Question 1

Assume a university pays the football coach significantly more than the university's president.This makes good economic sense if the coach:

Accepted Answer

A)  Is more popular. 
B)  Has a higher level of education. 
C)  Has been employed at the university longer than the president. 
D)  Brings more revenue to the university than the president. 
A)  Is more popular. 
B)  Has a higher level of education. 
C)  Has been employed at the university longer than the president. 
D)  Brings more revenue to the university than the president. D

Question 2

It is easy to measure the value of a CEO by calculating his or her marginal revenue product.

Accepted Answer

A) True 
 B)False  False

Question 3

The market supply of labor depends on the:

Accepted Answer

A)  Number of employers. 
B)  Marginal revenue product of labor. 
C)  Price of the product being produced. 
D)  Number of available workers. 
A)  Number of employers. 
B)  Marginal revenue product of labor. 
C)  Price of the product being produced. 
D)  Number of available workers. D

Question 4

According to the law of diminishing returns,as more workers are hired:

Accepted Answer

A)  Marginal utility declines. 
B)  Opportunity cost increases. 
C)  Marginal revenue product increases. 
D)  Marginal physical product declines. 
A)  Marginal utility declines. 
B)  Opportunity cost increases. 
C)  Marginal revenue product increases. 
D)  Marginal physical product declines.

Question 5

When a worker's MRP is difficult to measure,for example,a college professor or corporate CEO,wages can be determined by the:

Accepted Answer

A)  Supply of labor alone. 
B)  Minimum wage. 
C)  Wages the worker would receive in his or her best alternative job. 
D)  Average wage of government workers. 
A)  Supply of labor alone. 
B)  Minimum wage. 
C)  Wages the worker would receive in his or her best alternative job. 
D)  Average wage of government workers.

Question 6

Unions influence a labor market by doing all of the following except:

Accepted Answer

A)  Raising the wages for workers in the nonunion market. 
B)  Excluding some workers from the unionized market. 
C)  Increasing the labor supply curve in the nonunion market. 
D)  Attaining above-equilibrium wages for union members. 
A)  Raising the wages for workers in the nonunion market. 
B)  Excluding some workers from the unionized market. 
C)  Increasing the labor supply curve in the nonunion market. 
D)  Attaining above-equilibrium wages for union members.

Question 7

As the opportunity cost of working increases,workers require higher rates of pay.

Accepted Answer

A) True 
 B)False

Question 8

Figure 8.4-Shifts of labor supply and labor demand
Answer the indicated question(s)by selecting the letter of the following diagrams showing labor supply and labor demand shifts that best represent the effect of each event on the relevant market,ceteris paribus.  
-Refer to Figure 8.4.Union members go on strike.

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 9

Figure 8.3-Apple Production  
-In Figure 8.3,the 7th worker will:

Accepted Answer

A)  Be hired since the MRP is greater than the wage rate. 
B)  Not be hired since the MRP is greater than the wage rate. 
C)  Be hired since the MRP is less than the wage rate. 
D)  Not be hired since the MRP is less than the wage rate. 
A)  Be hired since the MRP is greater than the wage rate. 
B)  Not be hired since the MRP is greater than the wage rate. 
C)  Be hired since the MRP is less than the wage rate. 
D)  Not be hired since the MRP is less than the wage rate.

Question 10

The marginal revenue product sets a lower limit on the wage rate an employer will pay.

Accepted Answer

A) True 
 B)False

Question 11

The equilibrium level of employment is determined by:

Accepted Answer

A)  The market demand for labor and the market supply of labor. 
B)  The intersection of MPP and MRP. 
C)  Government regulations. 
D)  Collusion by the most powerful employers in a market. 
A)  The market demand for labor and the market supply of labor. 
B)  The intersection of MPP and MRP. 
C)  Government regulations. 
D)  Collusion by the most powerful employers in a market.

Question 12

What do government imposed price floors not cause?

Accepted Answer

A)  Reduces the quantity of labor demanded. 
B)  Increases the quantity of labor supplied. 
C)  Cause some workers to be better off. 
D)  Create a market shortage. 
A)  Reduces the quantity of labor demanded. 
B)  Increases the quantity of labor supplied. 
C)  Cause some workers to be better off. 
D)  Create a market shortage.

Question 13

An upward-sloping supply curve of labor illustrates that the:

Accepted Answer

A)  Supply of labor and the wage rate are inversely related. 
B)  Quantity of labor supplied and the wage rate are directly related. 
C)  Quantity of labor supplied and the minimum wage are indirectly related. 
D)  Quantity of labor supplied and the hours of work per week are inversely related. 
A)  Supply of labor and the wage rate are inversely related. 
B)  Quantity of labor supplied and the wage rate are directly related. 
C)  Quantity of labor supplied and the minimum wage are indirectly related. 
D)  Quantity of labor supplied and the hours of work per week are inversely related.

Question 14

Figure 8.3-Apple Production  
-In Figure 8.3,the 5th worker will:

Accepted Answer

A)  Be hired since the MRP is greater than the wage rate. 
B)  Not be hired since the MRP is greater than the wage rate. 
C)  Be hired since the MRP is less than the wage rate. 
D)  Not be hired since the MRP is less than the wage rate. 
A)  Be hired since the MRP is greater than the wage rate. 
B)  Not be hired since the MRP is greater than the wage rate. 
C)  Be hired since the MRP is less than the wage rate. 
D)  Not be hired since the MRP is less than the wage rate.

Question 15

If the government decides to raise the minimum wage,ceteris paribus:

Accepted Answer

A)  All workers are better off. 
B)  All workers are worse off. 
C)  Some workers are better off and some are worse off. 
D)  Workers are not affected by a minimum wage increase,only by a decrease. 
A)  All workers are better off. 
B)  All workers are worse off. 
C)  Some workers are better off and some are worse off. 
D)  Workers are not affected by a minimum wage increase,only by a decrease.

Question 16

The law of diminishing returns states that,ceteris paribus,the MPP of labor declines as:

Accepted Answer

A)  Additional land,raw materials,and other factors of production are employed. 
B)  The wage rate falls. 
C)  The product price declines. 
D)  More labor is employed. 
A)  Additional land,raw materials,and other factors of production are employed. 
B)  The wage rate falls. 
C)  The product price declines. 
D)  More labor is employed.

Question 17

If consumers want to increase the wages and the number of jobs for strawberry pickers they should:

Accepted Answer

A)  Insist that the government establish a minimum wage for strawberry pickers. 
B)  Boycott strawberries until wages increase. 
C)  Insist that sellers raise the price of strawberries. 
D)  Buy more strawberries. 
A)  Insist that the government establish a minimum wage for strawberry pickers. 
B)  Boycott strawberries until wages increase. 
C)  Insist that sellers raise the price of strawberries. 
D)  Buy more strawberries.

Question 18

Figure 8.4-Shifts of labor supply and labor demand
Answer the indicated question(s)by selecting the letter of the following diagrams showing labor supply and labor demand shifts that best represent the effect of each event on the relevant market,ceteris paribus.  
-Refer to Figure 8.4.Working conditions become less pleasant.

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 19

At the equilibrium wage,the quantity demanded of labor equals the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 20

The demand for labor is a derived demand because:

Accepted Answer

A)  labor is hired based on when the MRP is equal to the wage rate. 
B)  we demand what labor produces and not labor itself. 
C)  all products must have some labor embodied in them. 
D)  labor is a variable input. 
A)  labor is hired based on when the MRP is equal to the wage rate. 
B)  we demand what labor produces and not labor itself. 
C)  all products must have some labor embodied in them. 
D)  labor is a variable input.

Assume a university pays the football coach significantly more than the university's president.This makes good economic sense if the coach:

It is easy to measure the value of a CEO by calculating his or her marginal revenue product.

The market supply of labor depends on the:

According to the law of diminishing returns,as more workers are hired:

When a worker's MRP is difficult to measure,for example,a college professor or corporate CEO,wages can be determined by the:

Unions influence a labor market by doing all of the following except:

As the opportunity cost of working increases,workers require higher rates of pay.

Figure 8.3-Apple Production -In Figure 8.3,the 7^th worker will:

The marginal revenue product sets a lower limit on the wage rate an employer will pay.

The equilibrium level of employment is determined by:

What do government imposed price floors not cause?

An upward-sloping supply curve of labor illustrates that the:

Figure 8.3-Apple Production -In Figure 8.3,the 5^th worker will:

If the government decides to raise the minimum wage,ceteris paribus:

The law of diminishing returns states that,ceteris paribus,the MPP of labor declines as:

If consumers want to increase the wages and the number of jobs for strawberry pickers they should:

At the equilibrium wage,the quantity demanded of labor equals the quantity supplied.

The demand for labor is a derived demand because:

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 8: The Labor Market

Assume a university pays the football coach significantly more than the university's president.This makes good economic sense if the coach:

It is easy to measure the value of a CEO by calculating his or her marginal revenue product.

The market supply of labor depends on the:

According to the law of diminishing returns,as more workers are hired:

When a worker's MRP is difficult to measure,for example,a college professor or corporate CEO,wages can be determined by the:

Unions influence a labor market by doing all of the following except:

As the opportunity cost of working increases,workers require higher rates of pay.

Figure 8.3-Apple Production -In Figure 8.3,the 7th worker will:

The marginal revenue product sets a lower limit on the wage rate an employer will pay.

The equilibrium level of employment is determined by:

What do government imposed price floors not cause?

An upward-sloping supply curve of labor illustrates that the:

Figure 8.3-Apple Production -In Figure 8.3,the 5th worker will:

If the government decides to raise the minimum wage,ceteris paribus:

The law of diminishing returns states that,ceteris paribus,the MPP of labor declines as:

If consumers want to increase the wages and the number of jobs for strawberry pickers they should:

At the equilibrium wage,the quantity demanded of labor equals the quantity supplied.

The demand for labor is a derived demand because:

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

Monopoly

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Figure 8.3-Apple Production -In Figure 8.3,the 7^th worker will:

Figure 8.3-Apple Production -In Figure 8.3,the 5^th worker will: