Question 1

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage), its

Accepted Answer

A)  MRC curve is also upsloping. 
B)  MRC curve is perfectly elastic. 
C)  MRP curve is perfectly inelastic. 
D)  MRP curve is also upsloping. 
A)  MRC curve is also upsloping. 
B)  MRC curve is perfectly elastic. 
C)  MRP curve is perfectly inelastic. 
D)  MRP curve is also upsloping.

Question 2

An example of a monopsonist is a labor union whose members include all the workers in a particular industry.

Accepted Answer

A) True 
 B)False

Question 3

Bilateral monopoly occurs where

Accepted Answer

A)  a monopsonistic employer bargains with an inclusive union. 
B)  a monopsonistic employer bargains with an exclusive union. 
C)  a craft union bargains with a purely competitive employer. 
D)  an industrial union bargains with a purely competitive employer. 
A)  a monopsonistic employer bargains with an inclusive union. 
B)  a monopsonistic employer bargains with an exclusive union. 
C)  a craft union bargains with a purely competitive employer. 
D)  an industrial union bargains with a purely competitive employer.

Question 4

(Last Word) Which of the following statements is true about occupational licensing in the United States?

Accepted Answer

A)  In the 1950s only about 5 percent of jobs required an occupational license; today about one-third of jobs require a license. 
B)  The proportion of jobs requiring occupational licenses has remained relatively stable since the 1950s. 
C)  Occupational licensing benefits consumers by reducing firms' costs and lowering output prices. 
D)  Occupational licensing enhances employment opportunities for poorer workers. 
A)  In the 1950s only about 5 percent of jobs required an occupational license; today about one-third of jobs require a license. 
B)  The proportion of jobs requiring occupational licenses has remained relatively stable since the 1950s. 
C)  Occupational licensing benefits consumers by reducing firms' costs and lowering output prices. 
D)  Occupational licensing enhances employment opportunities for poorer workers.

Question 5

(Last Word) Occupational licensing in the United States

Accepted Answer

A)  is required for a majority of jobs. 
B)  is limited primarily to those jobs directly related to human health and safety. 
C)  safeguards consumers in some industries, but in others is mostly a way to restrict entry and raise wages. 
D)  has diminished in recent years as a result of industry deregulation. 
A)  is required for a majority of jobs. 
B)  is limited primarily to those jobs directly related to human health and safety. 
C)  safeguards consumers in some industries, but in others is mostly a way to restrict entry and raise wages. 
D)  has diminished in recent years as a result of industry deregulation.

Question 6

Real wages would rise if the

Accepted Answer

A)  prices of goods and services rose more rapidly than nominal-wage rates. 
B)  prices of goods and services rose less rapidly than nominal-wage rates. 
C)  prices of goods and services and wage rates both rose. 
D)  prices of goods and services and wage rates both fell. 
A)  prices of goods and services rose more rapidly than nominal-wage rates. 
B)  prices of goods and services rose less rapidly than nominal-wage rates. 
C)  prices of goods and services and wage rates both rose. 
D)  prices of goods and services and wage rates both fell.

Question 7

According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S. dollar terms in 2013?

Accepted Answer

A)  Sweden 
B)  Germany 
C)  Australia 
D)  United States 
A)  Sweden 
B)  Germany 
C)  Australia 
D)  United States

Question 8

Wage differentials may result from all the following except

Accepted Answer

A)  differences in the nonmonetary aspects of various occupations. 
B)  differences in the education and skills of workers. 
C)  geographic and sociological immobility of workers. 
D)  the tendency of qualified workers to move from lower pay jobs to higher pay jobs. 
A)  differences in the nonmonetary aspects of various occupations. 
B)  differences in the education and skills of workers. 
C)  geographic and sociological immobility of workers. 
D)  the tendency of qualified workers to move from lower pay jobs to higher pay jobs.

Question 9

If an exclusive union is successful in restricting the supply of labor, the

Accepted Answer

A)  wage rate will rise. 
B)  quantity of labor demanded will rise. 
C)  number of job opportunities in the firm or industry will increase. 
D)  demand for labor curve will shift leftward. 
A)  wage rate will rise. 
B)  quantity of labor demanded will rise. 
C)  number of job opportunities in the firm or industry will increase. 
D)  demand for labor curve will shift leftward.

Question 10

(Consider This) The story about artist Pablo Picasso illustrates the point that

Accepted Answer

A)  the demand for labor is a derived demand. 
B)  geographical immobility impedes an efficient allocation of labor resources. 
C)  principal-agent problems can occur in unusual settings. 
D)  present skills reflect past accumulations of human capital. 
A)  the demand for labor is a derived demand. 
B)  geographical immobility impedes an efficient allocation of labor resources. 
C)  principal-agent problems can occur in unusual settings. 
D)  present skills reflect past accumulations of human capital.

Question 11

Suppose a worker feels unhappy with his job and consequently quits. This illustrates

Accepted Answer

A)  the voice mechanism. 
B)  featherbedding. 
C)  the exit mechanism. 
D)  blacklisting. 
A)  the voice mechanism. 
B)  featherbedding. 
C)  the exit mechanism. 
D)  blacklisting.

Question 12

Which of the following involves the creation of human capital?

Accepted Answer

A)  The XYZ Corporation upgrades the machinery on its assembly line. 
B)  Jones receives apprenticeship training as a carpenter. 
C)  Smith buys 30 shares of common stock. 
D)  A retired person decides to reenter the labor force. 
A)  The XYZ Corporation upgrades the machinery on its assembly line. 
B)  Jones receives apprenticeship training as a carpenter. 
C)  Smith buys 30 shares of common stock. 
D)  A retired person decides to reenter the labor force.

Question 13

A firm operating in a purely competitive labor market has the marginal revenue product schedule shown in the table. $\begin{array}{l}

\begin{array} { | c | c | } 
\hline\text { Warkers}& \text {MRP }\
\hline 1 & \$ 24 \
\hline 2 & 22 \
\hline 3 & 20 \
\hline 4 & 18 \
\hline 5 & 16 \
\hline 6 & 14 \
\hline 7 & 12 \
\hline
\end{array}
\end{array}$ If the wage rate decreases from $17 to $13, by how much will the firm expand employment?

Accepted Answer

A)  5 workers 
B)  4 workers 
C)  3 workers 
D)  2 workers 
A)  5 workers 
B)  4 workers 
C)  3 workers 
D)  2 workers

Question 14

The individual firm that hires labor under competitive conditions faces a labor supply curve that

Accepted Answer

A)  slopes downward to the right. 
B)  is perfectly elastic. 
C)  is perfectly inelastic. 
D)  is of unit elasticity. 
A)  slopes downward to the right. 
B)  is perfectly elastic. 
C)  is perfectly inelastic. 
D)  is of unit elasticity.

Question 15

Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?

Accepted Answer

A)  geographical immobility of workers 
B)  readily available information about job opportunities and pay 
C)  principal-agent problems 
D)  compensating wage differentials 
A)  geographical immobility of workers 
B)  readily available information about job opportunities and pay 
C)  principal-agent problems 
D)  compensating wage differentials

Question 16

In monopsony,

Accepted Answer

A)  each firm employs a small portion of the total supply of labor. 
B)  the workforce is highly mobile. 
C)  the wage rate paid by the employer varies directly with the number of workers employed. 
D)  the employer is a "wage taker." 
A)  each firm employs a small portion of the total supply of labor. 
B)  the workforce is highly mobile. 
C)  the wage rate paid by the employer varies directly with the number of workers employed. 
D)  the employer is a "wage taker."

Question 17

Labor unions may attempt to raise wage rates by

Accepted Answer

A)  increasing the supply of labor. 
B)  forcing employers, under the threat of a strike, to pay above-equilibrium wage rates. 
C)  decreasing the demand for labor. 
D)  increasing the price of complementary resources. 
A)  increasing the supply of labor. 
B)  forcing employers, under the threat of a strike, to pay above-equilibrium wage rates. 
C)  decreasing the demand for labor. 
D)  increasing the price of complementary resources.

Question 18

Firms that pay efficiency wages tend to have higher worker turnover.

Accepted Answer

A) True 
 B)False

Question 19

Models that analyze how labor unions attempt to raise wage rates include the following, except the

Accepted Answer

A)  demand-enhancement model. 
B)  exclusive union model. 
C)  industrial union model. 
D)  credit union model. 
A)  demand-enhancement model. 
B)  exclusive union model. 
C)  industrial union model. 
D)  credit union model.

Question 20

Real wages in the United States in the long run

Accepted Answer

A)  show no discernible relationship to output per worker. 
B)  have increased at about the same rate as increases in output per worker. 
C)  have increased slower than increases in output per worker. 
D)  have increased faster than increases in output per worker. 
A)  show no discernible relationship to output per worker. 
B)  have increased at about the same rate as increases in output per worker. 
C)  have increased slower than increases in output per worker. 
D)  have increased faster than increases in output per worker.

Exam 17: Wage Determination

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage), its

An example of a monopsonist is a labor union whose members include all the workers in a particular industry.

Bilateral monopoly occurs where

(Last Word) Which of the following statements is true about occupational licensing in the United States?

(Last Word) Occupational licensing in the United States

Real wages would rise if the

According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S. dollar terms in 2013?

Wage differentials may result from all the following except

If an exclusive union is successful in restricting the supply of labor, the

(Consider This) The story about artist Pablo Picasso illustrates the point that

Suppose a worker feels unhappy with his job and consequently quits. This illustrates

Which of the following involves the creation of human capital?

A firm operating in a purely competitive labor market has the marginal revenue product schedule shown in the table. Warkers MRP 1 \ 24 2 22 3 20 4 18 5 16 6 14 7 12 If the wage rate decreases from $17 to $13, by how much will the firm expand employment?

The individual firm that hires labor under competitive conditions faces a labor supply curve that

Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?

In monopsony,

Labor unions may attempt to raise wage rates by

Firms that pay efficiency wages tend to have higher worker turnover.

Models that analyze how labor unions attempt to raise wage rates include the following, except the

Real wages in the United States in the long run

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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