Question 1

The main way that unions raise wages is through increasing the demand for labor.

Accepted Answer

A) True 
 B)False

Question 2

It is possible for an individual to have a downward-sloping labor supply curve if:

Accepted Answer

A)  the wage increases enough that a worker may decide to work less and enjoy the income. 
B)  higher wages increase the return to effort, leading to increased hours of work. 
C)  all other supply curves slope upward. 
D)  the standard work-week is 40 hours. 
A)  the wage increases enough that a worker may decide to work less and enjoy the income. 
B)  higher wages increase the return to effort, leading to increased hours of work. 
C)  all other supply curves slope upward. 
D)  the standard work-week is 40 hours.

Question 3

Human capital labor market issues:

Accepted Answer

A)  refers to workers who do highly repetitive work, which requires little thought and creativity. 
B)  include the equipment, tools, and computers that make workers more productive. 
C)  include the skills, knowledge, and experience that people obtain. 
D)  refers to a worker in a capital intensive industry. 
A)  refers to workers who do highly repetitive work, which requires little thought and creativity. 
B)  include the equipment, tools, and computers that make workers more productive. 
C)  include the skills, knowledge, and experience that people obtain. 
D)  refers to a worker in a capital intensive industry.

Question 4

Which of the following is most likely to improve the productivity of workers?

Accepted Answer

A)  federal legislation mandating benefits 
B)  an increase in unionization 
C)  an increase in the minimum wage 
D)  investment in human capital labor market issues 
A)  federal legislation mandating benefits 
B)  an increase in unionization 
C)  an increase in the minimum wage 
D)  investment in human capital labor market issues

Question 5

Workers in many foreign countries such as India are paid much less for work that is very similar to the work done by workers in the United States. One reason for this is that:

Accepted Answer

A)  India is a more productive economy. 
B)  workers in the United States are greedy. 
C)  India is a less productive economy. 
D)  workers in India are less materialistic. 
A)  India is a more productive economy. 
B)  workers in the United States are greedy. 
C)  India is a less productive economy. 
D)  workers in India are less materialistic.

Question 6

If the marginal product of labor is $10 an hour, the firm should hire the worker so long as the wage (including fringe benefits) exceeds $10 an hour.

Accepted Answer

A) True 
 B)False

Question 7

Why might an individual's labor supply curve bend backwards?

Accepted Answer

A)  As wages rise above a threshold level, the individual will decide to work harder. 
B)  As wages rise above a threshold level, the individual may opt for more leisure time. 
C)  As wages rise above a threshold level, firms limit the amount of hours that a worker can work. 
D)  When wages rise, firms hire fewer workers. 
A)  As wages rise above a threshold level, the individual will decide to work harder. 
B)  As wages rise above a threshold level, the individual may opt for more leisure time. 
C)  As wages rise above a threshold level, firms limit the amount of hours that a worker can work. 
D)  When wages rise, firms hire fewer workers.

Question 8

A compensating differential is the difference in wages that are offered to different workers sometimes working the same job.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is TRUE?
I. The market supply curve for labor can be upward sloping or downward sloping.
II. As wages increase, the market labor supply curve slopes upward because some people are willing to work more hours.
III. As wages increase in the health care industry, the market labor supply curve slopes upward because some workers from other industries decide to get jobs in health care.

Accepted Answer

A)  I only 
B)  II only 
C)  I, II, and III 
D)  II and III only 
A)  I only 
B)  II only 
C)  I, II, and III 
D)  II and III only

Question 10

Fishermen who go deep-sea crab fishing (like those on The Deadliest Catch) earn:

Accepted Answer

A)  the same hourly wages as most other professions. 
B)  a compensating wage differential. 
C)  a college wage premium. 
D)  the same wage as all other local fishermen. 
A)  the same hourly wages as most other professions. 
B)  a compensating wage differential. 
C)  a college wage premium. 
D)  the same wage as all other local fishermen.

Question 11

Which of the following is NOT a potential result of unionization?

Accepted Answer

A)  higher wages across all industries 
B)  higher wages in the unionized industry 
C)  lower employment in the unionized industry 
D)  a poorer economy as a result of work stoppages 
A)  higher wages across all industries 
B)  higher wages in the unionized industry 
C)  lower employment in the unionized industry 
D)  a poorer economy as a result of work stoppages

Question 12

Which of the following statements is TRUE?
I. Union members earn higher wages because unions restrict the supply of labor.
II. Unions are similar to cartels in that they restrict competition among workers.
III. Countries with more union members earn more than countries with fewer union members.

Accepted Answer

A)  I and II only 
B)  I, II, and III 
C)  II and III only 
D)  III only 
A)  I and II only 
B)  I, II, and III 
C)  II and III only 
D)  III only

Question 13

If the marginal product of labor is constant in labor, then a firm-level labor demand curve is:

Accepted Answer

A)  positively sloped. 
B)  negatively sloped. 
C)  flat 
D)  varied. 
A)  positively sloped. 
B)  negatively sloped. 
C)  flat 
D)  varied.

Question 14

Low-rise construction workers are expected to be paid more than high-rise construction workers.

Accepted Answer

A) True 
 B)False

Question 15

If the marginal product of labor is decreasing in labor, then a market labor demand curve is:

Accepted Answer

A)  positively sloped. 
B)  negatively sloped. 
C)  flat. 
D)  varied. 
A)  positively sloped. 
B)  negatively sloped. 
C)  flat. 
D)  varied.

Question 16

If employers discriminate against redheads:

Accepted Answer

A)  it won't be very profitable to hire redheads. 
B)  it becomes more profitable to hire redheads. 
C)  redheads won't be able to find jobs. 
D)  redheads will have higher wages than non-redheads. 
A)  it won't be very profitable to hire redheads. 
B)  it becomes more profitable to hire redheads. 
C)  redheads won't be able to find jobs. 
D)  redheads will have higher wages than non-redheads.

Question 17

The marginal product of labor generally increases as more labor is hired.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is NOT the main driver behind the process of improving the quality of American jobs?

Accepted Answer

A)  government regulation 
B)  labor unionization 
C)  increasing wealth 
D)  profit incentive 
A)  government regulation 
B)  labor unionization 
C)  increasing wealth 
D)  profit incentive

Question 19

Fishing is a relatively dangerous profession, a factor that raises the wage for fishermen.

Accepted Answer

A) True 
 B)False

Question 20

Explain why employer discrimination is not likely to persist in markets.

Accepted Answer

There are two reasons given for why empl

Exam 18: Labor Markets

The main way that unions raise wages is through increasing the demand for labor.

It is possible for an individual to have a downward-sloping labor supply curve if:

Human capital labor market issues:

Which of the following is most likely to improve the productivity of workers?

Workers in many foreign countries such as India are paid much less for work that is very similar to the work done by workers in the United States. One reason for this is that:

If the marginal product of labor is $10 an hour, the firm should hire the worker so long as the wage (including fringe benefits) exceeds $10 an hour.

Why might an individual's labor supply curve bend backwards?

A compensating differential is the difference in wages that are offered to different workers sometimes working the same job.

Fishermen who go deep-sea crab fishing (like those on The Deadliest Catch) earn:

Which of the following is NOT a potential result of unionization?

Which of the following statements is TRUE? I. Union members earn higher wages because unions restrict the supply of labor. II. Unions are similar to cartels in that they restrict competition among workers. III. Countries with more union members earn more than countries with fewer union members.

If the marginal product of labor is constant in labor, then a firm-level labor demand curve is:

Low-rise construction workers are expected to be paid more than high-rise construction workers.

If the marginal product of labor is decreasing in labor, then a market labor demand curve is:

If employers discriminate against redheads:

The marginal product of labor generally increases as more labor is hired.

Which of the following is NOT the main driver behind the process of improving the quality of American jobs?

Fishing is a relatively dangerous profession, a factor that raises the wage for fishermen.

Explain why employer discrimination is not likely to persist in markets.

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

Filters