Question 1

Which of the following is NOT a kind of preference-based discrimination?

Accepted Answer

A)  discrimination using statistics 
B)  discrimination by employers 
C)  discrimination by customers 
D)  discrimination by employees 
A)  discrimination using statistics 
B)  discrimination by employers 
C)  discrimination by customers 
D)  discrimination by employees

Question 2

Your marginal product of labor reflects not just your abilities but the abilities of those around you.

Accepted Answer

A) True 
 B)False

Question 3

The market supply curve for labor:

Accepted Answer

A)  slopes up. 
B)  slopes down. 
C)  is flat. 
D)  starts sloping up but may then bend back as wages rise. 
A)  slopes up. 
B)  slopes down. 
C)  is flat. 
D)  starts sloping up but may then bend back as wages rise.

Question 4

When labor demand increases, the wage is expected to:

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  change in the same direction. 
A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  change in the same direction.

Question 5

When wages decrease, firms will hire more workers who will be:

Accepted Answer

A)  assigned to the most important tasks. 
B)  assigned to the least important tasks. 
C)  least likely to be laid off. 
D)  paid wages that are higher than market wages. 
A)  assigned to the most important tasks. 
B)  assigned to the least important tasks. 
C)  least likely to be laid off. 
D)  paid wages that are higher than market wages.

Question 6

Labor market issues are:

Accepted Answer

A)  something we are born with. 
B)  negatively correlated with an individual's wage rate. 
C)  produced by investing time and other resources in education, training, and experience. 
D)  ultimately leading to lower wage premiums over time. 
A)  something we are born with. 
B)  negatively correlated with an individual's wage rate. 
C)  produced by investing time and other resources in education, training, and experience. 
D)  ultimately leading to lower wage premiums over time.

Question 7

If people with unusual first names are more likely to commit a crime than people with more popular names and employers use this information to avoid hiring people with unusual first names, they are practicing:

Accepted Answer

A)  racism. 
B)  discrimination. 
C)  employer privilege. 
D)  due-diligence discrimination. 
A)  racism. 
B)  discrimination. 
C)  employer privilege. 
D)  due-diligence discrimination.

Question 8

Marián Hossa was paid $7.4 million by the Detroit Red Wings for the 2008-2009 season. We can conclude that:

Accepted Answer

A)  Marián Hossa was overpaid. 
B)  the Red Wings expected Marián Hossa to increase the team's revenue by at least $7.4 million. 
C)  the marginal product of labor of Marián Hossa must be less than $7.4 million. 
D)  the marginal product of labor of Marián Hossa is 0.90 times the marginal cost. 
A)  Marián Hossa was overpaid. 
B)  the Red Wings expected Marián Hossa to increase the team's revenue by at least $7.4 million. 
C)  the marginal product of labor of Marián Hossa must be less than $7.4 million. 
D)  the marginal product of labor of Marián Hossa is 0.90 times the marginal cost.

Question 9

The marginal product of labor increases as a firm hires more workers.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is NOT correct?

Accepted Answer

A)  Unions can raise the wages of particular classes of workers. 
B)  Unions are the fundamental reason why wages are high in the wealthy countries. 
C)  High wages of physicians are due to the restriction of physician supply. 
D)  Less unionized Britain has grown more rapidly than the more unionized France. 
A)  Unions can raise the wages of particular classes of workers. 
B)  Unions are the fundamental reason why wages are high in the wealthy countries. 
C)  High wages of physicians are due to the restriction of physician supply. 
D)  Less unionized Britain has grown more rapidly than the more unionized France.

Question 11

Explain why workers in developed countries, like the United States, earn more for the same type of work than workers in less-developed countries, such as India.

Accepted Answer

The productivity of companies in develop

Question 12

Which of the following would you expect to earn a higher wage as a result of a compensating differential?

Accepted Answer

A)  computer programmers 
B)  athletic trainers 
C)  coal miners 
D)  receptionists 
A)  computer programmers 
B)  athletic trainers 
C)  coal miners 
D)  receptionists

Question 13

Lawyers who work at law firms tend to work very long hours and must be available for their clients at any time, day or night. Lawyers who work as public defenders, on the other hand, work hours that are more normal. What idea suggests that lawyers who work at law firms will earn more than public defenders on average?

Accepted Answer

A)  marginal product of labor 
B)  labor market issues 
C)  compensating differential 
D)  labor market discrimination 
A)  marginal product of labor 
B)  labor market issues 
C)  compensating differential 
D)  labor market discrimination

Question 14

When labor supply decreases, the wage is expected to:

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  change in an indeterminate direction. 
A)  increase. 
B)  decrease. 
C)  remain the same. 
D)  change in an indeterminate direction.

Question 15

One reason some people earn more than others is that they have more education, training, and experiences, what economists call:

Accepted Answer

A)  labor market issues. 
B)  statistical discrimination. 
C)  labor arbitrage. 
D)  signaling power. 
A)  labor market issues. 
B)  statistical discrimination. 
C)  labor arbitrage. 
D)  signaling power.

Question 16

Why is discrimination by employers easier to overcome than discrimination by employees?

Accepted Answer

A)  The benefits of employer-base discrimination are higher. 
B)  The compensation needed to overcome employee-based discrimination is higher. 
C)  It is easier to police employer-based discrimination. 
D)  Employee-based discrimination has a more direct effect on productivity. 
A)  The benefits of employer-base discrimination are higher. 
B)  The compensation needed to overcome employee-based discrimination is higher. 
C)  It is easier to police employer-based discrimination. 
D)  Employee-based discrimination has a more direct effect on productivity.

Question 17

A binding minimum wage is a(n) ______ for labor.

Accepted Answer

A)  price floor 
B)  price ceiling 
C)  equilibrium price 
D)  subsidy 
A)  price floor 
B)  price ceiling 
C)  equilibrium price 
D)  subsidy

Question 18

Firms will hire additional workers as long as:

Accepted Answer

A)  the marginal revenue of that worker is greater than the worker's wage. 
B)  the total revenue is greater than the total cost. 
C)  the marginal cost of that worker is greater than the marginal revenue. 
D)  the marginal revenue of that worker is equal to the marginal product of labor. 
A)  the marginal revenue of that worker is greater than the worker's wage. 
B)  the total revenue is greater than the total cost. 
C)  the marginal cost of that worker is greater than the marginal revenue. 
D)  the marginal revenue of that worker is equal to the marginal product of labor.

Question 19

The ______ is derived from a marginal product of labor function.

Accepted Answer

A)  supply of labor 
B)  demand for labor 
C)  minimum wage 
D)  salary cap 
A)  supply of labor 
B)  demand for labor 
C)  minimum wage 
D)  salary cap

Question 20

The college wage premium is the ratio of the wages of college graduates to that of high school graduates.

Accepted Answer

A) True 
 B)False

Exam 18: Labor Markets

Which of the following is NOT a kind of preference-based discrimination?

Your marginal product of labor reflects not just your abilities but the abilities of those around you.

The market supply curve for labor:

When labor demand increases, the wage is expected to:

When wages decrease, firms will hire more workers who will be:

Labor market issues are:

If people with unusual first names are more likely to commit a crime than people with more popular names and employers use this information to avoid hiring people with unusual first names, they are practicing:

Marián Hossa was paid $7.4 million by the Detroit Red Wings for the 2008-2009 season. We can conclude that:

The marginal product of labor increases as a firm hires more workers.

Which of the following statements is NOT correct?

Explain why workers in developed countries, like the United States, earn more for the same type of work than workers in less-developed countries, such as India.

Which of the following would you expect to earn a higher wage as a result of a compensating differential?

When labor supply decreases, the wage is expected to:

One reason some people earn more than others is that they have more education, training, and experiences, what economists call:

Why is discrimination by employers easier to overcome than discrimination by employees?

A binding minimum wage is a(n) ______ for labor.

Firms will hire additional workers as long as:

The ______ is derived from a marginal product of labor function.

The college wage premium is the ratio of the wages of college graduates to that of high school graduates.

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

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