Question 1

A decrease in the interest rate will:

Accepted Answer

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

Question 2

Which of the following best illustrates the concept of "derived demand"?

Accepted Answer

A)  An increase in the wages of autoworkers leads to an increase in the demand for robots in automobile factories. 
B)  An auto firm decides to supply more minivans when there is a decrease in the demand for station wagons. 
C)  An increase in the price of gasoline leads to an increase in the demand for small cars. 
D)  An automobile firm faces an increase in the demand for cars it supplies to the market, which leads to an increase in the demand for autoworkers. 
A)  An increase in the wages of autoworkers leads to an increase in the demand for robots in automobile factories. 
B)  An auto firm decides to supply more minivans when there is a decrease in the demand for station wagons. 
C)  An increase in the price of gasoline leads to an increase in the demand for small cars. 
D)  An automobile firm faces an increase in the demand for cars it supplies to the market, which leads to an increase in the demand for autoworkers.

Question 3

The demand for labor is a derived demand.Employers hire workers until the:

Accepted Answer

A)  wage rate equals the average product of labor. 
B)  wage rate equals the marginal revenue product of labor. 
C)  average product of labor is zero. 
D)  marginal product of labor is zero. 
A)  wage rate equals the average product of labor. 
B)  wage rate equals the marginal revenue product of labor. 
C)  average product of labor is zero. 
D)  marginal product of labor is zero.

Question 4

Lower wages will

Accepted Answer

A)  decrease the demand for labor. 
B)  decrease the quantity of labor demanded. 
C)  increase the demand for labor. 
D)  increase the quantity of labor demanded. 
A)  decrease the demand for labor. 
B)  decrease the quantity of labor demanded. 
C)  increase the demand for labor. 
D)  increase the quantity of labor demanded.

Question 5

Which of the following is true regarding labor legislation?

Accepted Answer

A)  The Taft-Hartley Act increased union power while the Wagner Act limited union power. 
B)  The Wagner Act increased union power while the Taft-Hartley Act limited union power. 
C)  Both the Wagner Act and the Taft-Hartley Act increased the power of unions. 
D)  Both the Wagner Act and the Taft-Hartley Act limited the power of unions. 
A)  The Taft-Hartley Act increased union power while the Wagner Act limited union power. 
B)  The Wagner Act increased union power while the Taft-Hartley Act limited union power. 
C)  Both the Wagner Act and the Taft-Hartley Act increased the power of unions. 
D)  Both the Wagner Act and the Taft-Hartley Act limited the power of unions.

Question 6

The additional revenue a firm obtains from hiring one more unit of input is called the marginal revenue product.

Accepted Answer

A) True 
 B)False

Question 7

The supply curve for land is perfectly elastic.

Accepted Answer

A) True 
 B)False

Question 8

The effect of unions tends to ____ output in the union sector and ____ output in the non-union sector.

Accepted Answer

A)  increase; increase. 
B)  increase; decrease. 
C)  decrease; increase. 
D)  decrease; decrease. 
A)  increase; increase. 
B)  increase; decrease. 
C)  decrease; increase. 
D)  decrease; decrease.

Question 9

Featherbedding refers to the practice of:

Accepted Answer

A)  disallowing members from joining labor unions. 
B)  hiring lesser number of laborers than what is required. 
C)  terminating employment without notice. 
D)  hiring more laborers than what is necessary. 
A)  disallowing members from joining labor unions. 
B)  hiring lesser number of laborers than what is required. 
C)  terminating employment without notice. 
D)  hiring more laborers than what is necessary.

Question 10

Collective bargaining refers to negotiations between:

Accepted Answer

A)  representatives of employers and unions. 
B)  unions and government regulators. 
C)  consumers and producers. 
D)  employers and consumers. 
A)  representatives of employers and unions. 
B)  unions and government regulators. 
C)  consumers and producers. 
D)  employers and consumers.

Question 11

A change in technology that increases the marginal physical product of an input will:

Accepted Answer

A)  shift the input demand curve to the left. 
B)  shift the input demand curve to the right. 
C)  result in a movement down along the input demand curve. 
D)  result in a movement up along the input demand curve. 
A)  shift the input demand curve to the left. 
B)  shift the input demand curve to the right. 
C)  result in a movement down along the input demand curve. 
D)  result in a movement up along the input demand curve.

Question 12

For an individual's supply curve of labor to be backward bending:

Accepted Answer

A)  the substitution effect must be greater than the income effect. 
B)  the substitution effect must be equal to the income effect. 
C)  the substitution effect must be less than the income effect. 
D)  is an impossibility. 
A)  the substitution effect must be greater than the income effect. 
B)  the substitution effect must be equal to the income effect. 
C)  the substitution effect must be less than the income effect. 
D)  is an impossibility.

Question 13

A productivity slowdown could result from

Accepted Answer

A)  an increase in capital formation. 
B)  an increase in the number of unskilled and inexperienced workers. 
C)  a decrease in the relative size of the service sector. 
D)  any of the above. 
A)  an increase in capital formation. 
B)  an increase in the number of unskilled and inexperienced workers. 
C)  a decrease in the relative size of the service sector. 
D)  any of the above.

Question 14

If labor demand rises faster than labor supply,it is expected that real wages will ____.

Accepted Answer

A)  stay the same 
B)  decrease 
C)  increase 
D)  Not enough information is available to determine the impact on real wage rates. 
A)  stay the same 
B)  decrease 
C)  increase 
D)  Not enough information is available to determine the impact on real wage rates.

Question 15

If unions are successful at increasing union wages,it will

Accepted Answer

A)  increase wages and employment in the union sector. 
B)  increase wages and decrease employment in the union sector. 
C)  increase wages and employment in the non-union sector. 
D)  increase wages and decrease employment in the non-union sector. 
A)  increase wages and employment in the union sector. 
B)  increase wages and decrease employment in the union sector. 
C)  increase wages and employment in the non-union sector. 
D)  increase wages and decrease employment in the non-union sector.

Question 16

An individual firm in a perfectly competitive labor market faces:

Accepted Answer

A)  a downward sloping labor demand curve and an upward sloping labor supply curve. 
B)  a horizontal labor supply curve and a vertical labor demand curve. 
C)  a horizontal labor supply curve and a downward sloping labor demand curve. 
D)  an upward sloping labor supply curve and a horizontal labor demand curve. 
A)  a downward sloping labor demand curve and an upward sloping labor supply curve. 
B)  a horizontal labor supply curve and a vertical labor demand curve. 
C)  a horizontal labor supply curve and a downward sloping labor demand curve. 
D)  an upward sloping labor supply curve and a horizontal labor demand curve.

Question 17

Mr.Calhoun owned land on which cotton could be grown,but which he had been unable to rent for years.Suddenly he was getting offers from cotton farmers to lease his land.Which of the following best explains this change in circumstances?

Accepted Answer

A)  The price of cotton decreased. 
B)  The price of cotton increased. 
C)  The productivity of the land increased. 
D)  Property taxes on the land increased. 
A)  The price of cotton decreased. 
B)  The price of cotton increased. 
C)  The productivity of the land increased. 
D)  Property taxes on the land increased.

Question 18

Discuss the factors behind the recent decline in labor union membership.

Accepted Answer

Several possible reasons explain the rec

Question 19

Changes in the rental price of land is largely determined by:

Accepted Answer

A)  changes in the supply of land. 
B)  changes in the demand for land. 
C)  changes in the elasticity of supply of land. 
D)  the creation of new landfills. 
A)  changes in the supply of land. 
B)  changes in the demand for land. 
C)  changes in the elasticity of supply of land. 
D)  the creation of new landfills.

Question 20

The contribution of an additional worker to a firm's ____,is the worker's contribution to revenue minus the worker's ____.

Accepted Answer

A)  profits; wage 
B)  output; wage 
C)  profits; marginal productivity 
D)  output; marginal productivity 
A)  profits; wage 
B)  output; wage 
C)  profits; marginal productivity 
D)  output; marginal productivity

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

A decrease in the interest rate will:

Which of the following best illustrates the concept of "derived demand"?

The demand for labor is a derived demand.Employers hire workers until the:

Lower wages will

Which of the following is true regarding labor legislation?

The additional revenue a firm obtains from hiring one more unit of input is called the marginal revenue product.

The supply curve for land is perfectly elastic.

The effect of unions tends to ____ output in the union sector and ____ output in the non-union sector.

Featherbedding refers to the practice of:

Collective bargaining refers to negotiations between:

A change in technology that increases the marginal physical product of an input will:

For an individual's supply curve of labor to be backward bending:

A productivity slowdown could result from

If labor demand rises faster than labor supply,it is expected that real wages will ____.

If unions are successful at increasing union wages,it will

An individual firm in a perfectly competitive labor market faces:

Mr.Calhoun owned land on which cotton could be grown,but which he had been unable to rent for years.Suddenly he was getting offers from cotton farmers to lease his land.Which of the following best explains this change in circumstances?

Discuss the factors behind the recent decline in labor union membership.

Changes in the rental price of land is largely determined by:

The contribution of an additional worker to a firm's ____,is the worker's contribution to revenue minus the worker's ____.

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

The effect of unions tends to output in the union sector and output in the non-union sector.

The contribution of an additional worker to a firm's ,is the worker's contribution to revenue minus the worker's .