Question 1

Figure 8.2-Apple Production  
-In Figure 8.2,the equilibrium wage rate is ____ and the number of unemployed workers is ____.

Accepted Answer

A)  W1;0 
B)  W1;1350 
C)  W2;0 
D)  W2;1350 
A)  W1;0 
B)  W1;1350 
C)  W2;0 
D)  W2;1350

Question 2

An increase in the wage rate will always cause more labor to be supplied.

Accepted Answer

A) True 
 B)False

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,what is the marginal revenue product of the 2nd apple picker?

Accepted Answer

A)  $6. 
B)  $10. 
C)  $24. 
D)  $40. 
A)  $6. 
B)  $10. 
C)  $24. 
D)  $40.

Question 4

Figure 8.3-Apple Production  
-In Figure 8.3,for the 7th through the 10th worker:

Accepted Answer

A)  MRP is greater than or equal to the equilibrium wage rate and these workers will be hired. 
B)  MRP is less than the equilibrium wage rate and these workers will not be hired. 
C)  MPP is greater than the equilibrium wage rate and these workers will be hired. 
D)  The equilibrium wage rate is too high and the firm does not accept the wage. 
A)  MRP is greater than or equal to the equilibrium wage rate and these workers will be hired. 
B)  MRP is less than the equilibrium wage rate and these workers will not be hired. 
C)  MPP is greater than the equilibrium wage rate and these workers will be hired. 
D)  The equilibrium wage rate is too high and the firm does not accept the wage.

Question 5

A minimum wage impacts the labor market by causing:

Accepted Answer

A)  An increase in the quantity of labor supplied and a decrease in the quantity of labor demanded. 
B)  A decrease in both the quantity of labor supplied and the quantity of labor demanded. 
C)  An increase in both the quantity of labor supplied and the quantity of labor demanded. 
D)  A decrease in the quantity of labor supplied and an increase in the quantity of labor demanded. 
A)  An increase in the quantity of labor supplied and a decrease in the quantity of labor demanded. 
B)  A decrease in both the quantity of labor supplied and the quantity of labor demanded. 
C)  An increase in both the quantity of labor supplied and the quantity of labor demanded. 
D)  A decrease in the quantity of labor supplied and an increase in the quantity of labor demanded.

Question 6

If the MPP of the last worker hired is 3 units per hour,product price is constant at $5 per unit,and the wage rate is $18 per hour,then:

Accepted Answer

A)  The last worker hired is profitable for the firm. 
B)  The employer should raise wages and hire more workers. 
C)  The last worker hired should not be employed because she costs more than she is worth. 
D)  In order to earn a profit,the price of the product must decrease. 
A)  The last worker hired is profitable for the firm. 
B)  The employer should raise wages and hire more workers. 
C)  The last worker hired should not be employed because she costs more than she is worth. 
D)  In order to earn a profit,the price of the product must decrease.

Question 7

At higher wage rates,less labor is supplied.

Accepted Answer

A) True 
 B)False

Question 8

The equilibrium wage will definitely rise 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)  Demand for labor increases and the supply of labor is constant. 
D)  Both the supply of labor and the demand for labor increase. 
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)  Demand for labor increases and the supply of labor is constant. 
D)  Both the supply of labor and the demand for labor increase.

Question 9

Figure 8.2-Apple Production  
-In Figure 8.2,at a wage of W2 there is a:

Accepted Answer

A)  Surplus of labor equal to 450 workers. 
B)  Surplus of labor equal to 1050 workers. 
C)  Shortage of labor equal to 1050 workers. 
D)  Shortage of labor equal to 600 workers. 
A)  Surplus of labor equal to 450 workers. 
B)  Surplus of labor equal to 1050 workers. 
C)  Shortage of labor equal to 1050 workers. 
D)  Shortage of labor equal to 600 workers.

Question 10

Which of the following will increase the market demand for labor,ceteris paribus?

Accepted Answer

A)  A decrease in the price of output produced by labor. 
B)  An increase in the productivity of labor. 
C)  An increase in the wage paid to labor. 
D)  A decrease in the number of available workers. 
A)  A decrease in the price of output produced by labor. 
B)  An increase in the productivity of labor. 
C)  An increase in the wage paid to labor. 
D)  A decrease in the number of available workers.

Question 11

Marginal _____ product sets _____ dollar limit on the wage rate an employer will pay.

Accepted Answer

A)  Physical;an upper 
B)  Physical;a lower 
C)  Revenue;an upper 
D)  Revenue;a lower 
A)  Physical;an upper 
B)  Physical;a lower 
C)  Revenue;an upper 
D)  Revenue;a lower

Question 12

In a competitive labor market,at wages above equilibrium,the:

Accepted Answer

A)  Quantity supplied of labor is greater than the quantity demanded. 
B)  Labor-supply curve will shift to the left. 
C)  Quantity demanded of labor is greater than the quantity supplied. 
D)  MRP of labor curve shifts to the right. 
A)  Quantity supplied of labor is greater than the quantity demanded. 
B)  Labor-supply curve will shift to the left. 
C)  Quantity demanded of labor is greater than the quantity supplied. 
D)  MRP of labor curve shifts to the right.

Question 13

Ceteris paribus,if the cost of daycare increases causing some workers to leave the labor market and stay home with their children:

Accepted Answer

A)  There is movement up the labor supply curve. 
B)  There is movement down the labor supply curve. 
C)  The labor supply curve shifts to the right. 
D)  The labor supply curve shifts to the left. 
A)  There is movement up the labor supply curve. 
B)  There is movement down the labor supply curve. 
C)  The labor supply curve shifts to the right. 
D)  The labor supply curve shifts to the left.

Question 14

The marginal product of additional units of labor eventually diminishes because,ceteris paribus:

Accepted Answer

A)  Additional labor is usually less skilled and less experienced. 
B)  The law of diminishing marginal utility is a factor. 
C)  Additional labor has fewer fixed factors of production to work with. 
D)  Laborers are lazy. 
A)  Additional labor is usually less skilled and less experienced. 
B)  The law of diminishing marginal utility is a factor. 
C)  Additional labor has fewer fixed factors of production to work with. 
D)  Laborers are lazy.

Question 15

Since people are paid wages to work,the opportunity cost of working is zero.

Accepted Answer

A) True 
 B)False

Question 16

One of the determinants of the market supply of labor is the number of workers in the labor market.

Accepted Answer

A) True 
 B)False

Question 17

Both wages and employment can increase at the same time as long as the:

Accepted Answer

A)  Marginal physical product of labor decreases. 
B)  Number of available workers increases. 
C)  The price of the product being produced decreases. 
D)  Marginal revenue product of labor increases. 
A)  Marginal physical product of labor decreases. 
B)  Number of available workers increases. 
C)  The price of the product being produced decreases. 
D)  Marginal revenue product of labor increases.

Question 18

As a person works more hours and leisure time declines,the opportunity cost of labor _____ and the marginal utility of income _____.

Accepted Answer

A)  Falls;falls 
B)  Falls;rises 
C)  Rises;falls 
D)  Rises;rises 
A)  Falls;falls 
B)  Falls;rises 
C)  Rises;falls 
D)  Rises;rises

Question 19

Ceteris paribus,for an upward-sloping labor supply curve,there is an increase in the quantity of labor supplied when the:

Accepted Answer

A)  Demand for labor increases. 
B)  Amount of leisure time increases. 
C)  Tax rate increases. 
D)  Wage rate increases. 
A)  Demand for labor increases. 
B)  Amount of leisure time increases. 
C)  Tax rate increases. 
D)  Wage rate increases.

Question 20

The impact on the labor market due to an increase in the minimum wage:

Accepted Answer

A)  Is significant since it increases employment. 
B)  Cannot be measured unless the increase is more than $1. 
C)  Depends on factors such as the size of the increase and the state of the economy. 
D)  Is significant since it reduces unemployment. 
A)  Is significant since it increases employment. 
B)  Cannot be measured unless the increase is more than $1. 
C)  Depends on factors such as the size of the increase and the state of the economy. 
D)  Is significant since it reduces unemployment.

Figure 8.2-Apple Production -In Figure 8.2,the equilibrium wage rate is and the number of unemployed workers is .

An increase in the wage rate will always cause more labor to be supplied.

Figure 8.3-Apple Production -In Figure 8.3,for the 7^th through the 10^th worker:

A minimum wage impacts the labor market by causing:

If the MPP of the last worker hired is 3 units per hour,product price is constant at $5 per unit,and the wage rate is $18 per hour,then:

At higher wage rates,less labor is supplied.

The equilibrium wage will definitely rise if:

Figure 8.2-Apple Production -In Figure 8.2,at a wage of W₂ there is a:

Which of the following will increase the market demand for labor,ceteris paribus?

Marginal _ product sets _ dollar limit on the wage rate an employer will pay.

In a competitive labor market,at wages above equilibrium,the:

Ceteris paribus,if the cost of daycare increases causing some workers to leave the labor market and stay home with their children:

The marginal product of additional units of labor eventually diminishes because,ceteris paribus:

Since people are paid wages to work,the opportunity cost of working is zero.

One of the determinants of the market supply of labor is the number of workers in the labor market.

Both wages and employment can increase at the same time as long as the:

As a person works more hours and leisure time declines,the opportunity cost of labor _ and the marginal utility of income _.

Ceteris paribus,for an upward-sloping labor supply curve,there is an increase in the quantity of labor supplied when the:

The impact on the labor market due to an increase in the minimum wage:

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

Figure 8.2-Apple Production -In Figure 8.2,the equilibrium wage rate is ____ and the number of unemployed workers is ____.

An increase in the wage rate will always cause more labor to be supplied.

Figure 8.3-Apple Production -In Figure 8.3,for the 7th through the 10th worker:

A minimum wage impacts the labor market by causing:

If the MPP of the last worker hired is 3 units per hour,product price is constant at $5 per unit,and the wage rate is $18 per hour,then:

At higher wage rates,less labor is supplied.

The equilibrium wage will definitely rise if:

Figure 8.2-Apple Production -In Figure 8.2,at a wage of W2 there is a:

Which of the following will increase the market demand for labor,ceteris paribus?

Marginal _____ product sets _____ dollar limit on the wage rate an employer will pay.

In a competitive labor market,at wages above equilibrium,the:

Ceteris paribus,if the cost of daycare increases causing some workers to leave the labor market and stay home with their children:

The marginal product of additional units of labor eventually diminishes because,ceteris paribus:

Since people are paid wages to work,the opportunity cost of working is zero.

One of the determinants of the market supply of labor is the number of workers in the labor market.

Both wages and employment can increase at the same time as long as the:

As a person works more hours and leisure time declines,the opportunity cost of labor _____ and the marginal utility of income _____.

Ceteris paribus,for an upward-sloping labor supply curve,there is an increase in the quantity of labor supplied when the:

The impact on the labor market due to an increase in the minimum wage:

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 8.2-Apple Production -In Figure 8.2,the equilibrium wage rate is and the number of unemployed workers is .

Figure 8.3-Apple Production -In Figure 8.3,for the 7^th through the 10^th worker:

Figure 8.2-Apple Production -In Figure 8.2,at a wage of W₂ there is a:

Marginal _ product sets _ dollar limit on the wage rate an employer will pay.

As a person works more hours and leisure time declines,the opportunity cost of labor _ and the marginal utility of income _.