Question 1

Which of the following statements regarding immigration is true?

Accepted Answer

A) For each employed immigrant there is an unemployed native worker. 
B) Immigration always results in lower native wages. 
C) All immigrants are low-skilled. 
D) Firms do not receive a substantial immigrant surplus. 
E) Consumers benefit from immigration via lower prices. 
A) For each employed immigrant there is an unemployed native worker. 
B) Immigration always results in lower native wages. 
C) All immigrants are low-skilled. 
D) Firms do not receive a substantial immigrant surplus. 
E) Consumers benefit from immigration via lower prices. E

Question 2

Which of the following does not describe a perfectly discriminating monopsonist?

Accepted Answer

A) The firm hires different workers at different wages. 
B) The firm hires workers to the point where the labor supply curve intersects the firm's labor demand curve. 
C) The firm's marginal cost of labor equals the labor supply curve faced by the firm. 
D) The firm uses fewer hours of labor than it would if it were in a competitive market. 
E) The wage-labor outcome is efficient. 
A) The firm hires different workers at different wages. 
B) The firm hires workers to the point where the labor supply curve intersects the firm's labor demand curve. 
C) The firm's marginal cost of labor equals the labor supply curve faced by the firm. 
D) The firm uses fewer hours of labor than it would if it were in a competitive market. 
E) The wage-labor outcome is efficient. D

Question 3

Which of the following does not characterize a perfectly discriminating monopsonist?

Accepted Answer

A) The firm's marginal cost of hiring curve is the labor supply curve. 
B) The firm hires more workers than it would if it were a competitive firm. 
C) The firm chooses employment and wage levels in order to maximize profit. 
D) The firm pays each worker his or her reservation wage. 
E) The labor supply curve can be upward sloping. 
A) The firm's marginal cost of hiring curve is the labor supply curve. 
B) The firm hires more workers than it would if it were a competitive firm. 
C) The firm chooses employment and wage levels in order to maximize profit. 
D) The firm pays each worker his or her reservation wage. 
E) The labor supply curve can be upward sloping. B

Question 4

Suppose a law firm negotiates a very low price for each of its 1,000 employees to be members at the athletic club that is located next to the law firm.Which of the following is not likely to be true?

Accepted Answer

A) The law firm can pay its workers less than a comparable law firm that does not offer the gym benefit. 
B) The firm can likely negotiate a lower per person price at the gym than each employee could negotiate alone. 
C) Some employees will take advantage of the gym benefit, while others will not. 
D) In the long run, the law firm will probably attract workers who value the gym benefit the most. 
E) If the typical individual gym membership costs $50 per month, the law firm should expect to save $50,000 per month in wages. 
A) The law firm can pay its workers less than a comparable law firm that does not offer the gym benefit. 
B) The firm can likely negotiate a lower per person price at the gym than each employee could negotiate alone. 
C) Some employees will take advantage of the gym benefit, while others will not. 
D) In the long run, the law firm will probably attract workers who value the gym benefit the most. 
E) If the typical individual gym membership costs $50 per month, the law firm should expect to save $50,000 per month in wages.

Question 5

If unskilled domestic labor and unskilled immigrant labor are substitutes in the production process, then a more open immigration policy will likely result in all but which of the following?

Accepted Answer

A) The total market supply of unskilled labor shifts out. 
B) The market-clearing wage for unskilled labor decreases. 
C) Total employment of unskilled labor increases. 
D) The wage received by unskilled native workers decreases. 
E) The demand curve for unskilled labor shifts up (out). 
A) The total market supply of unskilled labor shifts out. 
B) The market-clearing wage for unskilled labor decreases. 
C) Total employment of unskilled labor increases. 
D) The wage received by unskilled native workers decreases. 
E) The demand curve for unskilled labor shifts up (out).

Question 6

If a firm operates in a competitive labor market and in a non-competitive output market, then the firm faces

Accepted Answer

A) a constant wage rate when hiring more labor and a constant price when selling more of its output. 
B) an increasing wage rate when hiring more labor but a constant price when selling more of its output. 
C) a constant wage rate when hiring more labor but a decreasing price when selling more of its output. 
D) an increasing wage rate when hiring more labor but a decreasing price when selling more of its output good. 
E) a decreasing wage rate when hiring more labor but a decreasing price when selling more of its output good. 
A) a constant wage rate when hiring more labor and a constant price when selling more of its output. 
B) an increasing wage rate when hiring more labor but a constant price when selling more of its output. 
C) a constant wage rate when hiring more labor but a decreasing price when selling more of its output. 
D) an increasing wage rate when hiring more labor but a decreasing price when selling more of its output good. 
E) a decreasing wage rate when hiring more labor but a decreasing price when selling more of its output good.

Question 7

A perfectly discriminating monopsonist pays each worker his or her reservation wage.This results in

Accepted Answer

A) the firm receiving zero profit. 
B) the firm substituting capital for labor. 
C) the firm receiving all of the surplus. 
D) the firm avoiding payroll taxes. 
E) workers being unwilling to work at the offered wage. 
A) the firm receiving zero profit. 
B) the firm substituting capital for labor. 
C) the firm receiving all of the surplus. 
D) the firm avoiding payroll taxes. 
E) workers being unwilling to work at the offered wage.

Question 8

If immigrant workers are complementary to native workers, then

Accepted Answer

A) native workers will be better off with open borders. 
B) immigrant workers will receive a higher wage than native workers. 
C) immigration will shift the demand for native labor to the left. 
D) there will be no immigration surplus. 
E) each firm will hire only immigrants or only natives but not a mixture of the two. 
A) native workers will be better off with open borders. 
B) immigrant workers will receive a higher wage than native workers. 
C) immigration will shift the demand for native labor to the left. 
D) there will be no immigration surplus. 
E) each firm will hire only immigrants or only natives but not a mixture of the two.

Question 9

When the government mandates that firms supply a particular benefit, it is usually the case that

Accepted Answer

A) the cost of providing the benefit is less than the worker's value of the benefit. 
B) employment will increase. 
C) the wage will increase. 
D) the wage will decrease by more than the cost of providing the benefit. 
E) the wage will decrease by less than the cost of providing the benefit. 
A) the cost of providing the benefit is less than the worker's value of the benefit. 
B) employment will increase. 
C) the wage will increase. 
D) the wage will decrease by more than the cost of providing the benefit. 
E) the wage will decrease by less than the cost of providing the benefit.

Question 10

Which of the following would result in a short-run increase in the wage rate in a competitive labor market?

Accepted Answer

A) An increase in immigration. 
B) An increase in the output price. 
C) A decrease in productivity. 
D) An increase in native labor supply. 
E) A decrease in labor demand. 
A) An increase in immigration. 
B) An increase in the output price. 
C) A decrease in productivity. 
D) An increase in native labor supply. 
E) A decrease in labor demand.

Question 11

A monopsonist is

Accepted Answer

A) a firm with partial control over an industry. 
B) a firm operating in a regulated industry. 
C) a firm that is the single purchaser of a factor of production. 
D) a firm that competes for labor but sells its output in a non-competitive market. 
E) a group of firms, much like a cartel, that restricts the demand for labor in a market. 
A) a firm with partial control over an industry. 
B) a firm operating in a regulated industry. 
C) a firm that is the single purchaser of a factor of production. 
D) a firm that competes for labor but sells its output in a non-competitive market. 
E) a group of firms, much like a cartel, that restricts the demand for labor in a market.

Question 12

Assuming a country has a constant returns to scale Cobb-Douglas production function, what effect will immigration have on native labor that has a high degree of substitutability with the immigrant labor?

Accepted Answer

A) Immigration has no long-run effect on native wages. 
B) Immigration lowers native wages in the long run. 
C) Immigration raises the labor-capital ratio in the long run. 
D) Immigration has no short-run effect on native wages. 
E) Immigration has a negative effect on total employment in the short run. 
A) Immigration has no long-run effect on native wages. 
B) Immigration lowers native wages in the long run. 
C) Immigration raises the labor-capital ratio in the long run. 
D) Immigration has no short-run effect on native wages. 
E) Immigration has a negative effect on total employment in the short run.

Question 13

If native workers and immigrants are substitutes, then

Accepted Answer

A) native workers will be better off with open borders. 
B) native workers will encourage immigration. 
C) native firms will discourage immigration. 
D) immigrant workers will receive a higher wage than native workers. 
E) immigration will shift the labor supply curve to the right. 
A) native workers will be better off with open borders. 
B) native workers will encourage immigration. 
C) native firms will discourage immigration. 
D) immigrant workers will receive a higher wage than native workers. 
E) immigration will shift the labor supply curve to the right.

Question 14

When the government imposes a payroll tax on employers (and not on workers), which of the following effects will not come about?

Accepted Answer

A) The labor demand curve shifts down. 
B) Employment falls. 
C) Firms and workers typically both bear a portion of the tax. 
D) Real wages will remain fixed if the labor market is competitive. 
E) The costs of hiring increase. 
A) The labor demand curve shifts down. 
B) Employment falls. 
C) Firms and workers typically both bear a portion of the tax. 
D) Real wages will remain fixed if the labor market is competitive. 
E) The costs of hiring increase.

Question 15

Supposing that immigrant labor is complementary to native labor in the production process, a more open immigration policy will likely result in all but which of the following?

Accepted Answer

A) Firms will value native labor more highly. 
B) The labor demand curve for native workers shifts out. 
C) Lower wages paid to native workers. 
D) Overall economic efficiency increases. 
E) Overall native employment increases. 
A) Firms will value native labor more highly. 
B) The labor demand curve for native workers shifts out. 
C) Lower wages paid to native workers. 
D) Overall economic efficiency increases. 
E) Overall native employment increases.

Question 16

If labor supply of unskilled workers is perfectly inelastic, then

Accepted Answer

A) firms face an increasing marginal cost of hiring unskilled labor. 
B) firms face a horizontal value of marginal product of employment curve. 
C) the labor supply curve of unskilled workers is horizontal at the market clearing wage. 
D) the labor supply curve of unskilled workers is vertical at the total number of unskilled workers in the market. 
E) workers will supply more hours of labor to the market when wages increase. 
A) firms face an increasing marginal cost of hiring unskilled labor. 
B) firms face a horizontal value of marginal product of employment curve. 
C) the labor supply curve of unskilled workers is horizontal at the market clearing wage. 
D) the labor supply curve of unskilled workers is vertical at the total number of unskilled workers in the market. 
E) workers will supply more hours of labor to the market when wages increase.

Question 17

Standard economic theory suggests which of the following in terms of labor migration across states in the U.S.?

Accepted Answer

A) Workers migrate randomly. 
B) Workers migrate at most twice per lifetime. 
C) Workers are likely to migrate from low-wage states to high-wage states. 
D) Workers are likely to migrate from high-wage states to low-wage states. 
E) Older workers are more likely to migrate than are younger workers. 
A) Workers migrate randomly. 
B) Workers migrate at most twice per lifetime. 
C) Workers are likely to migrate from low-wage states to high-wage states. 
D) Workers are likely to migrate from high-wage states to low-wage states. 
E) Older workers are more likely to migrate than are younger workers.

Question 18

The assumption that a firm operates in a competitive labor market means that

Accepted Answer

A) the firm offers a real wage rate that is indexed for inflation. 
B) the firm faces an upward-sloped marginal cost of labor curve. 
C) the firm faces a downward-sloped marginal cost of labor curve. 
D) the firm faces a constant wage regardless of how much labor it employs. 
E) the firm doesn't use capital in the production process. 
A) the firm offers a real wage rate that is indexed for inflation. 
B) the firm faces an upward-sloped marginal cost of labor curve. 
C) the firm faces a downward-sloped marginal cost of labor curve. 
D) the firm faces a constant wage regardless of how much labor it employs. 
E) the firm doesn't use capital in the production process.

Question 19

Which is the distinguishing feature of the standard cobweb model?

Accepted Answer

A) The firm is a perfectly discriminating monopsonist. 
B) Wages and employment levels adjust slowly over time. 
C) Payroll taxes create a tax wedge, which in turn increases overall employment levels. 
D) Real wages steadily increase. 
E) Capital is not fixed in the short run. 
A) The firm is a perfectly discriminating monopsonist. 
B) Wages and employment levels adjust slowly over time. 
C) Payroll taxes create a tax wedge, which in turn increases overall employment levels. 
D) Real wages steadily increase. 
E) Capital is not fixed in the short run.

Question 20

Which one of the following statements is true?

Accepted Answer

A) A monopolist is necessarily a monopsonist. 
B) A monopsonist is necessarily a monopolist. 
C) A monopsonist is a perfectly discriminating monopolist. 
D) Firm surplus always exceeds worker surplus. 
E) None of the above statements are true. 
A) A monopolist is necessarily a monopsonist. 
B) A monopsonist is necessarily a monopolist. 
C) A monopsonist is a perfectly discriminating monopolist. 
D) Firm surplus always exceeds worker surplus. 
E) None of the above statements are true.

Which of the following statements regarding immigration is true?

Which of the following does not describe a perfectly discriminating monopsonist?

Which of the following does not characterize a perfectly discriminating monopsonist?

Suppose a law firm negotiates a very low price for each of its 1,000 employees to be members at the athletic club that is located next to the law firm.Which of the following is not likely to be true?

If unskilled domestic labor and unskilled immigrant labor are substitutes in the production process, then a more open immigration policy will likely result in all but which of the following?

If a firm operates in a competitive labor market and in a non-competitive output market, then the firm faces

A perfectly discriminating monopsonist pays each worker his or her reservation wage.This results in

If immigrant workers are complementary to native workers, then

When the government mandates that firms supply a particular benefit, it is usually the case that

Which of the following would result in a short-run increase in the wage rate in a competitive labor market?

A monopsonist is

Assuming a country has a constant returns to scale Cobb-Douglas production function, what effect will immigration have on native labor that has a high degree of substitutability with the immigrant labor?

If native workers and immigrants are substitutes, then

When the government imposes a payroll tax on employers (and not on workers), which of the following effects will not come about?

Supposing that immigrant labor is complementary to native labor in the production process, a more open immigration policy will likely result in all but which of the following?

If labor supply of unskilled workers is perfectly inelastic, then

Standard economic theory suggests which of the following in terms of labor migration across states in the U.S.?

The assumption that a firm operates in a competitive labor market means that

Which is the distinguishing feature of the standard cobweb model?

Which one of the following statements is true?

Introduction to Labor Economics

Labor Supply

Labor Demand

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters

Exam 4: Labor Market Equilibrium

Which of the following statements regarding immigration is true?

Which of the following does not describe a perfectly discriminating monopsonist?

Which of the following does not characterize a perfectly discriminating monopsonist?

Suppose a law firm negotiates a very low price for each of its 1,000 employees to be members at the athletic club that is located next to the law firm.Which of the following is not likely to be true?

If unskilled domestic labor and unskilled immigrant labor are substitutes in the production process, then a more open immigration policy will likely result in all but which of the following?

If a firm operates in a competitive labor market and in a non-competitive output market, then the firm faces

A perfectly discriminating monopsonist pays each worker his or her reservation wage.This results in

If immigrant workers are complementary to native workers, then

When the government mandates that firms supply a particular benefit, it is usually the case that

Which of the following would result in a short-run increase in the wage rate in a competitive labor market?

A monopsonist is

Assuming a country has a constant returns to scale Cobb-Douglas production function, what effect will immigration have on native labor that has a high degree of substitutability with the immigrant labor?

If native workers and immigrants are substitutes, then

When the government imposes a payroll tax on employers (and not on workers), which of the following effects will not come about?

Supposing that immigrant labor is complementary to native labor in the production process, a more open immigration policy will likely result in all but which of the following?

If labor supply of unskilled workers is perfectly inelastic, then

Standard economic theory suggests which of the following in terms of labor migration across states in the U.S.?

The assumption that a firm operates in a competitive labor market means that

Which is the distinguishing feature of the standard cobweb model?

Which one of the following statements is true?

Introduction to Labor Economics

Labor Supply

Labor Demand

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Unemployment

Filters