Question 1

Exhibit 10-3 Supply and demand curves for food servers
  
-If the equilibrium wage rate in Exhibit 10-3 increased,the cause could be that:

Accepted Answer

A)  the supply of labor increased. 
B)  the demand for labor decreased. 
C)  either the demand for labor increased or the supply of labor decreased. 
D)  none of the above. 
A)  the supply of labor increased. 
B)  the demand for labor decreased. 
C)  either the demand for labor increased or the supply of labor decreased. 
D)  none of the above.

Question 2

If cats become a more popular pet in the United States than dogs,what can we expect to happen to the market for cat food workers?

Accepted Answer

A)  MP increases. 
B)  MRP increases. 
C)  MP decreases. 
D)  MRP decreases. 
E)  Wage decreases. 
A)  MP increases. 
B)  MRP increases. 
C)  MP decreases. 
D)  MRP decreases. 
E)  Wage decreases.

Question 3

The demand for labor curve is identical to the:

Accepted Answer

A)  total wage cost curve. 
B)  marginal resource curve. 
C)  total revenue curve. 
D)  marginal revenue product curve. 
E)  marginal revenue curve. 
A)  total wage cost curve. 
B)  marginal resource curve. 
C)  total revenue curve. 
D)  marginal revenue product curve. 
E)  marginal revenue curve.

Question 4

The distribution of income has become more equal since 1929.

Accepted Answer

A) True 
 B)False

Question 5

Exhibit 10-6 Demand for labor curves
  
-In Exhibit 10-6,which of the following could have caused the shift in labor demand from D₁ to D₂?

Accepted Answer

A)  Increase in wages. 
B)  Decrease in wages. 
C)  Decrease in price of product. 
D)  Decrease in demand for the product. 
E)  Increase in the demand for the product. 
A)  Increase in wages. 
B)  Decrease in wages. 
C)  Decrease in price of product. 
D)  Decrease in demand for the product. 
E)  Increase in the demand for the product.

Question 6

If the MRP is less than the wage,the firm should hire more labor.

Accepted Answer

A) True 
 B)False

Question 7

The government defines poverty as an income level less than three times the cost of a minimal diet.

Accepted Answer

A) True 
 B)False

Question 8

A union can influence the equilibrium wage rate by:

Accepted Answer

A)  collective bargaining. 
B)  featherbedding. 
C)  lobbying for legislation to reduce immigration. 
D)  all of the above. 
A)  collective bargaining. 
B)  featherbedding. 
C)  lobbying for legislation to reduce immigration. 
D)  all of the above.

Question 9

A union may negotiate limits on workload in order to increase the demand for labor and raise workers' salaries.This practice is known as:

Accepted Answer

A)  featherbedding. 
B)  human capital formation. 
C)  monopsonistic bargaining. 
D)  artificial demand stimulus. 
A)  featherbedding. 
B)  human capital formation. 
C)  monopsonistic bargaining. 
D)  artificial demand stimulus.

Question 10

Which of the following best explains the decline in marginal revenue product (MRP)?

Accepted Answer

A)  As more and more of a variable factor (ex: Labor) is added to a fixed factor (ex: capital), total product become smaller and smaller. 
B)  As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal product become smaller and smaller as defined by the law of diminishing returns. 
C)  As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal utility becomes smaller and smaller. 
D)  As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal revenue product (MRP) become larger and larger. 
A)  As more and more of a variable factor (ex: Labor) is added to a fixed factor (ex: capital), total product become smaller and smaller. 
B)  As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal product become smaller and smaller as defined by the law of diminishing returns. 
C)  As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal utility becomes smaller and smaller. 
D)  As more and more of a variable factor (ex: labor) is added to a fixed factor (ex: capital), marginal revenue product (MRP) become larger and larger.

Question 11

Assume Ajax Company employs 100 workers and total revenue is $400 thousand.When Ajax Company employs 101 workers,total revenue is $405 thousand.The marginal revenue product of the 101st workers is:

Accepted Answer

A)  $40 thousand. 
B)  $5 thousand. 
C)  $405 thousand. 
D)  none of the above. 
A)  $40 thousand. 
B)  $5 thousand. 
C)  $405 thousand. 
D)  none of the above.

Question 12

An increase in demand for French fries will cause equilibrium wage rates:

Accepted Answer

A)  and quantities of potato workers hired to rise. 
B)  and quantities of potato workers hired to fall 
C)  to rise and quantities of potato workers hired to fall. 
D)  to fall and quantities of potato workers hired to rise 
E)  and quantities of potato workers hired to stay the same 
A)  and quantities of potato workers hired to rise. 
B)  and quantities of potato workers hired to fall 
C)  to rise and quantities of potato workers hired to fall. 
D)  to fall and quantities of potato workers hired to rise 
E)  and quantities of potato workers hired to stay the same

Question 13

Union membership as a percentage of the civilian labor force is lower in the United States than in Germany or Japan.

Accepted Answer

A) True 
 B)False

Question 14

The firm's demand for labor curve is exactly the same as the:

Accepted Answer

A)  wage rate. 
B)  price of the output. 
C)  MRP curve. 
D)  MP curve. 
E)  labor supply curve. 
A)  wage rate. 
B)  price of the output. 
C)  MRP curve. 
D)  MP curve. 
E)  labor supply curve.

Question 15

When a firm hires an additional unit of labor,the increase in a firm's total revenues is known as the marginal:

Accepted Answer

A)  cost. 
B)  product. 
C)  utility product. 
D)  revenue product. 
A)  cost. 
B)  product. 
C)  utility product. 
D)  revenue product.

Question 16

Which of the following best describes marginal revenue product (MRP)?

Accepted Answer

A)  MRP is the level of total revenue generated by total employment of labor and capital. 
B)  MRP is the change in total revenue caused by a one-unit increase in output. 
C)  MRP is the change in total revenue caused by a one-unit increase in a variable input such as labor. 
D)  MRP is total revenue divided by the total quantity of a variable input used. 
A)  MRP is the level of total revenue generated by total employment of labor and capital. 
B)  MRP is the change in total revenue caused by a one-unit increase in output. 
C)  MRP is the change in total revenue caused by a one-unit increase in a variable input such as labor. 
D)  MRP is total revenue divided by the total quantity of a variable input used.

Question 17

Which of the following can shift the labor demand curve to the right?

Accepted Answer

A)  Decrease in product price. 
B)  Increase in wages. 
C)  Decrease in wages. 
D)  Decrease in the MP. 
E)  Increase in productivity. 
A)  Decrease in product price. 
B)  Increase in wages. 
C)  Decrease in wages. 
D)  Decrease in the MP. 
E)  Increase in productivity.

Question 18

Wage discrimination means workers with equal productivity are paid unequal wages,or workers with unequal productivity are paid equal wages.

Accepted Answer

A) True 
 B)False

Question 19

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.

Accepted Answer

A) True 
 B)False

Question 20

The poverty line:

Accepted Answer

A)  separates those on welfare from those not on welfare. 
B)  equals three times an economy food budget. 
C)  equals the median income level. 
D)  all of the above. 
A)  separates those on welfare from those not on welfare. 
B)  equals three times an economy food budget. 
C)  equals the median income level. 
D)  all of the above.

Exam 10: Labor Markets and Income Distribution

Exhibit 10-3 Supply and demand curves for food servers -If the equilibrium wage rate in Exhibit 10-3 increased,the cause could be that:

If cats become a more popular pet in the United States than dogs,what can we expect to happen to the market for cat food workers?

The demand for labor curve is identical to the:

The distribution of income has become more equal since 1929.

Exhibit 10-6 Demand for labor curves -In Exhibit 10-6,which of the following could have caused the shift in labor demand from D₁ to D₂?

If the MRP is less than the wage,the firm should hire more labor.

The government defines poverty as an income level less than three times the cost of a minimal diet.

A union can influence the equilibrium wage rate by:

A union may negotiate limits on workload in order to increase the demand for labor and raise workers' salaries.This practice is known as:

Which of the following best explains the decline in marginal revenue product (MRP)?

Assume Ajax Company employs 100 workers and total revenue is $400 thousand.When Ajax Company employs 101 workers,total revenue is $405 thousand.The marginal revenue product of the 101st workers is:

An increase in demand for French fries will cause equilibrium wage rates:

Union membership as a percentage of the civilian labor force is lower in the United States than in Germany or Japan.

The firm's demand for labor curve is exactly the same as the:

When a firm hires an additional unit of labor,the increase in a firm's total revenues is known as the marginal:

Which of the following best describes marginal revenue product (MRP)?

Which of the following can shift the labor demand curve to the right?

Wage discrimination means workers with equal productivity are paid unequal wages,or workers with unequal productivity are paid equal wages.

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.

The poverty line:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

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