Question 1

A decrease in the amount of human capital acquired by workers will lead to a decrease in the supply of labour.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following variables will not cause the market supply curve of labour to shift?

Accepted Answer

A)  Increases in population 
B)  A favourable change in consumer tastes 
C)  A change in the labour participation rate of women 
D)  An increase in the number of people between the ages of 16 and 65 
A)  Increases in population 
B)  A favourable change in consumer tastes 
C)  A change in the labour participation rate of women 
D)  An increase in the number of people between the ages of 16 and 65

Question 3

Higher wages that compensate workers for unpleasant aspects of a job are called compensating differentials.

Accepted Answer

A) True 
 B)False

Question 4

A firm's demand for labour curve is also called its

Accepted Answer

A)  marginal revenue product of labour curve. 
B)  marginal factor cost of labour curve. 
C)  marginal valuation curve. 
D)  marginal benefit of labour curve. 
A)  marginal revenue product of labour curve. 
B)  marginal factor cost of labour curve. 
C)  marginal valuation curve. 
D)  marginal benefit of labour curve.

Question 5

Suppose the government grants child care subsidies to mothers entering the labour force.What is likely to happen to the equilibrium wage and quantity of labour?

Accepted Answer

A)  The equilibrium wage and the equilibrium quantity of labour rise. 
B)  The equilibrium wage and the equilibrium quantity of labour fall. 
C)  The equilibrium wage falls and the equilibrium quantity of labour rises. 
D)  The equilibrium wage rises and the equilibrium quantity of labour falls. 
A)  The equilibrium wage and the equilibrium quantity of labour rise. 
B)  The equilibrium wage and the equilibrium quantity of labour fall. 
C)  The equilibrium wage falls and the equilibrium quantity of labour rises. 
D)  The equilibrium wage rises and the equilibrium quantity of labour falls.

Question 6

Serafina was earning $75 per hour and working 50 hours per week.Serafina's wage rose to $90 per hour and,as a result,she now works 60 hours per week.What can you conclude from this information about the income effect and the substitution effect of a wage change for Serafina?

Accepted Answer

We can conclude that Serafina's substitu

Question 7

If a firm is the sole employer of a factor of production,it is known as

Accepted Answer

A)  a monopoly. 
B)  a competitor. 
C)  a monopsony. 
D)  an economically discriminating firm. 
A)  a monopoly. 
B)  a competitor. 
C)  a monopsony. 
D)  an economically discriminating firm.

Question 8

According to the marginal productivity theory of income,

Accepted Answer

A)  the greater the quantity of resources owned by an individual, the greater his incentive to increase productivity and his income. 
B)  the average income received by an individual who supplies resources is influenced by the resources owner's marginal productivity. 
C)  the income received by an individual who supplies labour services equals the incremental benefit generated to the firm by that individual's labour. 
D)  the income received by an individual who supplies labour services equals the profit generated to the firm by that individual's labour. 
A)  the greater the quantity of resources owned by an individual, the greater his incentive to increase productivity and his income. 
B)  the average income received by an individual who supplies resources is influenced by the resources owner's marginal productivity. 
C)  the income received by an individual who supplies labour services equals the incremental benefit generated to the firm by that individual's labour. 
D)  the income received by an individual who supplies labour services equals the profit generated to the firm by that individual's labour.

Question 9

A firm's labour demand curve is also its marginal revenue product curve.For both the perfectly competitive firm and the output price maker,the labour demand curve slopes downwards.However,there is a difference in the reasons why the labour demand curve slopes downwards.What is this difference?

Accepted Answer

A perfectly competitive firm can sell al

Question 10

Some superstar athletes in the sports industry earn very high levels of income relative to other occupations,and over time the wage differential has been increasing.What could have caused this?

Accepted Answer

A)  The supply of star athletes has decreased. 
B)  The supply of star athletes has increased due to university athletic programs. 
C)  Technological advances such as cable television has increased the demand for sports entertainment. 
D)  The market power of athletes' unions has increased. 
A)  The supply of star athletes has decreased. 
B)  The supply of star athletes has increased due to university athletic programs. 
C)  Technological advances such as cable television has increased the demand for sports entertainment. 
D)  The market power of athletes' unions has increased.

Question 11

The demand for labour is different from the demand for final goods and services because

Accepted Answer

A)  the demand for labour is derived from the demand for the good or service the labour is used to produce. 
B)  it is a demand for people, not inanimate objects. 
C)  the demand for labour is more inelastic than the demand for the goods and services produced with this labour. 
D)  the law of demand does not apply to the demand for labour. 
A)  the demand for labour is derived from the demand for the good or service the labour is used to produce. 
B)  it is a demand for people, not inanimate objects. 
C)  the demand for labour is more inelastic than the demand for the goods and services produced with this labour. 
D)  the law of demand does not apply to the demand for labour.

Question 12

The price of a financial asset should be equal to

Accepted Answer

A)  the face value of the asset. 
B)  the present value of the sum of the coupon payments and the interest rate. 
C)  the face value of the asset divided by the interest rate. 
D)  the present value of payments to be received from owning that asset. 
A)  the face value of the asset. 
B)  the present value of the sum of the coupon payments and the interest rate. 
C)  the face value of the asset divided by the interest rate. 
D)  the present value of payments to be received from owning that asset.

Question 13

Wage differences among workers of different races and gender could be due to all of the following except

Accepted Answer

A)  differences in preferences for jobs. 
B)  differences in work experience. 
C)  differences in education. 
D)  labour unions. 
A)  differences in preferences for jobs. 
B)  differences in work experience. 
C)  differences in education. 
D)  labour unions.

Question 14

The benefit to the firm from hiring one additional worker is called the

Accepted Answer

A)  marginal revenue product of labour. 
B)  marginal revenue. 
C)  marginal profit. 
D)  total revenue. 
A)  marginal revenue product of labour. 
B)  marginal revenue. 
C)  marginal profit. 
D)  total revenue.

Question 15

Holding the price of a firm's output constant,if the marginal product of labour increases

Accepted Answer

A)  the marginal revenue product of labour decreases. 
B)  the marginal revenue product of labour also increases. 
C)  the marginal products of other inputs also increase. 
D)  the marginal revenue product of labour may increase or decrease. 
A)  the marginal revenue product of labour decreases. 
B)  the marginal revenue product of labour also increases. 
C)  the marginal products of other inputs also increase. 
D)  the marginal revenue product of labour may increase or decrease.

Question 16

The marginal product of labour curve is the demand curve for labour.

Accepted Answer

A) True 
 B)False

Question 17

Consider the market for pilots.What is likely to happen to the equilibrium wage and quantity of pilots if the government enforces a lower mandatory retirement age,say from age 65 to age 62?

Accepted Answer

A)  The equilibrium wage and the equilibrium quantity of pilots rise. 
B)  The equilibrium wage and the equilibrium quantity of pilots fall. 
C)  The equilibrium wage falls and the equilibrium quantity of pilots rises. 
D)  The equilibrium wage rises and the equilibrium quantity of pilots falls. 
A)  The equilibrium wage and the equilibrium quantity of pilots rise. 
B)  The equilibrium wage and the equilibrium quantity of pilots fall. 
C)  The equilibrium wage falls and the equilibrium quantity of pilots rises. 
D)  The equilibrium wage rises and the equilibrium quantity of pilots falls.

Question 18

The market supply curve for labour is

Accepted Answer

A)  derived from the market supply curve for the output produced with labour. 
B)  perfectly inelastic if leisure is an inferior good. 
C)  determined by adding up the quantity of labour supplied by each worker at each wage, holding constant all other variables that affect the willingness of workers to supply labour. 
D)  determined by adding up the wages each worker is willing to work for at a given quantity supplied, holding constant all other variables that affect the willingness of workers to supply labour. 
A)  derived from the market supply curve for the output produced with labour. 
B)  perfectly inelastic if leisure is an inferior good. 
C)  determined by adding up the quantity of labour supplied by each worker at each wage, holding constant all other variables that affect the willingness of workers to supply labour. 
D)  determined by adding up the wages each worker is willing to work for at a given quantity supplied, holding constant all other variables that affect the willingness of workers to supply labour.

Question 19

A firm's primary interest when it hires an additional worker is

Accepted Answer

A)  the cost of hiring the additional worker. 
B)  how the average output of the firm will be affected by this new worker. 
C)  the extra revenue the firm realises from hiring that worker. 
D)  whether or not the new worker gets along with the firm's existing workers. 
A)  the cost of hiring the additional worker. 
B)  how the average output of the firm will be affected by this new worker. 
C)  the extra revenue the firm realises from hiring that worker. 
D)  whether or not the new worker gets along with the firm's existing workers.

Question 20

Which of the following statements about commission systems of compensation is false?

Accepted Answer

A)  They increase the risk to workers because sometimes output declines for reasons not connected to the worker's effort. 
B)  During sluggish periods, an employer's payroll expenses will decline along with sales. 
C)  If workers are paid on the basis of the number of units produced, they may become less concerned about quality. 
D)  The lack of income stability will induce the more productive workers to leave in search of more secure employment. 
A)  They increase the risk to workers because sometimes output declines for reasons not connected to the worker's effort. 
B)  During sluggish periods, an employer's payroll expenses will decline along with sales. 
C)  If workers are paid on the basis of the number of units produced, they may become less concerned about quality. 
D)  The lack of income stability will induce the more productive workers to leave in search of more secure employment.

A decrease in the amount of human capital acquired by workers will lead to a decrease in the supply of labour.

Which of the following variables will not cause the market supply curve of labour to shift?

Higher wages that compensate workers for unpleasant aspects of a job are called compensating differentials.

A firm's demand for labour curve is also called its

Suppose the government grants child care subsidies to mothers entering the labour force.What is likely to happen to the equilibrium wage and quantity of labour?

Serafina was earning $75 per hour and working 50 hours per week.Serafina's wage rose to $90 per hour and,as a result,she now works 60 hours per week.What can you conclude from this information about the income effect and the substitution effect of a wage change for Serafina?

If a firm is the sole employer of a factor of production,it is known as

According to the marginal productivity theory of income,

A firm's labour demand curve is also its marginal revenue product curve.For both the perfectly competitive firm and the output price maker,the labour demand curve slopes downwards.However,there is a difference in the reasons why the labour demand curve slopes downwards.What is this difference?

Some superstar athletes in the sports industry earn very high levels of income relative to other occupations,and over time the wage differential has been increasing.What could have caused this?

The demand for labour is different from the demand for final goods and services because

The price of a financial asset should be equal to

Wage differences among workers of different races and gender could be due to all of the following except

The benefit to the firm from hiring one additional worker is called the

Holding the price of a firm's output constant,if the marginal product of labour increases

The marginal product of labour curve is the demand curve for labour.

Consider the market for pilots.What is likely to happen to the equilibrium wage and quantity of pilots if the government enforces a lower mandatory retirement age,say from age 65 to age 62?

The market supply curve for labour is

A firm's primary interest when it hires an additional worker is

Which of the following statements about commission systems of compensation is false?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

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Exam 10: Monopoly and Antitrust

A decrease in the amount of human capital acquired by workers will lead to a decrease in the supply of labour.

Which of the following variables will not cause the market supply curve of labour to shift?

Higher wages that compensate workers for unpleasant aspects of a job are called compensating differentials.

A firm's demand for labour curve is also called its

Suppose the government grants child care subsidies to mothers entering the labour force.What is likely to happen to the equilibrium wage and quantity of labour?

Serafina was earning $75 per hour and working 50 hours per week.Serafina's wage rose to $90 per hour and,as a result,she now works 60 hours per week.What can you conclude from this information about the income effect and the substitution effect of a wage change for Serafina?

If a firm is the sole employer of a factor of production,it is known as

According to the marginal productivity theory of income,

A firm's labour demand curve is also its marginal revenue product curve.For both the perfectly competitive firm and the output price maker,the labour demand curve slopes downwards.However,there is a difference in the reasons why the labour demand curve slopes downwards.What is this difference?

Some superstar athletes in the sports industry earn very high levels of income relative to other occupations,and over time the wage differential has been increasing.What could have caused this?

The demand for labour is different from the demand for final goods and services because

The price of a financial asset should be equal to

Wage differences among workers of different races and gender could be due to all of the following except

The benefit to the firm from hiring one additional worker is called the

Holding the price of a firm's output constant,if the marginal product of labour increases

The marginal product of labour curve is the demand curve for labour.

Consider the market for pilots.What is likely to happen to the equilibrium wage and quantity of pilots if the government enforces a lower mandatory retirement age,say from age 65 to age 62?

The market supply curve for labour is

A firm's primary interest when it hires an additional worker is

Which of the following statements about commission systems of compensation is false?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Healthcare

Firms,the Stock Market,and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters