Question 1

The equilibrium quantity of labor will definitely increase if:

Accepted Answer

A)  Demand for labor decreases and the supply of labor is constant. 
B)  Supply of labor increases and the demand for labor is constant. 
C)  Supply of labor decreases and the demand for labor is constant. 
D)  Supply of labor decreases and the demand for labor increases. 
A)  Demand for labor decreases and the supply of labor is constant. 
B)  Supply of labor increases and the demand for labor is constant. 
C)  Supply of labor decreases and the demand for labor is constant. 
D)  Supply of labor decreases and the demand for labor increases.

Question 2

A firm's demand for labor is downward sloping because:

Accepted Answer

A)  Total output decreases as more workers are hired. 
B)  The firm must raise wages to hire more workers. 
C)  The marginal physical product of labor decreases as more labor is hired. 
D)  The price of the product declines as the firm produces and sells more. 
A)  Total output decreases as more workers are hired. 
B)  The firm must raise wages to hire more workers. 
C)  The marginal physical product of labor decreases as more labor is hired. 
D)  The price of the product declines as the firm produces and sells more.

Question 3

The following table shows how apple output changes as additional apple pickers are hired.Calculate marginal physical product,total revenue,and marginal revenue product.The price of apples is $4 per basket.
Table 8.1-Apple Production  
-In Table 8.1,if the price of apples increases to $6 per basket and the equilibrium wage is $30 per day,how many apple pickers will the firm hire?

Accepted Answer

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

Question 4

In order to maintain an above-equilibrium wage for its members,a union must exclude some workers.

Accepted Answer

A) True 
 B)False

Question 5

The demand for labor is downward sloping because of:

Accepted Answer

A)  Diminishing marginal returns to labor. 
B)  Rising marginal physical product. 
C)  Falling marginal cost. 
D)  Rising price. 
A)  Diminishing marginal returns to labor. 
B)  Rising marginal physical product. 
C)  Falling marginal cost. 
D)  Rising price.

Question 6

Figure 8.1-Apple Production  
-In Figure 8.1,unemployed labor at the equilibrium wage is equal to:

Accepted Answer

A)  Zero workers. 
B)  40 workers. 
C)  68 workers. 
D)  116 workers. 
A)  Zero workers. 
B)  40 workers. 
C)  68 workers. 
D)  116 workers.

Question 7

The market supply of labor:

Accepted Answer

A)  Is a horizontal line. 
B)  Refers to the amount of labor businesses hire at various wages. 
C)  Shifts to the right when more workers enter the labor market. 
D)  Shifts to the right when wages decrease. 
A)  Is a horizontal line. 
B)  Refers to the amount of labor businesses hire at various wages. 
C)  Shifts to the right when more workers enter the labor market. 
D)  Shifts to the right when wages decrease.

Question 8

An individual's labor-supply curve reveals how he or she chooses to allocate:

Accepted Answer

A)  Limited dollars between luxuries and necessities. 
B)  Scarce money between goods and services. 
C)  Scarce time between labor and leisure. 
D)  Limited time between work at one job and work at another. 
A)  Limited dollars between luxuries and necessities. 
B)  Scarce money between goods and services. 
C)  Scarce time between labor and leisure. 
D)  Limited time between work at one job and work at another.

Question 9

When people are standing in line for jobs and there are more applicants than jobs,then the job market is characterized by a:

Accepted Answer

A)  Shortage of jobs from the point of view of the buyer in the labor market. 
B)  Surplus of jobs from the point of view of the seller in the labor market. 
C)  Shortage of labor. 
D)  Surplus of labor. 
A)  Shortage of jobs from the point of view of the buyer in the labor market. 
B)  Surplus of jobs from the point of view of the seller in the labor market. 
C)  Shortage of labor. 
D)  Surplus of labor.

Question 10

Figure 8.1-Apple Production  
-In Figure 8.1,at equilibrium,the wage rate is ____ per hour and ____ workers are employed.

Accepted Answer

A)  $12;68 
B)  $12;40 
C)  $16;68 
D)  $16;96 
A)  $12;68 
B)  $12;40 
C)  $16;68 
D)  $16;96

Question 11

The market equilibrium wage occurs where:

Accepted Answer

A)  Demand intersects the marginal cost curve. 
B)  Marginal physical product equals marginal revenue product. 
C)  All workers and all employers are satisfied with the wage. 
D)  Market demand for labor intersects the market supply of labor. 
A)  Demand intersects the marginal cost curve. 
B)  Marginal physical product equals marginal revenue product. 
C)  All workers and all employers are satisfied with the wage. 
D)  Market demand for labor intersects the market supply of labor.

Question 12

The following table shows how apple output changes as additional apple pickers are hired.Calculate marginal physical product,total revenue,and marginal revenue product.The price of apples is $4 per basket.
Table 8.1-Apple Production  
-In Table 8.1,if the equilibrium wage is $20 per day,how many apple pickers will the firm hire?

Accepted Answer

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

Question 13

The labor demand curve slopes _____ to the right,which means that quantity of labor demanded will increase as the wage rate _____.

Accepted Answer

A)  Upward;falls 
B)  Upward;increases 
C)  Downward;falls 
D)  Downward;increases 
A)  Upward;falls 
B)  Upward;increases 
C)  Downward;falls 
D)  Downward;increases

Question 14

A producer in a competitive labor market will continue hiring workers until the MRP for the last worker hired equals the market wage rate.

Accepted Answer

A) True 
 B)False

Question 15

The market supply curve for labor is upward sloping and the market demand curve for labor is downward sloping yet for a single firm the demand curve is flat.Explain.

Accepted Answer

Since a single firm in a compe

Question 16

When the minimum wage is established above the equilibrium wage,then:

Accepted Answer

A)  Shortages of jobs result,since sellers move down the labor-supply curve. 
B)  Surpluses of jobs result,since sellers move up the labor-supply curve. 
C)  Shortages of labor result,since buyers move down the labor-demand curve. 
D)  Surpluses of labor result,since buyers move up the labor-demand curve. 
A)  Shortages of jobs result,since sellers move down the labor-supply curve. 
B)  Surpluses of jobs result,since sellers move up the labor-supply curve. 
C)  Shortages of labor result,since buyers move down the labor-demand curve. 
D)  Surpluses of labor result,since buyers move up the labor-demand curve.

Question 17

Figure 8.1-Apple Production  
-In Figure 8.1,a minimum wage of $20 will result in a:

Accepted Answer

A)  Surplus of 56 workers. 
B)  Shortage of 56 workers. 
C)  Surplus of 28 workers. 
D)  Shortage of 28 workers. 
A)  Surplus of 56 workers. 
B)  Shortage of 56 workers. 
C)  Surplus of 28 workers. 
D)  Shortage of 28 workers.

Question 18

Work may not seem appealing because of the opportunity cost it creates,which is the:

Accepted Answer

A)  Leisure time that must be given up in order to work. 
B)  Wages that the worker must give up by not working. 
C)  Financial cost to the worker of driving to work,parking,buying lunch,etc. 
D)  Amount of utility the worker receives when working. 
A)  Leisure time that must be given up in order to work. 
B)  Wages that the worker must give up by not working. 
C)  Financial cost to the worker of driving to work,parking,buying lunch,etc. 
D)  Amount of utility the worker receives when working.

Question 19

Ceteris paribus,the willingness and ability to work specific amounts of time at alternative wage rates in a given period of time is:

Accepted Answer

A)  Product supply. 
B)  Product demand. 
C)  Labor supply. 
D)  Labor demand. 
A)  Product supply. 
B)  Product demand. 
C)  Labor supply. 
D)  Labor demand.

Question 20

The MRP curve is the labor supply curve for the firm.

Accepted Answer

A) True 
 B)False

The equilibrium quantity of labor will definitely increase if:

A firm's demand for labor is downward sloping because:

In order to maintain an above-equilibrium wage for its members,a union must exclude some workers.

The demand for labor is downward sloping because of:

Figure 8.1-Apple Production -In Figure 8.1,unemployed labor at the equilibrium wage is equal to:

The market supply of labor:

An individual's labor-supply curve reveals how he or she chooses to allocate:

When people are standing in line for jobs and there are more applicants than jobs,then the job market is characterized by a:

Figure 8.1-Apple Production -In Figure 8.1,at equilibrium,the wage rate is per hour and workers are employed.

The market equilibrium wage occurs where:

The labor demand curve slopes _ to the right,which means that quantity of labor demanded will increase as the wage rate _.

A producer in a competitive labor market will continue hiring workers until the MRP for the last worker hired equals the market wage rate.

The market supply curve for labor is upward sloping and the market demand curve for labor is downward sloping yet for a single firm the demand curve is flat.Explain.

When the minimum wage is established above the equilibrium wage,then:

Figure 8.1-Apple Production -In Figure 8.1,a minimum wage of $20 will result in a:

Work may not seem appealing because of the opportunity cost it creates,which is the:

Ceteris paribus,the willingness and ability to work specific amounts of time at alternative wage rates in a given period of time is:

The MRP curve is the labor supply curve for the firm.

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

The equilibrium quantity of labor will definitely increase if:

A firm's demand for labor is downward sloping because:

In order to maintain an above-equilibrium wage for its members,a union must exclude some workers.

The demand for labor is downward sloping because of:

Figure 8.1-Apple Production -In Figure 8.1,unemployed labor at the equilibrium wage is equal to:

The market supply of labor:

An individual's labor-supply curve reveals how he or she chooses to allocate:

When people are standing in line for jobs and there are more applicants than jobs,then the job market is characterized by a:

Figure 8.1-Apple Production -In Figure 8.1,at equilibrium,the wage rate is ____ per hour and ____ workers are employed.

The market equilibrium wage occurs where:

The labor demand curve slopes _____ to the right,which means that quantity of labor demanded will increase as the wage rate _____.

A producer in a competitive labor market will continue hiring workers until the MRP for the last worker hired equals the market wage rate.

The market supply curve for labor is upward sloping and the market demand curve for labor is downward sloping yet for a single firm the demand curve is flat.Explain.

When the minimum wage is established above the equilibrium wage,then:

Figure 8.1-Apple Production -In Figure 8.1,a minimum wage of $20 will result in a:

Work may not seem appealing because of the opportunity cost it creates,which is the:

Ceteris paribus,the willingness and ability to work specific amounts of time at alternative wage rates in a given period of time is:

The MRP curve is the labor supply curve for the firm.

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 8.1-Apple Production -In Figure 8.1,at equilibrium,the wage rate is per hour and workers are employed.

The labor demand curve slopes _ to the right,which means that quantity of labor demanded will increase as the wage rate _.