Question 1

Which of the following is a reason why workers typically require higher wages in order to work additional hours?

Accepted Answer

A)  The decreasing opportunity cost of labor. 
B)  The decreasing value of leisure time that is given up. 
C)  The diminishing marginal utility of additional income. 
D)  The diminishing marginal revenue product of labor. 
A)  The decreasing opportunity cost of labor. 
B)  The decreasing value of leisure time that is given up. 
C)  The diminishing marginal utility of additional income. 
D)  The diminishing marginal revenue product of labor.

Question 2

A firm should continue to hire workers until the:

Accepted Answer

A)  MRP is equal to demand. 
B)  MPP is equal to the number of workers hired. 
C)  MRP is equal to the market wage rate. 
D)  MRP is equal to zero. 
A)  MRP is equal to demand. 
B)  MPP is equal to the number of workers hired. 
C)  MRP is equal to the market wage rate. 
D)  MRP is equal to zero.

Question 3

The labor demand curve is downward sloping because:

Accepted Answer

A)  Each individual worker tends to be more valuable as more workers are hired. 
B)  Each individual worker tends to be less valuable as more workers are hired. 
C)  Marginal physical product increases as more workers are hired. 
D)  The amount of available labor declines as the wage rate declines. 
A)  Each individual worker tends to be more valuable as more workers are hired. 
B)  Each individual worker tends to be less valuable as more workers are hired. 
C)  Marginal physical product increases as more workers are hired. 
D)  The amount of available labor declines as the wage rate declines.

Question 4

An increase in the labor productivity is best illustrated by:

Accepted Answer

A)  An upward shift of the MRP curve. 
B)  A downward shift of the MPP curve. 
C)  A leftward shift of the labor-supply curve. 
D)  A rightward shift of the labor-supply curve. 
A)  An upward shift of the MRP curve. 
B)  A downward shift of the MPP curve. 
C)  A leftward shift of the labor-supply curve. 
D)  A rightward shift of the labor-supply curve.

Question 5

Marginal physical product increases as more workers are hired.

Accepted Answer

A) True 
 B)False

Question 6

MRP for a perfectly competitive firm is equal to:

Accepted Answer

A)  MPP times the wage rate. 
B)  MPP divided by the wage rate. 
C)  MPP divided by marginal revenue. 
D)  MPP times the price of the product. 
A)  MPP times the wage rate. 
B)  MPP divided by the wage rate. 
C)  MPP divided by marginal revenue. 
D)  MPP times the price of the product.

Question 7

Figure 8.1-Apple Production  
-In Figure 8.1,the equilibrium wage rate is:

Accepted Answer

A)  $12 per hour. 
B)  $16 per hour. 
C)  $20 per hour. 
D)  $24 per hour. 
A)  $12 per hour. 
B)  $16 per hour. 
C)  $20 per hour. 
D)  $24 per hour.

Question 8

Figure 8.2-Apple Production  
-Refer to Figure 8.2.The number of workers employed in this market at a wage rate of W2 is:

Accepted Answer

A)  1950 workers. 
B)  1350 workers. 
C)  1050 workers. 
D)  900 workers. 
A)  1950 workers. 
B)  1350 workers. 
C)  1050 workers. 
D)  900 workers.

Question 9

The opportunity cost of working is the:

Accepted Answer

A)  Wage rate. 
B)  Value of leisure time that must be given up. 
C)  Expense of maintaining a household and maintaining a decent living. 
D)  Amount of consumption that is made possible. 
A)  Wage rate. 
B)  Value of leisure time that must be given up. 
C)  Expense of maintaining a household and maintaining a decent living. 
D)  Amount of consumption that is made possible.

Question 10

What would we expect to occur to the wage rate and number of persons hired if they workers formed a union?

Accepted Answer

We would expect the wage rate to go up a

Question 11

The quantity of labor supplied:

Accepted Answer

A)  Is downward sloping. 
B)  Increases as the wage rate decreases. 
C)  Increases as the wage rate increases. 
D)  Is influenced by labor demand. 
A)  Is downward sloping. 
B)  Increases as the wage rate decreases. 
C)  Increases as the wage rate increases. 
D)  Is influenced by labor demand.

Question 12

One News Wire article in the text reports the effects of the minimum wage.From an economic perspective,a minimum wage is:

Accepted Answer

A)  An equilibrium wage. 
B)  A price ceiling. 
C)  A price floor. 
D)  The only effective means for rewarding workers' efforts. 
A)  An equilibrium wage. 
B)  A price ceiling. 
C)  A price floor. 
D)  The only effective means for rewarding workers' efforts.

Question 13

A minimum wage reduces the quantity of labor demanded and increases the quantity of labor supplied.

Accepted Answer

A) True 
 B)False

Question 14

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 $24 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 15

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.Demand increases for the product that labor produces.

Accepted Answer

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

Question 16

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.The number of employers decreases.

Accepted Answer

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

Question 17

Figure 8.2-Apple Production  
-Refer to Figure 8.2.A minimum wage of W2 will result in a surplus of ____ workers.

Accepted Answer

A)  1950 
B)  1350 
C)  1050 
D)  900 
A)  1950 
B)  1350 
C)  1050 
D)  900

Question 18

All workers are better off when a minimum wage is imposed.

Accepted Answer

A) True 
 B)False

Question 19

The marginal revenue product of labor curve is the firm's:

Accepted Answer

A)  MPP of labor curve divided by the wage rate. 
B)  Labor demand curve. 
C)  Total revenue curve. 
D)  Labor supply curve. 
A)  MPP of labor curve divided by the wage rate. 
B)  Labor demand curve. 
C)  Total revenue curve. 
D)  Labor supply curve.

Question 20

All else remaining constant,or "ceteris paribus," for an upward-sloping labor supply curve,the quantity of labor supplied varies directly with:

Accepted Answer

A)  Payroll taxes. 
B)  The value of leisure time. 
C)  The derived demand for labor. 
D)  The wage rate. 
A)  Payroll taxes. 
B)  The value of leisure time. 
C)  The derived demand for labor. 
D)  The wage rate.

Which of the following is a reason why workers typically require higher wages in order to work additional hours?

A firm should continue to hire workers until the:

The labor demand curve is downward sloping because:

An increase in the labor productivity is best illustrated by:

Marginal physical product increases as more workers are hired.

MRP for a perfectly competitive firm is equal to:

Figure 8.1-Apple Production -In Figure 8.1,the equilibrium wage rate is:

Figure 8.2-Apple Production -Refer to Figure 8.2.The number of workers employed in this market at a wage rate of W₂ is:

The opportunity cost of working is the:

What would we expect to occur to the wage rate and number of persons hired if they workers formed a union?

The quantity of labor supplied:

One News Wire article in the text reports the effects of the minimum wage.From an economic perspective,a minimum wage is:

A minimum wage reduces the quantity of labor demanded and increases the quantity of labor supplied.

Figure 8.2-Apple Production -Refer to Figure 8.2.A minimum wage of W₂ will result in a surplus of ____ workers.

All workers are better off when a minimum wage is imposed.

The marginal revenue product of labor curve is the firm's:

All else remaining constant,or "ceteris paribus," for an upward-sloping labor supply curve,the quantity of labor supplied varies directly with:

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

Which of the following is a reason why workers typically require higher wages in order to work additional hours?

A firm should continue to hire workers until the:

The labor demand curve is downward sloping because:

An increase in the labor productivity is best illustrated by:

Marginal physical product increases as more workers are hired.

MRP for a perfectly competitive firm is equal to:

Figure 8.1-Apple Production -In Figure 8.1,the equilibrium wage rate is:

Figure 8.2-Apple Production -Refer to Figure 8.2.The number of workers employed in this market at a wage rate of W2 is:

The opportunity cost of working is the:

What would we expect to occur to the wage rate and number of persons hired if they workers formed a union?

The quantity of labor supplied:

One News Wire article in the text reports the effects of the minimum wage.From an economic perspective,a minimum wage is:

A minimum wage reduces the quantity of labor demanded and increases the quantity of labor supplied.

Figure 8.2-Apple Production -Refer to Figure 8.2.A minimum wage of W2 will result in a surplus of ____ workers.

All workers are better off when a minimum wage is imposed.

The marginal revenue product of labor curve is the firm's:

All else remaining constant,or "ceteris paribus," for an upward-sloping labor supply curve,the quantity of labor supplied varies directly with:

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 -Refer to Figure 8.2.The number of workers employed in this market at a wage rate of W₂ is:

Figure 8.2-Apple Production -Refer to Figure 8.2.A minimum wage of W₂ will result in a surplus of ____ workers.