Question 1

The standard cobweb model makes the following two assumptions:

Accepted Answer

A) Workers are forward-looking, and job adjustments take time. 
B) Workers are myopic, and job adjustments take time. 
C) Workers are forward-looking, and job adjustments are instantaneous. 
D) Workers are myopic, and job adjustments are instantaneous. 
E) Workers are myopic, and retraining of one's skills happens instantaneously. 
A) Workers are forward-looking, and job adjustments take time. 
B) Workers are myopic, and job adjustments take time. 
C) Workers are forward-looking, and job adjustments are instantaneous. 
D) Workers are myopic, and job adjustments are instantaneous. 
E) Workers are myopic, and retraining of one's skills happens instantaneously.

Question 2

Which of the following is not an accurate summary of the equilibrium associated with a single competitive labor market?

Accepted Answer

A) Firms receive surplus equal to the area above the wage rate and below the demand for labor. 
B) Workers receive surplus equal to the area below the wage rate and above the supply of labor. 
C) All workers are paid the same market-clearing wage. 
D) Total firm surplus equals total worker surplus. 
E) Total economic surplus is maximized. 
A) Firms receive surplus equal to the area above the wage rate and below the demand for labor. 
B) Workers receive surplus equal to the area below the wage rate and above the supply of labor. 
C) All workers are paid the same market-clearing wage. 
D) Total firm surplus equals total worker surplus. 
E) Total economic surplus is maximized.

Question 3

Which of the following is likely to result in the least amount of dead weight loss?

Accepted Answer

A) A payroll tax. 
B) Employer-provided health care insurance. 
C) A legislated minimum wage that is substantially above the competitive wage. 
D) A non-competitive labor market. 
E) A male-dominated society that doesn't allow young girls access to education. 
A) A payroll tax. 
B) Employer-provided health care insurance. 
C) A legislated minimum wage that is substantially above the competitive wage. 
D) A non-competitive labor market. 
E) A male-dominated society that doesn't allow young girls access to education.

Question 4

When the government imposes a payroll tax on workers,

Accepted Answer

A) the effects are identical to the effects had the government imposed the tax on employers. 
B) the costs of hiring remain constant. 
C) the labor supply curve shifts to the right. 
D) total employment remains constant. 
E) workers' real wages are unchanged. 
A) the effects are identical to the effects had the government imposed the tax on employers. 
B) the costs of hiring remain constant. 
C) the labor supply curve shifts to the right. 
D) total employment remains constant. 
E) workers' real wages are unchanged.

Question 5

If labor is supplied perfectly inelastically, the imposition of a payroll tax legislated to be paid by firms will do all of the following except:

Accepted Answer

A) Reduce the wage rate by exactly the amount of the tax. 
B) Leave employment levels unchanged. 
C) Leave firm profits unchanged. 
D) Reduce total output. 
E) Generate tax revenue paid to the government. 
A) Reduce the wage rate by exactly the amount of the tax. 
B) Leave employment levels unchanged. 
C) Leave firm profits unchanged. 
D) Reduce total output. 
E) Generate tax revenue paid to the government.

Question 6

A profit-maximizing monopsonist

Accepted Answer

A) pays the same wage to all types of labor. 
B) hires an equal number of male and female workers and pays them the same wage. 
C) hires more minority workers than non-minority workers, but pays the minority workers less than the non-minorities. 
D) hires fewer workers and pays its workers less than it would if it were operating in a competitive labor market. 
E) substitutes low-skilled labor for high-skilled labor in the long run. 
A) pays the same wage to all types of labor. 
B) hires an equal number of male and female workers and pays them the same wage. 
C) hires more minority workers than non-minority workers, but pays the minority workers less than the non-minorities. 
D) hires fewer workers and pays its workers less than it would if it were operating in a competitive labor market. 
E) substitutes low-skilled labor for high-skilled labor in the long run.

Question 7

Which of the following would prevent a single equilibrium wage existing across all labor markets?

Accepted Answer

A) A competitive labor market. 
B) Workers having various skills and preferences. 
C) Firms being free to enter any of the labor markets. 
D) Potential workers being able to freely enter any of the labor markets. 
E) A payroll tax paid equally by workers and firms. 
A) A competitive labor market. 
B) Workers having various skills and preferences. 
C) Firms being free to enter any of the labor markets. 
D) Potential workers being able to freely enter any of the labor markets. 
E) A payroll tax paid equally by workers and firms.

Question 8

A perfectly discriminating monopsonist

Accepted Answer

A) pays the equilibrium wage to all workers. 
B) pays each worker his or her reservation wage. 
C) receives zero profit in the long run. 
D) disregards minimum wage laws. 
E) faces an increasing value of marginal product curve. 
A) pays the equilibrium wage to all workers. 
B) pays each worker his or her reservation wage. 
C) receives zero profit in the long run. 
D) disregards minimum wage laws. 
E) faces an increasing value of marginal product curve.

Question 9

Many immigrants and many American high school dropouts possess very few skills.What impact will these low-skill immigrants likely have on the labor market opportunities of American high school dropouts?

Accepted Answer

A) Immigration of low-skilled workers is associated with higher wages paid to American high school dropouts. 
B) Immigration of low-skilled workers is associated with lower wages paid to American high school dropouts. 
C) Immigration of low-skilled workers does not affect wages paid to American high school dropouts. 
D) Immigration of low-skilled workers is associated with greater employment among American high school dropouts. 
E) None of the above. 
A) Immigration of low-skilled workers is associated with higher wages paid to American high school dropouts. 
B) Immigration of low-skilled workers is associated with lower wages paid to American high school dropouts. 
C) Immigration of low-skilled workers does not affect wages paid to American high school dropouts. 
D) Immigration of low-skilled workers is associated with greater employment among American high school dropouts. 
E) None of the above.

Question 10

Compared to the labor market outcome when there are no payroll taxes, imposing a payroll tax on labor will typically result in:

Accepted Answer

A) Firms paying a higher wage. 
B) Workers receiving a lower wage net of taxes. 
C) A decrease in overall employment. 
D) An increase in dead weight loss. 
E) All of the above. 
A) Firms paying a higher wage. 
B) Workers receiving a lower wage net of taxes. 
C) A decrease in overall employment. 
D) An increase in dead weight loss. 
E) All of the above.

The standard cobweb model makes the following two assumptions:

Which of the following is not an accurate summary of the equilibrium associated with a single competitive labor market?

Which of the following is likely to result in the least amount of dead weight loss?

When the government imposes a payroll tax on workers,

If labor is supplied perfectly inelastically, the imposition of a payroll tax legislated to be paid by firms will do all of the following except:

A profit-maximizing monopsonist

Which of the following would prevent a single equilibrium wage existing across all labor markets?

A perfectly discriminating monopsonist

Many immigrants and many American high school dropouts possess very few skills.What impact will these low-skill immigrants likely have on the labor market opportunities of American high school dropouts?

Compared to the labor market outcome when there are no payroll taxes, imposing a payroll tax on labor will typically result in:

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

The standard cobweb model makes the following two assumptions:

Which of the following is not an accurate summary of the equilibrium associated with a single competitive labor market?

Which of the following is likely to result in the least amount of dead weight loss?

When the government imposes a payroll tax on workers,

If labor is supplied perfectly inelastically, the imposition of a payroll tax legislated to be paid by firms will do all of the following except:

A profit-maximizing monopsonist

Which of the following would prevent a single equilibrium wage existing across all labor markets?

A perfectly discriminating monopsonist

Many immigrants and many American high school dropouts possess very few skills.What impact will these low-skill immigrants likely have on the labor market opportunities of American high school dropouts?

Compared to the labor market outcome when there are no payroll taxes, imposing a payroll tax on labor will typically result in:

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