Question 1

If the labour supply is unchanged,an increase in the demand for labour will

Accepted Answer

A)  increase the equilibrium wage and decrease the number of workers employed. 
B)  increase the equilibrium wage and increase the quantity of jobs demanded. 
C)  decrease the equilibrium wage and increase the number of workers employed. 
D)  increase the equilibrium wage and increase the number of workers employed. 
A)  increase the equilibrium wage and decrease the number of workers employed. 
B)  increase the equilibrium wage and increase the quantity of jobs demanded. 
C)  decrease the equilibrium wage and increase the number of workers employed. 
D)  increase the equilibrium wage and increase the number of workers employed.

Question 2

Which of the following summarises the impact of population growth on the labour market?

Accepted Answer

A)  This will increase the labour supply, reduce the equilibrium wage and increase the quantity of labour demanded. 
B)  There will be an increase in the demand for labour. As a result, the wage rate will rise and the quantity of workers supplied will decrease. 
C)  There will be an increase in the demand for jobs. This will result in an increase in the equilibrium wage rate and a movement along the labour supply curve. 
D)  There will be an increase in both the demand for labour and the supply of labour. As a result, the equilibrium wage will not change. 
A)  This will increase the labour supply, reduce the equilibrium wage and increase the quantity of labour demanded. 
B)  There will be an increase in the demand for labour. As a result, the wage rate will rise and the quantity of workers supplied will decrease. 
C)  There will be an increase in the demand for jobs. This will result in an increase in the equilibrium wage rate and a movement along the labour supply curve. 
D)  There will be an increase in both the demand for labour and the supply of labour. As a result, the equilibrium wage will not change.

Question 3

The present value of $475 received 3 years in the future would be calculated as which of the following when the interest rate is 6 per cent?

Accepted Answer

A)  475/(1.6)3 
B)  475/(1.06)3 
C)  475 × 1.6 × 3 
D)  3.06/475 
A)  475/(1.6)3 
B)  475/(1.06)3 
C)  475 × 1.6 × 3 
D)  3.06/475

Question 4

As more output is produced,the marginal product of labour declines

Accepted Answer

A)  because of the law of diminishing returns. 
B)  if firms reduce the wage paid to labour. 
C)  if the firm's output supply curve is inelastic. 
D)  because the firm's marginal revenue declines. 
A)  because of the law of diminishing returns. 
B)  if firms reduce the wage paid to labour. 
C)  if the firm's output supply curve is inelastic. 
D)  because the firm's marginal revenue declines.

Question 5

How much is a bond that pays $20 in coupon payments for 4 years and $1000 at the end of the fourth year worth if the interest rate is 5 per cent?

Accepted Answer

A)  $822.70 
B)  $893.62 
C)  $1070.92 
D)  $1080 
A)  $822.70 
B)  $893.62 
C)  $1070.92 
D)  $1080

Question 6

Which of the following will not cause the labour demand curve to shift to the right?

Accepted Answer

A)  An increase in the price of the firm's product. 
B)  A technological improvement that increases labour productivity. 
C)  An increase in human capital in the labour force. 
D)  An increase in the market wage rate. 
A)  An increase in the price of the firm's product. 
B)  A technological improvement that increases labour productivity. 
C)  An increase in human capital in the labour force. 
D)  An increase in the market wage rate.

Question 7

The value you give today to money you will receive in the future is called the future payment's

Accepted Answer

A)  time-sensitive value. 
B)  future value. 
C)  present value. 
D)  historical value. 
A)  time-sensitive value. 
B)  future value. 
C)  present value. 
D)  historical value.

Question 8

Let MP = marginal product,P = output price,and W = wage,then the equation that represents the condition where a competitive firm would hire another worker is

Accepted Answer

A)  P × MP = W. 
B)  P × MP  W. 
D)  P × W > MP. 
A)  P × MP = W. 
B)  P × MP  W. 
D)  P × W > MP.

Question 9

Table 10-1
  
-Refer to Table 10-1.The marginal product of the fourth unit of labour is

Accepted Answer

A)  300. 
B)  75. 
C)  60. 
D)  15. 
A)  300. 
B)  75. 
C)  60. 
D)  15.

Question 10

Suppose the labour market is in equilibrium.Which of the following statements is false?

Accepted Answer

A)  The equilibrium wage rate is equal to the marginal revenue product of labour. 
B)  At the equilibrium wage, the quantity of labour demanded equals the quantity of labour supplied. 
C)  Some workers will earn more than the equilibrium wage. 
D)  At the equilibrium wage, the demand for labour is equal to the supply of labour. 
A)  The equilibrium wage rate is equal to the marginal revenue product of labour. 
B)  At the equilibrium wage, the quantity of labour demanded equals the quantity of labour supplied. 
C)  Some workers will earn more than the equilibrium wage. 
D)  At the equilibrium wage, the demand for labour is equal to the supply of labour.

Question 11

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If hiring another worker would increase output by three units per hour,then to maximise profits the firm should

Accepted Answer

A)  not change the number of workers it currently hires. 
B)  not hire an additional worker. 
C)  hire another worker. 
D)  There is not enough information to answer the question. 
A)  not change the number of workers it currently hires. 
B)  not hire an additional worker. 
C)  hire another worker. 
D)  There is not enough information to answer the question.

Question 12

Painters who paint water towers earn higher wages relative to painters who paint houses because

Accepted Answer

A)  the demand for tower painters is greater than the demand for residential painters. 
B)  painting water towers is more risky than painting houses. 
C)  the tower painters' union is probably more powerful than the house painters' union. 
D)  the supply of water tower painters exceeds the supply of house painters. 
A)  the demand for tower painters is greater than the demand for residential painters. 
B)  painting water towers is more risky than painting houses. 
C)  the tower painters' union is probably more powerful than the house painters' union. 
D)  the supply of water tower painters exceeds the supply of house painters.

Question 13

If workers in nuclear power plants underestimate the true risk of their jobs

Accepted Answer

A)  employers will pay compensating differentials to compensate employees fully for the risk they have assumed. 
B)  safety legislation will not make workers better off. 
C)  the wages of these workers will not be high enough to compensate them fully for the risk they have assumed. 
D)  the supply of workers in this occupation will exceed demand. 
A)  employers will pay compensating differentials to compensate employees fully for the risk they have assumed. 
B)  safety legislation will not make workers better off. 
C)  the wages of these workers will not be high enough to compensate them fully for the risk they have assumed. 
D)  the supply of workers in this occupation will exceed demand.

Question 14

Table 10-1
  
-Refer to Table 10-1.Suppose the output price is $3.If the firm represented in the table is maximising its profit by hiring six workers,what is the wage rate?

Accepted Answer

A)  $120 
B)  $65 
C)  $40 
D)  There is insufficient information to answer the question. 
A)  $120 
B)  $65 
C)  $40 
D)  There is insufficient information to answer the question.

Question 15

Workers who dislike risk

Accepted Answer

A)  prefer to be paid monthly rather than weekly or daily. 
B)  prefer a piece-rate compensation system to a salary system. 
C)  prefer a salary system to a commission compensation system. 
D)  prefer to be paid a salary rather than a wage. 
A)  prefer to be paid monthly rather than weekly or daily. 
B)  prefer a piece-rate compensation system to a salary system. 
C)  prefer a salary system to a commission compensation system. 
D)  prefer to be paid a salary rather than a wage.

Question 16

Marginal productivity theory implies that in a perfectly competitive market economy,a worker will receive income

Accepted Answer

A)  equal to the value of her marginal contribution to the production process. 
B)  that is greater than the value of her marginal contribution to production process. 
C)  that is less than the value of her marginal contribution to the production process. 
D)  greater than, less than, or equal to the value of her marginal contribution to the production process, depending on her ability to negotiate with employers. 
A)  equal to the value of her marginal contribution to the production process. 
B)  that is greater than the value of her marginal contribution to production process. 
C)  that is less than the value of her marginal contribution to the production process. 
D)  greater than, less than, or equal to the value of her marginal contribution to the production process, depending on her ability to negotiate with employers.

Question 17

The marginal revenue product of capital is

Accepted Answer

A)  the cost to the firm of renting an additional unit of capital. 
B)  the change in the firm's revenue as a result of employing one more unit of capital, such as a machine. 
C)  the economic rent received by hiring an additional unit of capital. 
D)  the revenue generated by substituting capital for labour in the production process. 
A)  the cost to the firm of renting an additional unit of capital. 
B)  the change in the firm's revenue as a result of employing one more unit of capital, such as a machine. 
C)  the economic rent received by hiring an additional unit of capital. 
D)  the revenue generated by substituting capital for labour in the production process.

Question 18

Which of the following is not a reason for firms to choose a salary system rather than a commission system to compensate their employees?

Accepted Answer

A)  Research has shown that most companies will find that a salary system will be more profitable than a commission system. 
B)  It is often difficult to attribute output to particular workers. 
C)  If workers are paid on the basis of the number of units of output they produce, they may become less concerned about quality. 
D)  Commission compensation systems are riskier for employees than a salary system, and many workers dislike risk. 
A)  Research has shown that most companies will find that a salary system will be more profitable than a commission system. 
B)  It is often difficult to attribute output to particular workers. 
C)  If workers are paid on the basis of the number of units of output they produce, they may become less concerned about quality. 
D)  Commission compensation systems are riskier for employees than a salary system, and many workers dislike risk.

Question 19

If a dollar a year from now will likely have less purchasing power because of inflation,then a dollar today ________ a dollar a year from now.

Accepted Answer

A)  is more valuable than 
B)  is less valuable than 
C)  has the same value as 
D)  may be more valuable or less valuable than 
A)  is more valuable than 
B)  is less valuable than 
C)  has the same value as 
D)  may be more valuable or less valuable than

Question 20

All of the following will shift the labour supply curve except

Accepted Answer

A)  an increase in the labour force participation rate among women. 
B)  an increase in the average age of retirement. 
C)  an increase in the wage rate. 
D)  a change in a country's immigration policy. 
A)  an increase in the labour force participation rate among women. 
B)  an increase in the average age of retirement. 
C)  an increase in the wage rate. 
D)  a change in a country's immigration policy.

If the labour supply is unchanged,an increase in the demand for labour will

Which of the following summarises the impact of population growth on the labour market?

The present value of $475 received 3 years in the future would be calculated as which of the following when the interest rate is 6 per cent?

As more output is produced,the marginal product of labour declines

How much is a bond that pays $20 in coupon payments for 4 years and $1000 at the end of the fourth year worth if the interest rate is 5 per cent?

Which of the following will not cause the labour demand curve to shift to the right?

The value you give today to money you will receive in the future is called the future payment's

Let MP = marginal product,P = output price,and W = wage,then the equation that represents the condition where a competitive firm would hire another worker is

Table 10-1 -Refer to Table 10-1.The marginal product of the fourth unit of labour is

Suppose the labour market is in equilibrium.Which of the following statements is false?

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If hiring another worker would increase output by three units per hour,then to maximise profits the firm should

Painters who paint water towers earn higher wages relative to painters who paint houses because

If workers in nuclear power plants underestimate the true risk of their jobs

Table 10-1 -Refer to Table 10-1.Suppose the output price is $3.If the firm represented in the table is maximising its profit by hiring six workers,what is the wage rate?

Workers who dislike risk

Marginal productivity theory implies that in a perfectly competitive market economy,a worker will receive income

The marginal revenue product of capital is

Which of the following is not a reason for firms to choose a salary system rather than a commission system to compensate their employees?

If a dollar a year from now will likely have less purchasing power because of inflation,then a dollar today ________ a dollar a year from now.

All of the following will shift the labour supply curve except

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

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Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

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Exam 10: Monopoly and Antitrust

If the labour supply is unchanged,an increase in the demand for labour will

Which of the following summarises the impact of population growth on the labour market?

The present value of $475 received 3 years in the future would be calculated as which of the following when the interest rate is 6 per cent?

As more output is produced,the marginal product of labour declines

How much is a bond that pays $20 in coupon payments for 4 years and $1000 at the end of the fourth year worth if the interest rate is 5 per cent?

Which of the following will not cause the labour demand curve to shift to the right?

The value you give today to money you will receive in the future is called the future payment's

Let MP = marginal product,P = output price,and W = wage,then the equation that represents the condition where a competitive firm would hire another worker is

Table 10-1 -Refer to Table 10-1.The marginal product of the fourth unit of labour is

Suppose the labour market is in equilibrium.Which of the following statements is false?

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If hiring another worker would increase output by three units per hour,then to maximise profits the firm should

Painters who paint water towers earn higher wages relative to painters who paint houses because

If workers in nuclear power plants underestimate the true risk of their jobs

Table 10-1 -Refer to Table 10-1.Suppose the output price is $3.If the firm represented in the table is maximising its profit by hiring six workers,what is the wage rate?

Workers who dislike risk

Marginal productivity theory implies that in a perfectly competitive market economy,a worker will receive income

The marginal revenue product of capital is

Which of the following is not a reason for firms to choose a salary system rather than a commission system to compensate their employees?

If a dollar a year from now will likely have less purchasing power because of inflation,then a dollar today ________ a dollar a year from now.

All of the following will shift the labour supply curve except

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