Question 1

Choose the statement that is incorrect.

Accepted Answer

A) Labour services are the physical and mental work effort that people supply to produce goods and services. 
B) A labour market is a collection of people and firms who trade labour services. 
C) The price of labour services is the wage rate. 
D) Most labour services are traded on a contract, called a job. 
E) All labour markets are competitive. 
A) Labour services are the physical and mental work effort that people supply to produce goods and services. 
B) A labour market is a collection of people and firms who trade labour services. 
C) The price of labour services is the wage rate. 
D) Most labour services are traded on a contract, called a job. 
E) All labour markets are competitive.

Question 2

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 hires

Accepted Answer

A) zero hours of labour. 
B) 50 hours of labour. 
C) 75 hours of labour. 
D) 100 hours of labour. 
E) greater than 100 hours of labour. 
A) zero hours of labour. 
B) 50 hours of labour. 
C) 75 hours of labour. 
D) 100 hours of labour. 
E) greater than 100 hours of labour.

Question 3

After-tax income equals

Accepted Answer

A) total income minus tax payments by households to governments. 
B) total income minus tax payments by households to firms. 
C) total income plus tax payments by households to governments. 
D) market income plus cash payments to households by governments. 
E) market income minus tax payments by households to governments. 
A) total income minus tax payments by households to governments. 
B) total income minus tax payments by households to firms. 
C) total income plus tax payments by households to governments. 
D) market income plus cash payments to households by governments. 
E) market income minus tax payments by households to governments.

Question 4

Use the figure below to answer the following questions.
   
Figure 19.3.2
-Refer to Figure 19.3.2.At an employment level of 20 hours per week, firms are willing to pay

Accepted Answer

A) a wage rate of $7 an hour to low-skilled workers. 
B) a maximum of $5 an hour to high-skilled workers. 
C) up to $7 an hour for high-skilled workers. 
D) the same for high-skilled workers as for low-skilled workers. 
E) $3 an hour more for high-skilled workers. 
A) a wage rate of $7 an hour to low-skilled workers. 
B) a maximum of $5 an hour to high-skilled workers. 
C) up to $7 an hour for high-skilled workers. 
D) the same for high-skilled workers as for low-skilled workers. 
E) $3 an hour more for high-skilled workers.

Question 5

Which one of the following would unions be most likely to support?

Accepted Answer

A) increased barriers to imports 
B) eased immigration restrictions 
C) a decrease in the minimum wage 
D) decreasing demand for the goods their workers produce 
E) decreasing the marginal product of its workers 
A) increased barriers to imports 
B) eased immigration restrictions 
C) a decrease in the minimum wage 
D) decreasing demand for the goods their workers produce 
E) decreasing the marginal product of its workers

Question 6

Which one of the following reduces the inequality of income or wealth relative to the market distribution?

Accepted Answer

A) government payments to the poor 
B) a regressive income tax 
C) large inheritances 
D) assortative mating 
E) large families 
A) government payments to the poor 
B) a regressive income tax 
C) large inheritances 
D) assortative mating 
E) large families

Question 7

Use the figure below to answer the following questions.
   
Figure 18.3.2
-If a union forms to face the monopsonist in Figure 18.3.2, the situation is one of

Accepted Answer

A) binding arbitration. 
B) derived demand. 
C) duopoly. 
D) collusive oligopoly. 
E) bilateral monopoly. 
A) binding arbitration. 
B) derived demand. 
C) duopoly. 
D) collusive oligopoly. 
E) bilateral monopoly.

Question 8

A generation that is wealthy and leaves assets to another generation that is not wealthy

Accepted Answer

A) increases the inequality of the income distribution. 
B) decreases the inequality of the income distribution. 
C) does not change the distribution of income. 
D) proves that inheritance taxes are needed. 
E) is improving efficiency. 
A) increases the inequality of the income distribution. 
B) decreases the inequality of the income distribution. 
C) does not change the distribution of income. 
D) proves that inheritance taxes are needed. 
E) is improving efficiency.

Question 9

A union is formed to restrict labour supply in a previously perfectly competitive labour market.If the union succeeds in raising the wage, everything else remaining the same,

Accepted Answer

A) employment will fall. 
B) employment will rise. 
C) employment will not change. 
D) the total wage bill will rise. 
E) the total wage bill will fall. 
A) employment will fall. 
B) employment will rise. 
C) employment will not change. 
D) the total wage bill will rise. 
E) the total wage bill will fall.

