Question 1

If the nominal wage rises by 6 percent,and the price level falls by 2 percent,the real wage will:

Accepted Answer

A)  be unaffected. 
B)  rise by 4 percent. 
C)  fall by 4 percent. 
D)  rise by 8 percent. 
A)  be unaffected. 
B)  rise by 4 percent. 
C)  fall by 4 percent. 
D)  rise by 8 percent.

Question 2

According to international comparisons,which nation had the highest hourly pay in U.S.dollar terms in 2011?

Accepted Answer

A)  United States. 
B)  Germany. 
C)  Denmark. 
D)  Sweden. 
A)  United States. 
B)  Germany. 
C)  Denmark. 
D)  Sweden.

Question 3

Which of the following is correct?

Accepted Answer

A)  The federal government can delay any strike for 80 days. 
B)  About 3 percent of total work time is lost in the United States because of strikes. 
C)  Work time lost may overstate the cost of a strike if the work stoppage disrupts production in related industries. 
D)  Work time lost may overstate the cost of a strike if nonstruck firms increase their production. 
A)  The federal government can delay any strike for 80 days. 
B)  About 3 percent of total work time is lost in the United States because of strikes. 
C)  Work time lost may overstate the cost of a strike if the work stoppage disrupts production in related industries. 
D)  Work time lost may overstate the cost of a strike if nonstruck firms increase their production.

Question 4

Marginal resource (labor)cost will exceed the wage rate when there is imperfect competition in the hire of labor.

Accepted Answer

A) True 
 B)False

Question 5

A monopsonistic employer:

Accepted Answer

A)  has a perfectly elastic labor supply curve. 
B)  is necessarily a monopolist in the product market. 
C)  confronts a marginal resource (labor)cost that is greater than the wage rate. 
D)  confronts a marginal resource (labor)cost that is less than the wage rate. 
A)  has a perfectly elastic labor supply curve. 
B)  is necessarily a monopolist in the product market. 
C)  confronts a marginal resource (labor)cost that is greater than the wage rate. 
D)  confronts a marginal resource (labor)cost that is less than the wage rate.

Question 6

Since 1960,real hourly compensation in the United States has approximately:

Accepted Answer

A)  remained the same. 
B)  risen by 40 percent. 
C)  doubled. 
D)  tripled. 
A)  remained the same. 
B)  risen by 40 percent. 
C)  doubled. 
D)  tripled.

Question 7

There is no evidence that unions are able to increase wage rates above those that the market would otherwise provide.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is most likely to be an example of monopsony?

Accepted Answer

A)  The market for fast-food workers in a large summer resort town. 
B)  The market for card dealers in Las Vegas. 
C)  The market for Major League Baseball umpires. 
D)  The market for retail sales clerks in a major city. 
A)  The market for fast-food workers in a large summer resort town. 
B)  The market for card dealers in Las Vegas. 
C)  The market for Major League Baseball umpires. 
D)  The market for retail sales clerks in a major city.

Question 9

A profit-maximizing firm will:

Accepted Answer

A)  expand employment if marginal revenue product exceeds marginal resource cost. 
B)  reduce employment if marginal revenue product exceeds marginal resource cost. 
C)  expand employment if marginal revenue product equals marginal resource cost. 
D)  reduce employment if marginal revenue product equals marginal resource cost. 
A)  expand employment if marginal revenue product exceeds marginal resource cost. 
B)  reduce employment if marginal revenue product exceeds marginal resource cost. 
C)  expand employment if marginal revenue product equals marginal resource cost. 
D)  reduce employment if marginal revenue product equals marginal resource cost.

Question 10

Suppose all workers are identical but working for Ajax is more pleasant than working for Acme.In all other nonwage aspects,the two firms offer the same job characteristics.We would expect:

Accepted Answer

A)  wage rates at Ajax to be higher than at Acme. 
B)  wage rates at Ajax to be lower than at Acme. 
C)  wage rates at Ajax and Acme to be the same. 
D)  workers at Ajax would have to be monitored more closely than those at Acme. 
A)  wage rates at Ajax to be higher than at Acme. 
B)  wage rates at Ajax to be lower than at Acme. 
C)  wage rates at Ajax and Acme to be the same. 
D)  workers at Ajax would have to be monitored more closely than those at Acme.

Question 11

Which of the following is correct?

Accepted Answer

A)  The nominal wage may fall,but the real wage can never decline. 
B)  The real wage may fall,but the nominal wage can never decline. 
C)  Both the nominal and the real wage must always rise. 
D)  The nominal and the real wage may both fall. 
A)  The nominal wage may fall,but the real wage can never decline. 
B)  The real wage may fall,but the nominal wage can never decline. 
C)  Both the nominal and the real wage must always rise. 
D)  The nominal and the real wage may both fall.

Question 12

Jack and Jill have identical skills and training,but Jill earns higher wages in her job.Which of the following reasons would best explain why Jill earns more than Jack?

Accepted Answer

A)  Jack has a chronic illness and would lose health care coverage if he changed jobs. 
B)  Jill suffers from gender discrimination in the workplace. 
C)  Jack has better access to information about available jobs in his field. 
D)  Jill is reluctant to move to a new city because she wants to live near family. 
A)  Jack has a chronic illness and would lose health care coverage if he changed jobs. 
B)  Jill suffers from gender discrimination in the workplace. 
C)  Jack has better access to information about available jobs in his field. 
D)  Jill is reluctant to move to a new city because she wants to live near family.

Question 13

In which of the following U.S.industries is the rate of unionization the highest?

Accepted Answer

A)  Construction. 
B)  Government. 
C)  Transportation. 
D)  Agriculture. 
A)  Construction. 
B)  Government. 
C)  Transportation. 
D)  Agriculture.

Question 14

Noncompeting groups of workers are the result of geographic immobilities.

Accepted Answer

A) True 
 B)False

Question 15

Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode,New Mexico.Also,suppose that this labor force is highly immobile.Economists would describe this employer as a:

Accepted Answer

A)  monopolist. 
B)  oligopolist. 
C)  monopsonist. 
D)  monopolistic competitor. 
A)  monopolist. 
B)  oligopolist. 
C)  monopsonist. 
D)  monopolistic competitor.

Question 16

The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

Accepted Answer

A) True 
 B)False

Question 17

The earnings of highly educated workers:

Accepted Answer

A)  rise more slowly than those of less-educated workers. 
B)  rise more rapidly than those of less-educated workers. 
C)  rise at about the same rate as those of less-educated workers. 
D)  stagnate earlier than do those of less-educated workers. 
A)  rise more slowly than those of less-educated workers. 
B)  rise more rapidly than those of less-educated workers. 
C)  rise at about the same rate as those of less-educated workers. 
D)  stagnate earlier than do those of less-educated workers.

Question 18

According to age-earnings data,

Accepted Answer

A)  lower-educated workers have similar earnings at age 65 as higher-educated workers. 
B)  investments in education result in higher earnings. 
C)  high earnings are due to motivation and innate ability,rather than education. 
D)  there is no clear relationship between education and worker productivity. 
A)  lower-educated workers have similar earnings at age 65 as higher-educated workers. 
B)  investments in education result in higher earnings. 
C)  high earnings are due to motivation and innate ability,rather than education. 
D)  there is no clear relationship between education and worker productivity.

Question 19

Marginal revenue product (MRP)of labor refers to the:

Accepted Answer

A)  increase in total revenue resulting from the sale of an additional unit of output. 
B)  amount by which a firm's total resource cost increases when it employs one more unit of labor. 
C)  increase in total revenue resulting from the hire of one more unit of labor. 
D)  price at which additional units of labor can be employed in a monopsonized labor market. 
A)  increase in total revenue resulting from the sale of an additional unit of output. 
B)  amount by which a firm's total resource cost increases when it employs one more unit of labor. 
C)  increase in total revenue resulting from the hire of one more unit of labor. 
D)  price at which additional units of labor can be employed in a monopsonized labor market.

Question 20

The economic term for a firm that is the sole buyer in a market is:

Accepted Answer

A)  monopsonist. 
B)  monopolist. 
C)  bilateral competitor. 
D)  bilateral monopolist. 
A)  monopsonist. 
B)  monopolist. 
C)  bilateral competitor. 
D)  bilateral monopolist.

Exam 16: Wage Determination

If the nominal wage rises by 6 percent,and the price level falls by 2 percent,the real wage will:

According to international comparisons,which nation had the highest hourly pay in U.S.dollar terms in 2011?

Which of the following is correct?

Marginal resource (labor)cost will exceed the wage rate when there is imperfect competition in the hire of labor.

A monopsonistic employer:

Since 1960,real hourly compensation in the United States has approximately:

There is no evidence that unions are able to increase wage rates above those that the market would otherwise provide.

Which of the following is most likely to be an example of monopsony?

A profit-maximizing firm will:

Suppose all workers are identical but working for Ajax is more pleasant than working for Acme.In all other nonwage aspects,the two firms offer the same job characteristics.We would expect:

Which of the following is correct?

Jack and Jill have identical skills and training,but Jill earns higher wages in her job.Which of the following reasons would best explain why Jill earns more than Jack?

In which of the following U.S.industries is the rate of unionization the highest?

Noncompeting groups of workers are the result of geographic immobilities.

Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode,New Mexico.Also,suppose that this labor force is highly immobile.Economists would describe this employer as a:

The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

The earnings of highly educated workers:

According to age-earnings data,

Marginal revenue product (MRP)of labor refers to the:

The economic term for a firm that is the sole buyer in a market is:

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 Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

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