Question 1

Based on the table below,how many workers will the firm employ in order to maximize profits?

Accepted Answer

A)  12 
B)  13 
C)  14 
D)  15 
A)  12 
B)  13 
C)  14 
D)  15 A

Question 2

If,beginning from a competitive labor market,some workers form a union and negotiate a higher rate for themselves,which of the following is likely to happen?

Accepted Answer

A)  Competition will force the wage rate in the non-union sector to increase to the level of the union wage. 
B)  The marginal product of labor curve will increase in the unionized sector. 
C)  Employment will move from the union to the non-union sector over time. 
D)  Employment will increase in the union sector because workers will be attracted by the higher union wage. 
A)  Competition will force the wage rate in the non-union sector to increase to the level of the union wage. 
B)  The marginal product of labor curve will increase in the unionized sector. 
C)  Employment will move from the union to the non-union sector over time. 
D)  Employment will increase in the union sector because workers will be attracted by the higher union wage. C

Question 3

Which of the following will not result in a rightward shift of the market supply curve for labor?

Accepted Answer

A)  an increase in immigration 
B)  an increase in labor productivity 
C)  an increase in the working-age population 
D)  a decrease in nonwage income 
A)  an increase in immigration 
B)  an increase in labor productivity 
C)  an increase in the working-age population 
D)  a decrease in nonwage income B

Question 4

When labor is a firm's only variable input in its production process,a profit-maximizing firm will continue to employ additional workers as long as:

Accepted Answer

A)  the marginal product of labor > 0. 
B)  the marginal revenue product of labor  the marginal resource cost. 
D)  none of the above. 
A)  the marginal product of labor > 0. 
B)  the marginal revenue product of labor  the marginal resource cost. 
D)  none of the above.

Question 5

The marginal resource cost of input is the amount that an extra unit of that input adds to the firm's total costs.

Accepted Answer

A) True 
 B)False

Question 6

The labor supply curve will shift to the right under which of the following conditions?

Accepted Answer

A)  other things being equal, workers are willing to supply more hours of labor each week 
B)  new workers enter the labor market 
C)  a new law relaxes immigration quotas 
D)  all of the above 
A)  other things being equal, workers are willing to supply more hours of labor each week 
B)  new workers enter the labor market 
C)  a new law relaxes immigration quotas 
D)  all of the above

Question 7

A decrease in the productivity of labor will shift the demand curve for labor to the left,other things being equal.

Accepted Answer

A) True 
 B)False

Question 8

Not all similarly skilled workers are included in unions.As a result,wages for unionized workers tend to be ____ than for nonunion workers.Additionally,as a significant number of skilled workers seek work in the nonunion sector,the supply curve for nonunion labor shifts to the ____,thereby ____ wages for nonunion workers.

Accepted Answer

A)  higher; right; reducing 
B)  higher; left; reducing 
C)  lower; right; increasing 
D)  lower; left; increasing 
A)  higher; right; reducing 
B)  higher; left; reducing 
C)  lower; right; increasing 
D)  lower; left; increasing

Question 9

A decrease in the interest rate will:

Accepted Answer

A)  increase the amount of money supplied by lenders. 
B)  decrease the amount of money supplied by lenders. 
C)  have no effect on the amount of money supplied by lenders. 
D)  have an ambiguous effect on the amount of money supplied by lenders. 
A)  increase the amount of money supplied by lenders. 
B)  decrease the amount of money supplied by lenders. 
C)  have no effect on the amount of money supplied by lenders. 
D)  have an ambiguous effect on the amount of money supplied by lenders.

Question 10

The substitution effect of a wage increase:

Accepted Answer

A)  results in an increase in the quantity of labor supplied. 
B)  results in a decrease in the quantity of labor supplied. 
C)  has no impact on the quantity of labor supplied. 
D)  results in an increase in the quantity of leisure enjoyed. 
A)  results in an increase in the quantity of labor supplied. 
B)  results in a decrease in the quantity of labor supplied. 
C)  has no impact on the quantity of labor supplied. 
D)  results in an increase in the quantity of leisure enjoyed.

Question 11

Which of the following most clearly illustrates the concept of "derived demand"?

Accepted Answer

A)  An increase in the price of steak causes the demand for poultry to increase. 
B)  An increase in the demand for new houses leads to an increase in the demand for construction workers. 
C)  An increase in consumer income leads to an increase in the demand for services provided by the government. 
D)  An increase in the demand for new cars causes the demand for used automobiles to rise. 
A)  An increase in the price of steak causes the demand for poultry to increase. 
B)  An increase in the demand for new houses leads to an increase in the demand for construction workers. 
C)  An increase in consumer income leads to an increase in the demand for services provided by the government. 
D)  An increase in the demand for new cars causes the demand for used automobiles to rise.

Question 12

Which of the following is the best example of an investment in human capital?

Accepted Answer

A)  the purchase of an industrial development bond 
B)  a graduate student who completed 24 semester units in economics last year 
C)  the purchase of a lawn mower by a homeowner 
D)  an unemployed stockbroker who drives a cab in order to pay his bills 
A)  the purchase of an industrial development bond 
B)  a graduate student who completed 24 semester units in economics last year 
C)  the purchase of a lawn mower by a homeowner 
D)  an unemployed stockbroker who drives a cab in order to pay his bills

Question 13

The demand curve for capital is downward sloping because of the increasing marginal cost of capital.