Question 10

Discrimination results in ________ compared to a situation with no discrimination.

Accepted Answer

A) a lower wage rate but no change in the number employed 
B) a higher numbered employed and a lower wage rate 
C) a smaller number employed but no change in the wage rate 
D) a smaller number employed and a lower wage rate 
E) none of the above 
A) a lower wage rate but no change in the number employed 
B) a higher numbered employed and a lower wage rate 
C) a smaller number employed but no change in the wage rate 
D) a smaller number employed and a lower wage rate 
E) none of the above

Question 11

Measured wealth distributions that do not consider the distribution of human capital

Accepted Answer

A) overstate the equality of the income distribution. 
B) understate the inequality of the income distribution. 
C) are correct since human capital is difficult to accurately measure. 
D) overstate the inequality of the wealth distribution. 
E) are correct because the distribution of human capital is about the same as the distribution of non-human wealth. 
A) overstate the equality of the income distribution. 
B) understate the inequality of the income distribution. 
C) are correct since human capital is difficult to accurately measure. 
D) overstate the inequality of the wealth distribution. 
E) are correct because the distribution of human capital is about the same as the distribution of non-human wealth.

Question 12

Choose the correct statement.

Accepted Answer

A) The quantity of land demanded cannot be changed by people's decisions. 
B) The supply of each particular block of land is perfectly inelastic. 
C) The lower the rental rate, other things remaining the same, the smaller is the quantity of land demanded. 
D) Profit-maximizing firms rent the quantity of land at which the value of marginal product of land is equal to the quantity of land demanded. 
E) The supply of land is based on the value of marginal product of land. 
A) The quantity of land demanded cannot be changed by people's decisions. 
B) The supply of each particular block of land is perfectly inelastic. 
C) The lower the rental rate, other things remaining the same, the smaller is the quantity of land demanded. 
D) Profit-maximizing firms rent the quantity of land at which the value of marginal product of land is equal to the quantity of land demanded. 
E) The supply of land is based on the value of marginal product of land.

Question 13

A constraint on union effectiveness is

Accepted Answer

A) the downward-sloping labour demand curve. 
B) the minimum wage law. 
C) the Fair Labour Standards Practices Act. 
D) increasing export competitiveness. 
E) the competition of other unions. 
A) the downward-sloping labour demand curve. 
B) the minimum wage law. 
C) the Fair Labour Standards Practices Act. 
D) increasing export competitiveness. 
E) the competition of other unions.

Question 14

Use the table below to answer the following questions.
Table 19.4.1
  
-In Table 19.4.1, which tax plan is proportional?

Accepted Answer

A) Plan A 
B) Plan B 
C) Plan C 
D) Plan D 
E) impossible to calculate without additional information 
A) Plan A 
B) Plan B 
C) Plan C 
D) Plan D 
E) impossible to calculate without additional information

Question 15

Use the information below to answer the following questions.
Fact 18.4.1
Water is a natural resource that is plentiful in Canada but not plentiful in Arizona and southern California. Suppose Canadians start to export bulk water to Arizona and southern California.
-Refer to Fact 18.4.1.The Hotelling Principle ________ apply to Canada's water because the Hotelling Principle ________.

Accepted Answer

A) does; applies to renewable resources and water is a renewable resource 
B) does; only applies when the interest rate is falling 
C) does not; applies to nonrenewable resources but water is a renewable resource 
D) does not; only applies when the interest rate is rising 
E) does; applies when interest rates are relatively low 
A) does; applies to renewable resources and water is a renewable resource 
B) does; only applies when the interest rate is falling 
C) does not; applies to nonrenewable resources but water is a renewable resource 
D) does not; only applies when the interest rate is rising 
E) does; applies when interest rates are relatively low

Question 16

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.The equilibrium wage rate for low-skilled workers is

Accepted Answer

A) $3 an hour. 
B) $7 an hour. 
C) $6 an hour. 
D) $5 an hour. 
E) $4 an hour. 
A) $3 an hour. 
B) $7 an hour. 
C) $6 an hour. 
D) $5 an hour. 
E) $4 an hour.

