Question 1

The figure below shows the supply curve for labor. Figure 15.1  
- Refer to Figure 15.1.When wage rate increases from W3 to W5:

Accepted Answer

A) quantity of labor supplied increases from Q1to Q4. 
B) quantity of labor supplied decreases from Q5 to Q2. 
C) quantity of labor supplied increases from Q2 to Q4. 
D) quantity of labor supplied decreases from Q4 to Q2. 
E) quantity of labor supplied increases from Q1 to Q54. 
A) quantity of labor supplied increases from Q1to Q4. 
B) quantity of labor supplied decreases from Q5 to Q2. 
C) quantity of labor supplied increases from Q2 to Q4. 
D) quantity of labor supplied decreases from Q4 to Q2. 
E) quantity of labor supplied increases from Q1 to Q54.

Question 2

The figure given below shows the demand curve in the U.S.and the cost curves in U.S.and India. Figure: 15.4   In the figure:
MC: Marginal cost curve
ATC: Average total cost curve
D: Demand curve in the U.S.
MR: Marginal revenue curve in the U.S.
-According to Figure 15.4,one of the possible outcomes of such offshoring is that:

Accepted Answer

A) the price of the good in question rises in the U.S.market. 
B) the demand for Indian labor declines. 
C) the demand for U.S.workers increase. 
D) the price of the good in question rises in the Indian market. 
E) the Indian workers replace the U.S.workers. 
A) the price of the good in question rises in the U.S.market. 
B) the demand for Indian labor declines. 
C) the demand for U.S.workers increase. 
D) the price of the good in question rises in the Indian market. 
E) the Indian workers replace the U.S.workers.

Question 3

A large number of U.S.firms send jobs to low-wage nations as it enables them to:

Accepted Answer

A) raise the price of their products. 
B) reduce their cost of production. 
C) get better quality products. 
D) obtain diversified products. 
E) politically dominate the economies where they are offshoring. 
A) raise the price of their products. 
B) reduce their cost of production. 
C) get better quality products. 
D) obtain diversified products. 
E) politically dominate the economies where they are offshoring.

Question 4

Which of the following refers to human capital?

Accepted Answer

A) Money spent by business to acquire labor 
B) The acquired skill and productivity of workers 
C) The plant and equipment used with labor 
D) Money spent on education. 
E) Money that workers save 
A) Money spent by business to acquire labor 
B) The acquired skill and productivity of workers 
C) The plant and equipment used with labor 
D) Money spent on education. 
E) Money that workers save

Question 5

Investment in human capital implies:

Accepted Answer

A) investment on machines,technological development,and equipments. 
B) expenses on education. 
C) expenses on paying interest for hiring real capital. 
D) expenses related to the purchase of land. 
E) profit of the entrepreneurs. 
A) investment on machines,technological development,and equipments. 
B) expenses on education. 
C) expenses on paying interest for hiring real capital. 
D) expenses related to the purchase of land. 
E) profit of the entrepreneurs.

Question 6

The labor-market-supply curve illustrates that,as the wage rate increases,the number of number of hours that each person is willing and able to work rises.

Accepted Answer

A) True 
 B)False

Question 7

One of the major impacts of restricting immigration is that the:

Accepted Answer

A) prices of the products produced by unskilled laborers will decline. 
B) prices of the products produced by unskilled labor will increase. 
C) supply of labor in agriculture will increase. 
D) supply of labor in the industrial sector will rise. 
E) government's expenditure on education and health will rise. 
A) prices of the products produced by unskilled laborers will decline. 
B) prices of the products produced by unskilled labor will increase. 
C) supply of labor in agriculture will increase. 
D) supply of labor in the industrial sector will rise. 
E) government's expenditure on education and health will rise.

Question 8

The figures given below show the demand (D)and supply (S) curves of labor in two different markets. Figure 15.3  
- Refer to Figure 15.3.If the wage rates in market A and market B were set at $20,then:

Accepted Answer

A) both the markets would be in equilibrium. 
B) there would be a shortage of workers in market A and a surplus of workers in market B. 
C) there would be a shortage of workers in market B and a surplus of workers in market A. 
D) there would be a surplus of workers in both markets. 
E) there would be a shortage of workers in both markets. 
A) both the markets would be in equilibrium. 
B) there would be a shortage of workers in market A and a surplus of workers in market B. 
C) there would be a shortage of workers in market B and a surplus of workers in market A. 
D) there would be a surplus of workers in both markets. 
E) there would be a shortage of workers in both markets.

Question 9

Why is the market supply curve of labor positively sloped though individual supply curves are backward-bending beyond a certain wage rate?

Accepted Answer

A) People tend to work less when wage rate increases. 
B) Every individual laborer has equal trade offs between labor and leisure. 
C) People tend to substitute labor for leisure. 
D) People work more for the fear of losing their jobs and becoming unemployed. 
E) All the individual supply curves do not bend backward at one particular wage rate. 
A) People tend to work less when wage rate increases. 
B) Every individual laborer has equal trade offs between labor and leisure. 
C) People tend to substitute labor for leisure. 
D) People work more for the fear of losing their jobs and becoming unemployed. 
E) All the individual supply curves do not bend backward at one particular wage rate.

Question 10

With illegal immigration the unskilled labor supply curve:

Accepted Answer

A) shifts to the left. 
B) becomes perfectly inelastic. 
C) becomes perfectly elastic. 
D) shifts to the right. 
E) becomes non-existent. 
A) shifts to the left. 
B) becomes perfectly inelastic. 
C) becomes perfectly elastic. 
D) shifts to the right. 
E) becomes non-existent.

Question 11

The principal argument against comparable worth is that:

Accepted Answer

A) men and women differ largely in terms of their productivities. 
B) market does not function correctly and leads to inefficient allocation of resources. 
C) market allocates scarce resources to their most highly valued uses in the most efficient manner. 
D) demand and supply do not allocate workers to where they are needed the most. 
E) legislation by the government are often appropriate as it processes all the available information correctly. 
A) men and women differ largely in terms of their productivities. 
B) market does not function correctly and leads to inefficient allocation of resources. 
C) market allocates scarce resources to their most highly valued uses in the most efficient manner. 
D) demand and supply do not allocate workers to where they are needed the most. 
E) legislation by the government are often appropriate as it processes all the available information correctly.

Question 12

The figure given below shows the demand curves (DS1U1B11S1U1B0 and DS1U1B12S1U1B0) and supply curves (SS1U1B11S1U1B0 and SS1U1B12S1U1B0) of labor in the labor market. Figure: 15.2  
- According to Figure 15.2,assume that the market is in an initial equilibrium in which the labor supply is S1 and the labor demand is D1.Then labor supply shifts from S1 to S2 but the wage remains at its previous equilibrium level.Which of the following is true?

Accepted Answer

A) The economy is still in equilibrium. 
B) There is a shortage of 20 workers. 
C) There is a shortage of 30 workers. 
D) There is a surplus of 30 workers. 
E) There is a surplus of 20 workers. 
A) The economy is still in equilibrium. 
B) There is a shortage of 20 workers. 
C) There is a shortage of 30 workers. 
D) There is a surplus of 30 workers. 
E) There is a surplus of 20 workers.

Question 13

The intention of a minimum wage is to:

Accepted Answer

A) keep the wage rate at par with the equilibrium wage. 
B) keep the wage rate below the equilibrium wage. 
C) raise the wage rate above the equilibrium wage. 
D) keep the wage rate at par with the wage of the skilled workers. 
E) make the wages of the skilled and unskilled workers equal. 
A) keep the wage rate at par with the equilibrium wage. 
B) keep the wage rate below the equilibrium wage. 
C) raise the wage rate above the equilibrium wage. 
D) keep the wage rate at par with the wage of the skilled workers. 
E) make the wages of the skilled and unskilled workers equal.

Question 14

Which of the following is a reason that some economists do not agree with the concept of a labor-leisure tradeoff?

Accepted Answer

A) Wages are paid in dollars and leisure is measured in time,hence there is no way to compare the two. 
B) On a day-to-day basis,most jobs do not have the flexibility to allow people to weigh the benefits and costs to determine how much they should work that day. 
C) In the long-run,the supply of labor hours is perfectly inelastic. 
D) An increase in the wage rate always leads to an increase in the supply of labor hours. 
E) Some people do not work at all,so there is no labor-leisure tradeoff for those individuals. 
A) Wages are paid in dollars and leisure is measured in time,hence there is no way to compare the two. 
B) On a day-to-day basis,most jobs do not have the flexibility to allow people to weigh the benefits and costs to determine how much they should work that day. 
C) In the long-run,the supply of labor hours is perfectly inelastic. 
D) An increase in the wage rate always leads to an increase in the supply of labor hours. 
E) Some people do not work at all,so there is no labor-leisure tradeoff for those individuals.

Question 15

The greatest number of recent immigrants to the U.S.come from Mexico because of:

Accepted Answer

A) political insecurity in Mexico. 
B) religious insecurity in Mexico. 
C) proximity and wage differentials. 
D) racial discrimination in Mexico. 
E) greater social security in the United States. 
A) political insecurity in Mexico. 
B) religious insecurity in Mexico. 
C) proximity and wage differentials. 
D) racial discrimination in Mexico. 
E) greater social security in the United States.

Question 16

According to the U.S.population surveys conducted by the census,since 1980 the total foreign-born population as a percentage of the total U.S.population:

Accepted Answer

A) has not changed. 
B) has declined. 
C) has risen. 
D) has been stable. 
E) has fallen to zero. 
A) has not changed. 
B) has declined. 
C) has risen. 
D) has been stable. 
E) has fallen to zero.

Question 17

When people prefer to obtain medical,or legal services from white males,although they charge high prices for their services,it is termed as:

Accepted Answer

A) producer prejudice. 
B) employer prejudice. 
C) worker prejudice. 
D) occupational segregation. 
E) consumer prejudice. 
A) producer prejudice. 
B) employer prejudice. 
C) worker prejudice. 
D) occupational segregation. 
E) consumer prejudice.

Question 18

Which of the following is true of illegal immigrants?

Accepted Answer

A) They help raise the unemployment rate of the United States. 
B) They take away jobs from Americans. 
C) They do not affect the equilibrium wage of the U.S.unskilled labor market. 
D) They help some firms lower operating costs,earn more profit,and produce more. 
E) They reduce the supply of unskilled labor in the United States. 
A) They help raise the unemployment rate of the United States. 
B) They take away jobs from Americans. 
C) They do not affect the equilibrium wage of the U.S.unskilled labor market. 
D) They help some firms lower operating costs,earn more profit,and produce more. 
E) They reduce the supply of unskilled labor in the United States.

Question 19

Which of the following statements is true?

Accepted Answer

A) Income earned by a worker with a college degree grows more rapidly than a worker without a college degree during their early working years. 
B) A worker with a college degree always earns less than a worker without a college degree. 
C) A worker with a college degree initially earns more than a worker without a college degree but the latter surpasses the former in due course of time. 
D) A worker without a college degree initially earns more than a worker with a college degree but the latter surpasses the former in due course of time. 
E) Both the workers earn equal incomes after a certain period of time. 
A) Income earned by a worker with a college degree grows more rapidly than a worker without a college degree during their early working years. 
B) A worker with a college degree always earns less than a worker without a college degree. 
C) A worker with a college degree initially earns more than a worker without a college degree but the latter surpasses the former in due course of time. 
D) A worker without a college degree initially earns more than a worker with a college degree but the latter surpasses the former in due course of time. 
E) Both the workers earn equal incomes after a certain period of time.

Question 20

The following figures show the demand and supply of labor in two different types of labor market. Figure 15.5   In the figures,
D: Demand curve for labor
S: Supply curve of labor
MRP: Marginal revenue product
MFC: Marginal factor cost
-Refer to Figure 15.5.If a minimum wage of $10 is set by the government,then in market A:

Accepted Answer

A) a shortage of 20 labor hours is created. 
B) the quantity demanded for labor rises to 20 labor hours. 
C) a shortage of 15 labor hours is created. 
D) a surplus of 20 labor hours is created. 
E) a surplus of 10 labor hours is created. 
A) a shortage of 20 labor hours is created. 
B) the quantity demanded for labor rises to 20 labor hours. 
C) a shortage of 15 labor hours is created. 
D) a surplus of 20 labor hours is created. 
E) a surplus of 10 labor hours is created.

The figure below shows the supply curve for labor. Figure 15.1 - Refer to Figure 15.1.When wage rate increases from W₃ to W₅:

A large number of U.S.firms send jobs to low-wage nations as it enables them to:

Which of the following refers to human capital?

Investment in human capital implies:

The labor-market-supply curve illustrates that,as the wage rate increases,the number of number of hours that each person is willing and able to work rises.

One of the major impacts of restricting immigration is that the:

The figures given below show the demand (D)and supply (S) curves of labor in two different markets. Figure 15.3 - Refer to Figure 15.3.If the wage rates in market A and market B were set at $20,then:

Why is the market supply curve of labor positively sloped though individual supply curves are backward-bending beyond a certain wage rate?

With illegal immigration the unskilled labor supply curve:

The principal argument against comparable worth is that:

The intention of a minimum wage is to:

Which of the following is a reason that some economists do not agree with the concept of a labor-leisure tradeoff?

The greatest number of recent immigrants to the U.S.come from Mexico because of:

According to the U.S.population surveys conducted by the census,since 1980 the total foreign-born population as a percentage of the total U.S.population:

When people prefer to obtain medical,or legal services from white males,although they charge high prices for their services,it is termed as:

Which of the following is true of illegal immigrants?

Which of the following statements is true?

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

Exam 15: The Labor Market

The figure below shows the supply curve for labor. Figure 15.1 - Refer to Figure 15.1.When wage rate increases from W3 to W5:

A large number of U.S.firms send jobs to low-wage nations as it enables them to:

Which of the following refers to human capital?

Investment in human capital implies:

The labor-market-supply curve illustrates that,as the wage rate increases,the number of number of hours that each person is willing and able to work rises.

One of the major impacts of restricting immigration is that the:

The figures given below show the demand (D)and supply (S) curves of labor in two different markets. Figure 15.3 - Refer to Figure 15.3.If the wage rates in market A and market B were set at $20,then:

Why is the market supply curve of labor positively sloped though individual supply curves are backward-bending beyond a certain wage rate?

With illegal immigration the unskilled labor supply curve:

The principal argument against comparable worth is that:

The intention of a minimum wage is to:

Which of the following is a reason that some economists do not agree with the concept of a labor-leisure tradeoff?

The greatest number of recent immigrants to the U.S.come from Mexico because of:

According to the U.S.population surveys conducted by the census,since 1980 the total foreign-born population as a percentage of the total U.S.population:

When people prefer to obtain medical,or legal services from white males,although they charge high prices for their services,it is termed as:

Which of the following is true of illegal immigrants?

Which of the following statements is true?

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

The figure below shows the supply curve for labor. Figure 15.1 - Refer to Figure 15.1.When wage rate increases from W₃ to W₅: