Question 1

What is likely to happen to the supply of firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

Accepted Answer

A) The supply of firemen will fall because there will be fewer fires. 
B) The supply of firemen will increase because there will be fewer fires. 
C) The supply of firemen will remain unchanged because the supply curve relates the number of fire fighters to the wage, not to the number of fires. 
D) The supply of firemen will increase as long as wages paid to workers on new construction projects is also increasing. 
E) The supply of firemen will decrease as long as the property tax-base increases when the new construction projects are completed. 
A) The supply of firemen will fall because there will be fewer fires. 
B) The supply of firemen will increase because there will be fewer fires. 
C) The supply of firemen will remain unchanged because the supply curve relates the number of fire fighters to the wage, not to the number of fires. 
D) The supply of firemen will increase as long as wages paid to workers on new construction projects is also increasing. 
E) The supply of firemen will decrease as long as the property tax-base increases when the new construction projects are completed. C

Question 2

The market for economists in Greenland has recently experienced an increase in the number of economists employed and an increase in the wage of economists. What could explain such a change?

Accepted Answer

A) The demand for economists recently increased while the supply of economists remained unchanged. 
B) The demand for economists recently decreased while the supply of economists remained unchanged. 
C) The demand for economists remained unchanged while the supply of economists increased. 
D) The demand for economists remained unchanged while the supply of economists decreased. 
E) The demand for economists recently decreased while the supply of economists recently increased. 
A) The demand for economists recently increased while the supply of economists remained unchanged. 
B) The demand for economists recently decreased while the supply of economists remained unchanged. 
C) The demand for economists remained unchanged while the supply of economists increased. 
D) The demand for economists remained unchanged while the supply of economists decreased. 
E) The demand for economists recently decreased while the supply of economists recently increased. A

Question 3

In an econometric model, the dependent variable is

Accepted Answer

A) the behavior one is trying to explain. 
B) unchanging across sub-samples. 
C) always the wage. 
D) also known as the residual. 
E) unrelated to the independent variables. 
A) the behavior one is trying to explain. 
B) unchanging across sub-samples. 
C) always the wage. 
D) also known as the residual. 
E) unrelated to the independent variables. A

Question 4

When forming theories, economists must be careful to

Accepted Answer

A) include all known facts and details. 
B) omit crucial factors. 
C) mirror the real world as realistically but as simply as possible. 
D) consider historical behavior and policies. 
E) limit the analysis to two variables. 
A) include all known facts and details. 
B) omit crucial factors. 
C) mirror the real world as realistically but as simply as possible. 
D) consider historical behavior and policies. 
E) limit the analysis to two variables.

Question 5

What type of questions cannot be answered with theory or facts alone?

Accepted Answer

A) Normative questions. 
B) Positive questions. 
C) Factual questions. 
D) Empirical questions. 
E) Econometric questions. 
A) Normative questions. 
B) Positive questions. 
C) Factual questions. 
D) Empirical questions. 
E) Econometric questions.

Question 6

Labor economists sometimes refer to labor demand as "derived" demand. In this context, where does "derived" come from?

Accepted Answer

A) The firm's production function. 
B) The union's willingness to accept a lower wage. 
C) Consumer demand for the firm's product. 
D) The firm's profit. 
E) The degree of competition in the firm's industry. 
A) The firm's production function. 
B) The union's willingness to accept a lower wage. 
C) Consumer demand for the firm's product. 
D) The firm's profit. 
E) The degree of competition in the firm's industry.

Question 7

A firm's labor demand curve is typically

Accepted Answer

A) a vertical line. 
B) a horizontal line. 
C) upward-sloping. 
D) downward-sloping. 
E) associated with a slope equal in absolute value to the slope of the labor supply curve. 
A) a vertical line. 
B) a horizontal line. 
C) upward-sloping. 
D) downward-sloping. 
E) associated with a slope equal in absolute value to the slope of the labor supply curve.

Question 8

Which of the following affects a person's decision to work?

Accepted Answer

A) The price of consumption goods relative to the wage. 
B) The person's income from non-labor sources. 
C) How much the person enjoys working. 
D) The amount of fringe benefits offered to the person. 
E) All of the above affect a person's decision to work. 
A) The price of consumption goods relative to the wage. 
B) The person's income from non-labor sources. 
C) How much the person enjoys working. 
D) The amount of fringe benefits offered to the person. 
E) All of the above affect a person's decision to work.

Question 9

Suppose labor demand can be described as ED = 120,000 − 1.5w, where w is yearly salary. How many more workers are demanded at a going wage of $60,000?

Accepted Answer

A) $20,000 
B) $30,000 
C) $40,000 
D) $50,000 
E) $60,000 
A) $20,000 
B) $30,000 
C) $40,000 
D) $50,000 
E) $60,000

Question 10

Which is not a decision made by potential workers in the United States?

Accepted Answer

A) Deciding whether or not to participate in the labor force. 
B) Determining how to divide one's time between work and leisure. 
C) Choosing how much to produce to maximize firm profit. 
D) Choosing how much education to receive. 
E) Deciding which occupation to pursue. 
A) Deciding whether or not to participate in the labor force. 
B) Determining how to divide one's time between work and leisure. 
C) Choosing how much to produce to maximize firm profit. 
D) Choosing how much education to receive. 
E) Deciding which occupation to pursue.

Question 11

Which of the following is a normative (rather than a positive) statement?

Accepted Answer

A) The (nominal) minimum wage is $7.25 per hour. 
B) Public education should be funded primarily at the state level. 
C) The federal debt exceeds $8 trillion. 
D) At its peak, unemployment exceeded 10% during the 2007 recession. 
E) The average wage of high-school dropouts has fallen by 20% since 1970. 
A) The (nominal) minimum wage is $7.25 per hour. 
B) Public education should be funded primarily at the state level. 
C) The federal debt exceeds $8 trillion. 
D) At its peak, unemployment exceeded 10% during the 2007 recession. 
E) The average wage of high-school dropouts has fallen by 20% since 1970.

Question 12

The labor supply curve shows how many workers are willing to work

Accepted Answer

A) in a particular industry. 
B) at any given time. 
C) at the minimum wage. 
D) at any given wage. 
E) in order to maximize the firm's profit. 
A) in a particular industry. 
B) at any given time. 
C) at the minimum wage. 
D) at any given wage. 
E) in order to maximize the firm's profit.

Question 13

An upward-sloping labor supply curve implies that

Accepted Answer

A) a firm can always hire more workers, even without increasing the wage. 
B) more workers are willing to work when wages are low. 
C) more workers are willing to work as the market wage increases. 
D) labor supplied is fixed. 
E) there is a continuously increasing demand for labor. 
A) a firm can always hire more workers, even without increasing the wage. 
B) more workers are willing to work when wages are low. 
C) more workers are willing to work as the market wage increases. 
D) labor supplied is fixed. 
E) there is a continuously increasing demand for labor.

Question 14

Labor economics concerns

Accepted Answer

A) how labor markets work. 
B) the study of education decisions. 
C) the study of how households decide where to live. 
D) the study of income inequality. 
E) All of these are labor economics concerns. 
A) how labor markets work. 
B) the study of education decisions. 
C) the study of how households decide where to live. 
D) the study of income inequality. 
E) All of these are labor economics concerns.

Question 15

Which of the following affects the wage a firm is willing to pay its workers?

Accepted Answer

A) The productivity of workers. 
B) Consumer demand for the goods and/or services that the firm creates. 
C) The amount of fringe benefits the firm is required by law to pay. 
D) The level of payroll taxes the firm must pay. 
E) All of the above affect the wage a firm is willing to pay its workers. 
A) The productivity of workers. 
B) Consumer demand for the goods and/or services that the firm creates. 
C) The amount of fringe benefits the firm is required by law to pay. 
D) The level of payroll taxes the firm must pay. 
E) All of the above affect the wage a firm is willing to pay its workers.

Question 16

Suppose labor supply can be described as ES = 0.1w - 1,000 where w is yearly salary. What yearly salary must be paid to encourage 6,000 workers to accept jobs?

Accepted Answer

A) $30,000 
B) $40,000 
C) $50,000 
D) $60,000 
E) $70,000 
A) $30,000 
B) $40,000 
C) $50,000 
D) $60,000 
E) $70,000

Question 17

Labor market equilibrium is best characterized by:

Accepted Answer

A) A wage at which all people have a job. 
B) A wage at which all workers are above the poverty level. 
C) A wage at which the number of people willing to work equals the number of workers firms are willing to hire. 
D) A minimum wage at which everyone is willing to work. 
E) All workers receiving their ideal wage. 
A) A wage at which all people have a job. 
B) A wage at which all workers are above the poverty level. 
C) A wage at which the number of people willing to work equals the number of workers firms are willing to hire. 
D) A minimum wage at which everyone is willing to work. 
E) All workers receiving their ideal wage.

Question 18

The typical labor supply curve

Accepted Answer

A) is u-shaped. 
B) equals the marginal product of labor. 
C) slopes up. 
D) slopes down. 
E) depends on the size of the firm. 
A) is u-shaped. 
B) equals the marginal product of labor. 
C) slopes up. 
D) slopes down. 
E) depends on the size of the firm.

Question 19

An outward shift in the labor demand curve implies that.

Accepted Answer

A) employers are now looking to hire more workers at any given wage. 
B) employers are now looking to hire more workers if the wage increases. 
C) employers are now looking to hire fewer workers regardless of the wage. 
D) demand for the firm's output likely fell. 
E) a greater number of workers are now more willing to work at any given wage. 
A) employers are now looking to hire more workers at any given wage. 
B) employers are now looking to hire more workers if the wage increases. 
C) employers are now looking to hire fewer workers regardless of the wage. 
D) demand for the firm's output likely fell. 
E) a greater number of workers are now more willing to work at any given wage.

Question 20

The labor demand curve shows how many workers the firm is willing to hire

Accepted Answer

A) at any particular time. 
B) at a particular amount of labor supplied. 
C) at any given wage. 
D) into high-skill jobs. 
E) when demand for the firm's output is low. 
A) at any particular time. 
B) at a particular amount of labor supplied. 
C) at any given wage. 
D) into high-skill jobs. 
E) when demand for the firm's output is low.

What is likely to happen to the supply of firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

The market for economists in Greenland has recently experienced an increase in the number of economists employed and an increase in the wage of economists. What could explain such a change?

In an econometric model, the dependent variable is

When forming theories, economists must be careful to

What type of questions cannot be answered with theory or facts alone?

Labor economists sometimes refer to labor demand as "derived" demand. In this context, where does "derived" come from?

A firm's labor demand curve is typically

Which of the following affects a person's decision to work?

Suppose labor demand can be described as E_D = 120,000 − 1.5w, where w is yearly salary. How many more workers are demanded at a going wage of $60,000?

Which is not a decision made by potential workers in the United States?

Which of the following is a normative (rather than a positive) statement?

The labor supply curve shows how many workers are willing to work

An upward-sloping labor supply curve implies that

Labor economics concerns

Which of the following affects the wage a firm is willing to pay its workers?

Suppose labor supply can be described as E_S = 0.1w - 1,000 where w is yearly salary. What yearly salary must be paid to encourage 6,000 workers to accept jobs?

Labor market equilibrium is best characterized by:

The typical labor supply curve

An outward shift in the labor demand curve implies that.

The labor demand curve shows how many workers the firm is willing to hire

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters

Exam 1: Introduction to Labor Economics

What is likely to happen to the supply of firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

The market for economists in Greenland has recently experienced an increase in the number of economists employed and an increase in the wage of economists. What could explain such a change?

In an econometric model, the dependent variable is

When forming theories, economists must be careful to

What type of questions cannot be answered with theory or facts alone?

Labor economists sometimes refer to labor demand as "derived" demand. In this context, where does "derived" come from?

A firm's labor demand curve is typically

Which of the following affects a person's decision to work?

Suppose labor demand can be described as ED = 120,000 − 1.5w, where w is yearly salary. How many more workers are demanded at a going wage of $60,000?

Which is not a decision made by potential workers in the United States?

Which of the following is a normative (rather than a positive) statement?

The labor supply curve shows how many workers are willing to work

An upward-sloping labor supply curve implies that

Labor economics concerns

Which of the following affects the wage a firm is willing to pay its workers?

Suppose labor supply can be described as ES = 0.1w - 1,000 where w is yearly salary. What yearly salary must be paid to encourage 6,000 workers to accept jobs?

Labor market equilibrium is best characterized by:

The typical labor supply curve

An outward shift in the labor demand curve implies that.

The labor demand curve shows how many workers the firm is willing to hire

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters

Suppose labor demand can be described as E_D = 120,000 − 1.5w, where w is yearly salary. How many more workers are demanded at a going wage of $60,000?

Suppose labor supply can be described as E_S = 0.1w - 1,000 where w is yearly salary. What yearly salary must be paid to encourage 6,000 workers to accept jobs?