Accepted Answer

A) True 
 B)False

Question 14

The relationship between the wage rate and the quantity of labor that employers wish to hire in total is called:

Accepted Answer

A)  the market supply curve for labor. 
B)  the market demand curve for labor. 
C)  an individual demand curve for labor. 
D)  an individual supply curve for labor. 
A)  the market supply curve for labor. 
B)  the market demand curve for labor. 
C)  an individual demand curve for labor. 
D)  an individual supply curve for labor.

Question 15

Decreases in the demand curve for labor may arise from ____ in labor productivity or from ____ in the price of the good.

Accepted Answer

A)  increases; increases. 
B)  increases; decreases. 
C)  decreases; increases. 
D)  decreases; decreases 
A)  increases; increases. 
B)  increases; decreases. 
C)  decreases; increases. 
D)  decreases; decreases

Question 16

Which of the following is false?

Accepted Answer

A)  An increase in labor productivity will shift the demand curve for labor to the right. 
B)  An increase in wage will lead to an increase in the supply of labor. 
C)  A decrease in the nonwage income of workers would shift the labor supply curve to the right. 
D)  If job amenities deteriorate, it would lead to a reduction, or leftward shift, in the labor supply curve. 
A)  An increase in labor productivity will shift the demand curve for labor to the right. 
B)  An increase in wage will lead to an increase in the supply of labor. 
C)  A decrease in the nonwage income of workers would shift the labor supply curve to the right. 
D)  If job amenities deteriorate, it would lead to a reduction, or leftward shift, in the labor supply curve.

Question 17

Labor unions create barriers to entry in certain work settings.

Accepted Answer

A) True 
 B)False

Question 18

The marginal product of labor measures:

Accepted Answer

A)  the total amount of output produced by all workers combined. 
B)  the quantity of an intermediate product that is combined with labor to produce output. 
C)  the amount of output an additional worker contributes to a firm's total output. 
D)  the average productivity of workers hired by a firm. 
A)  the total amount of output produced by all workers combined. 
B)  the quantity of an intermediate product that is combined with labor to produce output. 
C)  the amount of output an additional worker contributes to a firm's total output. 
D)  the average productivity of workers hired by a firm.

Question 19

Firms with union contracts do a large portion of the painting jobs in the county.If the painters' union wins a 12 percent wage increase,what will most likely happen in the non-unionized part of the painters' labor market?

Accepted Answer

A)  Nonunion painters will also get 12 percent wage increases. 
B)  There will be no change in the nonunionized part of the painters' labor market because these sectors are not connected. 
C)  Wage rates in the nonunion sector are likely to fall. 
D)  Many nonunion painters will likely find work for a firm with a union contract. 
A)  Nonunion painters will also get 12 percent wage increases. 
B)  There will be no change in the nonunionized part of the painters' labor market because these sectors are not connected. 
C)  Wage rates in the nonunion sector are likely to fall. 
D)  Many nonunion painters will likely find work for a firm with a union contract.

Question 20

Which of the following is likely to reduce the impact of a monopsony?

Accepted Answer

A)  Absence of competing firms 
B)  Higher search costs 
C)  An increased ability of workers to relocate elsewhere 
D)  Higher movement and information costs 
A)  Absence of competing firms 
B)  Higher search costs 
C)  An increased ability of workers to relocate elsewhere 
D)  Higher movement and information costs

Exam 16: The Markets for Labor, Capital, and Land

Based on the table below,how many workers will the firm employ in order to maximize profits?

If,beginning from a competitive labor market,some workers form a union and negotiate a higher rate for themselves,which of the following is likely to happen?

Which of the following will not result in a rightward shift of the market supply curve for labor?

When labor is a firm's only variable input in its production process,a profit-maximizing firm will continue to employ additional workers as long as:

The marginal resource cost of input is the amount that an extra unit of that input adds to the firm's total costs.

The labor supply curve will shift to the right under which of the following conditions?

A decrease in the productivity of labor will shift the demand curve for labor to the left,other things being equal.

A decrease in the interest rate will:

The substitution effect of a wage increase:

Which of the following most clearly illustrates the concept of "derived demand"?

Which of the following is the best example of an investment in human capital?

The demand curve for capital is downward sloping because of the increasing marginal cost of capital.

The relationship between the wage rate and the quantity of labor that employers wish to hire in total is called:

Decreases in the demand curve for labor may arise from ____ in labor productivity or from ____ in the price of the good.

Which of the following is false?

Labor unions create barriers to entry in certain work settings.

The marginal product of labor measures:

Firms with union contracts do a large portion of the painting jobs in the county.If the painters' union wins a 12 percent wage increase,what will most likely happen in the non-unionized part of the painters' labor market?

Which of the following is likely to reduce the impact of a monopsony?

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

Filters

Decreases in the demand curve for labor may arise from in labor productivity or from in the price of the good.