Exam 13: Labor Markets, Poverty, and Income Distribution

Suppose Sarah has been offered a position as web designer at Firm A and Firm B. Both firms require their employees to work for 9 hours a day, but Firm A allows its employees to have a flexible work schedule, while Firm B requires its employees to be at work from 9am to 5pm. Otherwise, the jobs are identical. You would expect:

In professional baseball, some players earn over $20 million per year, while the average salary is about $4 million per year. The most likely explanation for this is that:

A firm's demand for labor will increase if the:

In the market for labor, the demand function describes

Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. If Leo only values income and not how the income was acquired, then he must earn ________ to be as well off as when he earns nothing and receives benefits.

Espresso Yourself Coffee Shop hires workers in a competitive labor market to make coffee. The ingredients required to make each cup of coffee cost 50 cents. The coffee shop's hourly output of coffee varies with the number of workers hired, as shown in the table. Each cup of coffee sells for $2.00. Number df wurkers Caftee (cups/hour) 0 0 1 25 2 45 3 60 4 70 5 75   The marginal product of the third worker is ________ than the marginal product of the second worker, implying that ________.

If the labor market for doctors is perfectly competitive, then an increase in the demand for doctors is likely to cause:

If workers in one part of the labor market unionize, then all else equal, we would expect the wages of unionized workers to ________, and the wages of nonunionized workers to ________.

An in-kind transfer payment is:

Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table.   Warkers Puges/huur 0 0 1 40 2 75 3 105 4 125 5 140 6 150 7 155   If the market price of each page is $5, the first worker's VMP is ________ per hour, and the third worker's VMP is ________ per hour.

The union wage premium refers to the:

Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table.   Warkers Puges/huur 0 0 1 40 2 75 3 105 4 125 5 140 6 150 7 155   If each page sells for $2 and the market wage is $15 per hour, then this firm will hire ________ workers per hour.

Sam owns a candy factory and hires workers in a competitive labor market to pack cases of candy. The company's weekly output of cases of candy varies with the number of workers hired, as shown in the following table:   Number d warkers Cases/reek 0 0 1 160 2 310 3 450 4 580 5 700 6 810   If each case sells for $5 more than the cost of the materials used in producing it, and the competitive market wage is $625/week, then how many workers should Sam hire each week?

The additional output a firm gets from hiring an additional unit of labor is the

Jobs in which there is a higher risk of injury or death will:

Gino's Pizza shop hires workers in a competitive market to make pizza. The ingredients required to make each pizza cost $5. Daily output at Gino's Pizza varies with the number of workers hired, as shown in the table:   Number di warkers Pizfas/day 0 0 1 16 2 36 3 54 4 70 5 84 6 96   If the pizzas sell for $10 each, and the competitive market wage is $75 per day, Gino will hire ________ workers and produce ________ pizzas per day.

A labor union in a labor market is analogous to a(n)________ in an output market.

Unlike the minimum wage, the Earned Income Tax Credit does not:

A firm is unlikely to hire a worker if:

Suppose the elasticity of labor demand is less than 1 in absolute value. Imposing a minimum wage above the equilibrium wage will: