Question 1

The break-even level of income is:

Accepted Answer

A) $4500 
B) $6000 
C) $9000 
D) $18,000 
A) $4500 
B) $6000 
C) $9000 
D) $18,000

Question 2

In an income-leisure diagram,the wage rate is graphically represented by the:

Accepted Answer

A) slope of the indifference curves 
B) curvature of the indifference curves 
C) slope of the budget line 
D) tangency of the budget line with an indifference curve 
A) slope of the indifference curves 
B) curvature of the indifference curves 
C) slope of the budget line 
D) tangency of the budget line with an indifference curve

Question 3

The substitution effect is:

Accepted Answer

A) the combination of leisure and wage rate that maximizes one's income 
B) the part of the total change in desired work hours that is due to the change in real income resulting from a change in the wage rate 
C) the part of the total change in desired work hours that is due to a change in the wage rate,with real income or utility constant 
D) always dominated by the income effect 
A) the combination of leisure and wage rate that maximizes one's income 
B) the part of the total change in desired work hours that is due to the change in real income resulting from a change in the wage rate 
C) the part of the total change in desired work hours that is due to a change in the wage rate,with real income or utility constant 
D) always dominated by the income effect

Question 4

On a standard income-leisure diagram,Sara has steeper indifference curves than John.This likely reflects the fact that:

Accepted Answer

A) Sara likes leisure but dislikes income while John likes both 
B) Sara likes income but dislikes leisure while John likes both 
C) Sara values leisure more highly compared to income than John does 
D) John values leisure more highly compared to income than Sara does 
A) Sara likes leisure but dislikes income while John likes both 
B) Sara likes income but dislikes leisure while John likes both 
C) Sara values leisure more highly compared to income than John does 
D) John values leisure more highly compared to income than Sara does

Question 5

The slope of an indifference curve at any point reflects the:

Accepted Answer

A) rate at which a person is willing to substitute leisure for income 
B) wage rate 
C) income effect 
D) substitution effect 
A) rate at which a person is willing to substitute leisure for income 
B) wage rate 
C) income effect 
D) substitution effect

Question 6

Questions are based on the following diagram, which shows a labor supply curve for an individual.

-Of the following,which one would most likely cause this person to supply H1 hours of work at W3 rather than the current H3 hours?

Accepted Answer

A) This person's spouse receives a substantial income increase 
B) A decrease in this person's marginal valuation of leisure time 
C) Congress abolishes an income maintenance program 
D) This person's spouse suffers a substantial cut in income 
A) This person's spouse receives a substantial income increase 
B) A decrease in this person's marginal valuation of leisure time 
C) Congress abolishes an income maintenance program 
D) This person's spouse suffers a substantial cut in income

Question 7

One disadvantage of computer-assisted scheduling of more flexible work schedules for retail workers is that:

Accepted Answer

A) stores are less likely to have enough personnel to meet customer demand 
B) labor costs will likely rise 
C) manager time devoted to scheduling will rise 
D) unusual work shifts make childcare harder to schedule 
A) stores are less likely to have enough personnel to meet customer demand 
B) labor costs will likely rise 
C) manager time devoted to scheduling will rise 
D) unusual work shifts make childcare harder to schedule

Question 8

Consider the impact of a general increase in real wages.Empirical evidence suggests that men will tend to work _____ hours and women will tend to work _____ hours.

Accepted Answer

A) more; fewer 
B) more; about the same 
C) fewer; fewer 
D) about the same; more 
A) more; fewer 
B) more; about the same 
C) fewer; fewer 
D) about the same; more

Question 9

Questions are based on the following diagram, which shows a labor supply curve for an individual.

-If the wage rises from W1 to W2 we may conclude that:

Accepted Answer

A) the income effect is stronger than the substitution effect 
B) the income effect and substitution effects are equal 
C) the substitution effect is stronger than the income effect 
D) labor supply is perfectly inelastic 
A) the income effect is stronger than the substitution effect 
B) the income effect and substitution effects are equal 
C) the substitution effect is stronger than the income effect 
D) labor supply is perfectly inelastic

Question 10

The income effect is:

Accepted Answer

A) the combination of leisure and wage rate that maximizes one's income 
B) the part of the total change in desired work hours that is due to the change in real income resulting from a change in the wage rate 
C) the part of the total change in desired work hours that is due to a change in the wage rate,with real income or utility constant 
D) always dominated by the substitution effect 
A) the combination of leisure and wage rate that maximizes one's income 
B) the part of the total change in desired work hours that is due to the change in real income resulting from a change in the wage rate 
C) the part of the total change in desired work hours that is due to a change in the wage rate,with real income or utility constant 
D) always dominated by the substitution effect

Question 11

Suppose a working mother is currently ineligible for any government assistance.If she were then to become eligible for an income maintenance program that incorporates both a basic benefit and a positive benefit-reduction rate:

Accepted Answer

A) both the income and substitution effect will cause her to increase her work effort 
B) both the income and substitution effect will cause her to decrease her work effort 
C) her work effort will increase if the substitution effect is stronger than the income effect 
D) her work effort will decrease if the substitution effect is stronger than the income effect 
A) both the income and substitution effect will cause her to increase her work effort 
B) both the income and substitution effect will cause her to decrease her work effort 
C) her work effort will increase if the substitution effect is stronger than the income effect 
D) her work effort will decrease if the substitution effect is stronger than the income effect

Question 12

Questions  are based on the following diagram. TS represents the standard 40-hour workweek. Indifference curves labeled with subscripts “a” and “b” are for individuals A and B, respectively.

-Assuming workers must work TS hours or not work at all,worker B will:

Accepted Answer

A) not participate in the labor force 
B) be at an optimum at TS hours of work 
C) work the standard workweek but will feel overemployed 
D) work the standard workweek but will feel underemployed 
A) not participate in the labor force 
B) be at an optimum at TS hours of work 
C) work the standard workweek but will feel overemployed 
D) work the standard workweek but will feel underemployed

Question 13

Suppose an individual worker is on the backward-bending portion of her labor supply curve.Then,for a wage increase,the:

Accepted Answer

A) income and substitution effects both increase desired work hours 
B) income and substitution effects are equal 
C) income effect is stronger than the substitution effect 
D) substitution effect is stronger than the income effect 
A) income and substitution effects both increase desired work hours 
B) income and substitution effects are equal 
C) income effect is stronger than the substitution effect 
D) substitution effect is stronger than the income effect

Question 14

If a family has an earned income of $3000 per year,its subsidy payment will be:

Accepted Answer

A) $6000 
B) $7500 
C) $9000 
D) $0 
A) $6000 
B) $7500 
C) $9000 
D) $0

The break-even level of income is:

In an income-leisure diagram,the wage rate is graphically represented by the:

The substitution effect is:

On a standard income-leisure diagram,Sara has steeper indifference curves than John.This likely reflects the fact that:

The slope of an indifference curve at any point reflects the:

Questions are based on the following diagram, which shows a labor supply curve for an individual. -Of the following,which one would most likely cause this person to supply H₁ hours of work at W₃ rather than the current H₃ hours?

One disadvantage of computer-assisted scheduling of more flexible work schedules for retail workers is that:

Consider the impact of a general increase in real wages.Empirical evidence suggests that men will tend to work _ hours and women will tend to work _ hours.

Questions are based on the following diagram, which shows a labor supply curve for an individual. -If the wage rises from W₁ to W₂ we may conclude that:

The income effect is:

Suppose a working mother is currently ineligible for any government assistance.If she were then to become eligible for an income maintenance program that incorporates both a basic benefit and a positive benefit-reduction rate:

Questions are based on the following diagram. TS represents the standard 40-hour workweek. Indifference curves labeled with subscripts “a” and “b” are for individuals A and B, respectively. -Assuming workers must work TS hours or not work at all,worker B will:

Suppose an individual worker is on the backward-bending portion of her labor supply curve.Then,for a wage increase,the:

If a family has an earned income of $3000 per year,its subsidy payment will be:

Labor Economics: Introduction and Overview

Population, Participation Rates, and Hours of Work

Labor Quality: Investing in Human Capital

The Demand for Labor

Wage Determination and the Allocation of Labor

Alternative Pay Schemes and Labor Efficiency

The Wage Structure

Mobility,Migration,and Efficiency

Labor Unions and Collective Bargaining

The Economic Impact of Unions

Government and the Labor Market: Employment, Expenditures, and Taxation

Government and the Labor Market: Legislation and Regulation

Labor Market Discrimination

Job Search: External and Internal

The Distribution of Personal Earnings

Labor Productivity: Wages,Prices,and Employment

Employment and Unemployment

Filters

Exam 2: The Theory of Individual Labor Supply

The break-even level of income is:

In an income-leisure diagram,the wage rate is graphically represented by the:

The substitution effect is:

On a standard income-leisure diagram,Sara has steeper indifference curves than John.This likely reflects the fact that:

The slope of an indifference curve at any point reflects the:

Questions are based on the following diagram, which shows a labor supply curve for an individual. -Of the following,which one would most likely cause this person to supply H1 hours of work at W3 rather than the current H3 hours?

One disadvantage of computer-assisted scheduling of more flexible work schedules for retail workers is that:

Consider the impact of a general increase in real wages.Empirical evidence suggests that men will tend to work _____ hours and women will tend to work _____ hours.

Questions are based on the following diagram, which shows a labor supply curve for an individual. -If the wage rises from W1 to W2 we may conclude that:

The income effect is:

Suppose a working mother is currently ineligible for any government assistance.If she were then to become eligible for an income maintenance program that incorporates both a basic benefit and a positive benefit-reduction rate:

Questions are based on the following diagram. TS represents the standard 40-hour workweek. Indifference curves labeled with subscripts “a” and “b” are for individuals A and B, respectively. -Assuming workers must work TS hours or not work at all,worker B will:

Suppose an individual worker is on the backward-bending portion of her labor supply curve.Then,for a wage increase,the:

If a family has an earned income of $3000 per year,its subsidy payment will be:

Labor Economics: Introduction and Overview

Population, Participation Rates, and Hours of Work

Labor Quality: Investing in Human Capital

The Demand for Labor

Wage Determination and the Allocation of Labor

Alternative Pay Schemes and Labor Efficiency

The Wage Structure

Mobility,Migration,and Efficiency

Labor Unions and Collective Bargaining

The Economic Impact of Unions

Government and the Labor Market: Employment, Expenditures, and Taxation

Government and the Labor Market: Legislation and Regulation

Labor Market Discrimination

Job Search: External and Internal

The Distribution of Personal Earnings

Labor Productivity: Wages,Prices,and Employment

Employment and Unemployment

Filters

Questions are based on the following diagram, which shows a labor supply curve for an individual. -Of the following,which one would most likely cause this person to supply H₁ hours of work at W₃ rather than the current H₃ hours?

Consider the impact of a general increase in real wages.Empirical evidence suggests that men will tend to work _ hours and women will tend to work _ hours.

Questions are based on the following diagram, which shows a labor supply curve for an individual. -If the wage rises from W₁ to W₂ we may conclude that: