemed necessary. 
D) the income earned by the poorest 20 percent of households. 
E) a state in which a family spends more than 50 percent of its income on food, shelter, and clothing. 
A) an income below the national average income level. 
B) an income below the national median income level. 
C) a state in which a family's income is too low to be able to buy the quantities of food, shelter, and clothing that are deemed necessary. 
D) the income earned by the poorest 20 percent of households. 
E) a state in which a family spends more than 50 percent of its income on food, shelter, and clothing.

Question 11

What is the most an investor would be willing to pay for a stock that will pay $210 next year and nothing before or after?

Accepted Answer

A) $200 regardless of the interest rate. 
B) $200 if the interest rate is 5 percent per year. 
C) $190.91 if the interest rate is 10 percent per year. 
D) B and C. 
E) None of the above. 
A) $200 regardless of the interest rate. 
B) $200 if the interest rate is 5 percent per year. 
C) $190.91 if the interest rate is 10 percent per year. 
D) B and C. 
E) None of the above.

Question 12

The value of marginal product is

Accepted Answer

A) the value to the firm of hiring one more unit of a factor of production. 
B) the price of a unit of output multiplied by the marginal product of the factor of production. 
C) calculated as total revenue divided by the total quantity employed. 
D) calculated as marginal product divided by marginal benefit. 
E) calculated as marginal product divided by the price of a unit of output . 
A) the value to the firm of hiring one more unit of a factor of production. 
B) the price of a unit of output multiplied by the marginal product of the factor of production. 
C) calculated as total revenue divided by the total quantity employed. 
D) calculated as marginal product divided by marginal benefit. 
E) calculated as marginal product divided by the price of a unit of output .

Question 13

If the wage rate increases, the substitution 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 14

When the price of a firm's output increases,

Accepted Answer

A) the supply of labour increases. 
B) the firm hires less labour. 
C) the marginal product of labour increases. 
D) the firm's demand for labour curve shifts leftward. 
E) the value of marginal product of labour increases. 
A) the supply of labour increases. 
B) the firm hires less labour. 
C) the marginal product of labour increases. 
D) the firm's demand for labour curve shifts leftward. 
E) the value of marginal product of labour increases.

Question 15

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Refer to Figure 19.1.2.What is curve A called?

Accepted Answer

A) market distribution line 
B) line of equality 
C) fairness line 
D) low-income cut-off line 
E) after-tax income 
A) market distribution line 
B) line of equality 
C) fairness line 
D) low-income cut-off line 
E) after-tax income

Question 16

If discrimination takes the form of consumers discriminating against a group of workers, the effect on this group of workers will be to shift their

Accepted Answer

A) value of marginal product curve rightward and increase their wage rate. 
B) value of marginal product curve leftward and decrease their wage rate. 
C) value of marginal product curve rightward and decrease their wage rate. 
D) supply of labour curve leftward and increase their wage rate. 
E) supply of labour curve rightward and decrease their wage rate. 
A) value of marginal product curve rightward and increase their wage rate. 
B) value of marginal product curve leftward and decrease their wage rate. 
C) value of marginal product curve rightward and decrease their wage rate. 
D) supply of labour curve leftward and increase their wage rate. 
E) supply of labour curve rightward and decrease their wage rate.

Question 17

If the wage rate increases, 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 18

The demand for high-skilled labour is derived from the

Accepted Answer

A) exploitation of the low-skilled workers. 
B) marginal cost of production. 
C) lower wage of the labour. 
D) supply of the high-skilled labourers. 
E) value of marginal product of high-skilled labour. 
A) exploitation of the low-skilled workers. 
B) marginal cost of production. 
C) lower wage of the labour. 
D) supply of the high-skilled labourers. 
E) value of marginal product of high-skilled labour.

Question 19

Suppose a profit-maximizing firm hires labour in a competitive labour market.If the value of marginal product of labour is less than the wage rate, the firm should

Accepted Answer

A) increase the wage rate. 
B) decrease the wage rate. 
C) increase the quantity of labour it hires. 
D) decrease the quantity of labour it hires. 
E) shut down. 
A) increase the wage rate. 
B) decrease the wage rate. 
C) increase the quantity of labour it hires. 
D) decrease the quantity of labour it hires. 
E) shut down.

Question 20

Use the figure below to answer the following questions.
   
Figure 19.3.5
-Refer to Figure 19.3.5.This figure shows the labour supply curves and the value of marginal product curves for high-skilled and low-skilled workers.If the labour markets are competitive, then for a 40-hour work week, high-skilled workers must be paid

Accepted Answer

A) an extra $3 to compensate for the cost of acquiring their human capital and for their increased productivity. 
B) an extra $20 to compensate for the cost of acquiring their human capital and for their increased productivity. 
C) an extra $120 to compensate for the cost of acquiring their human capital and for their increased productivity. 
D) an extra $300 to compensate for the cost of acquiring their human capital and for their enhanced productivity. 
E) an extra $180 to compensate for the cost of acquiring their human capital and for their increased productivity. 
A) an extra $3 to compensate for the cost of acquiring their human capital and for their increased productivity. 
B) an extra $20 to compensate for the cost of acquiring their human capital and for their increased productivity. 
C) an extra $120 to compensate for the cost of acquiring their human capital and for their increased productivity. 
D) an extra $300 to compensate for the cost of acquiring their human capital and for their enhanced productivity. 
E) an extra $180 to compensate for the cost of acquiring their human capital and for their increased productivity.

If the area between the line of equality and the Lorenz curve is 1,250 and the entire area beneath the line of equality is 5,000, the Gini ratio is

Use the figure below to answer the following questions. Figure 19.1.2 -Consider the Lorenz curves in Figure 19.1.2.Which point indicates that the poorest 20 percent of families earn 9 percent of the income?

Among Canada, Finland, and South Africa, income is distributed most equally in and least equally in .

In Canada, the low-income cut-off level for a family is when ________ or more of income is spent on food, shelter, and clothing.

A firm's value of marginal product of labour curve is also its

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is controlled by a monopsony, then the monopsonist

A shift in a firm's demand curve for labour occurs when there is a change in the

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is controlled by a monopsony, the wage rate is

Wealth differs from income because

Poverty is

What is the most an investor would be willing to pay for a stock that will pay $210 next year and nothing before or after?

The value of marginal product is

If the wage rate increases, the substitution effect gives a household the incentive to

When the price of a firm's output increases,

Use the figure below to answer the following questions. Figure 19.1.2 -Refer to Figure 19.1.2.What is curve A called?

If discrimination takes the form of consumers discriminating against a group of workers, the effect on this group of workers will be to shift their

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

The demand for high-skilled labour is derived from the

Suppose a profit-maximizing firm hires labour in a competitive labour market.If the value of marginal product of labour is less than the wage rate, the firm should

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

If the area between the line of equality and the Lorenz curve is 1,250 and the entire area beneath the line of equality is 5,000, the Gini ratio is

Use the figure below to answer the following questions. Figure 19.1.2 -Consider the Lorenz curves in Figure 19.1.2.Which point indicates that the poorest 20 percent of families earn 9 percent of the income?

Among Canada, Finland, and South Africa, income is distributed most equally in ________ and least equally in ________.

In Canada, the low-income cut-off level for a family is when ________ or more of income is spent on food, shelter, and clothing.

A firm's value of marginal product of labour curve is also its

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is controlled by a monopsony, then the monopsonist

A shift in a firm's demand curve for labour occurs when there is a change in the

Use the figure below to answer the following questions. Figure 18.3.1 -Refer to Figure 18.3.1.This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve.If this labour market is controlled by a monopsony, the wage rate is

Wealth differs from income because

Poverty is

What is the most an investor would be willing to pay for a stock that will pay $210 next year and nothing before or after?

The value of marginal product is

If the wage rate increases, the substitution effect gives a household the incentive to

When the price of a firm's output increases,

Use the figure below to answer the following questions. Figure 19.1.2 -Refer to Figure 19.1.2.What is curve A called?

If discrimination takes the form of consumers discriminating against a group of workers, the effect on this group of workers will be to shift their

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

The demand for high-skilled labour is derived from the

Suppose a profit-maximizing firm hires labour in a competitive labour market.If the value of marginal product of labour is less than the wage rate, the firm should

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

Among Canada, Finland, and South Africa, income is distributed most equally in and least equally in .