Question 17

A monopsony exists when there is

Accepted Answer

A) a single buyer in a market. 
B) a single seller in a market. 
C) a small number of large buyers in a market. 
D) a small number of large sellers in a market. 
E) an agreement amongst sellers in a market to set prices. 
A) a single buyer in a market. 
B) a single seller in a market. 
C) a small number of large buyers in a market. 
D) a small number of large sellers in a market. 
E) an agreement amongst sellers in a market to set prices.

Question 18

In 2011, the mode income received by 6.0 percent of households in Canada was between

Accepted Answer

A) $18,500 and $21,999. 
B) $15,000 and $19,999. 
C) $30,000 and $34,999. 
D) $16,000 and $22,500. 
E) $18,000 and $24,999. 
A) $18,500 and $21,999. 
B) $15,000 and $19,999. 
C) $30,000 and $34,999. 
D) $16,000 and $22,500. 
E) $18,000 and $24,999.

Question 19

A decrease in the price of factors of production that are substitutes for labour shifts the labour

Accepted Answer

A) demand curve leftward. 
B) demand curve rightward. 
C) supply curve leftward. 
D) supply curve rightward. 
E) demand curve leftward and the labour supply curve leftward. 
A) demand curve leftward. 
B) demand curve rightward. 
C) supply curve leftward. 
D) supply curve rightward. 
E) demand curve leftward and the labour supply curve leftward.

Question 20

Use the figure below to answer the following questions.
   
Figure 19.1.2
-Consider the Lorenz curves in Figure 19.1.2.Which Lorenz curve corresponds to the greatest income inequality?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) impossible to tell without additional information 
A) A 
B) B 
C) C 
D) D 
E) impossible to tell without additional information

Choose the statement that is incorrect.

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 hires

After-tax income equals

Use the figure below to answer the following questions. Figure 19.3.2 -Refer to Figure 19.3.2.At an employment level of 20 hours per week, firms are willing to pay

Which one of the following would unions be most likely to support?

Which one of the following reduces the inequality of income or wealth relative to the market distribution?

Use the figure below to answer the following questions. Figure 18.3.2 -If a union forms to face the monopsonist in Figure 18.3.2, the situation is one of

A generation that is wealthy and leaves assets to another generation that is not wealthy

A union is formed to restrict labour supply in a previously perfectly competitive labour market.If the union succeeds in raising the wage, everything else remaining the same,

Discrimination results in ________ compared to a situation with no discrimination.

Measured wealth distributions that do not consider the distribution of human capital

Choose the correct statement.

A constraint on union effectiveness is

Use the table below to answer the following questions. Table 19.4.1 -In Table 19.4.1, which tax plan is proportional?

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.The equilibrium wage rate for low-skilled workers is

A monopsony exists when there is

In 2011, the mode income received by 6.0 percent of households in Canada was between

A decrease in the price of factors of production that are substitutes for labour shifts the labour

Use the figure below to answer the following questions. Figure 19.1.2 -Consider the Lorenz curves in Figure 19.1.2.Which Lorenz curve corresponds to the greatest income inequality?

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

Choose the statement that is incorrect.

After-tax income equals

Use the figure below to answer the following questions. Figure 19.3.2 -Refer to Figure 19.3.2.At an employment level of 20 hours per week, firms are willing to pay

Which one of the following would unions be most likely to support?

Which one of the following reduces the inequality of income or wealth relative to the market distribution?

Use the figure below to answer the following questions. Figure 18.3.2 -If a union forms to face the monopsonist in Figure 18.3.2, the situation is one of

A generation that is wealthy and leaves assets to another generation that is not wealthy

A union is formed to restrict labour supply in a previously perfectly competitive labour market.If the union succeeds in raising the wage, everything else remaining the same,

Discrimination results in ________ compared to a situation with no discrimination.

Measured wealth distributions that do not consider the distribution of human capital

Choose the correct statement.

A constraint on union effectiveness is

Use the table below to answer the following questions. Table 19.4.1 -In Table 19.4.1, which tax plan is proportional?

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.The equilibrium wage rate for low-skilled workers is

A monopsony exists when there is

In 2011, the mode income received by 6.0 percent of households in Canada was between

A decrease in the price of factors of production that are substitutes for labour shifts the labour

Use the figure below to answer the following questions. Figure 19.1.2 -Consider the Lorenz curves in Figure 19.1.2.Which Lorenz curve corresponds to the greatest income inequality?

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