Question 1

In a market economy discrimination by employers will NOT:

Accepted Answer

A)  causes the wages of the discriminated group to fall because of decreased demand for their services. 
B)  reduces the firm's profits. 
C)  tends to disappear over time because of the profit motive. 
D)  increases the firm's profits. 
A)  causes the wages of the discriminated group to fall because of decreased demand for their services. 
B)  reduces the firm's profits. 
C)  tends to disappear over time because of the profit motive. 
D)  increases the firm's profits.

Question 2

Suppose that there is discrimination against women by employees at a workplace. Which of the following would be the LEAST likely result(s)?

Accepted Answer

A)  Employers are less likely to hire women. 
B)  Some men may leave for other jobs if a woman is hired. 
C)  Fewer women would apply to the job. 
D)  Fewer men would apply to the job. 
A)  Employers are less likely to hire women. 
B)  Some men may leave for other jobs if a woman is hired. 
C)  Fewer women would apply to the job. 
D)  Fewer men would apply to the job.

Question 3

Unions, which are similar to cartels, restrict the hiring of workers to keep their wages high.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following provides the clearest evidence of employment discrimination by firms against minority employees?

Accepted Answer

A)  Hours worked by minority employees are greater than hours worked by whites. 
B)  The mean amount of schooling of minorities is less than that of whites. 
C)  The average wage of minority workers is less than the average wage of whites with similar productive characteristics. 
D)  The average wage of minority workers is less than the average wage of whites. 
A)  Hours worked by minority employees are greater than hours worked by whites. 
B)  The mean amount of schooling of minorities is less than that of whites. 
C)  The average wage of minority workers is less than the average wage of whites with similar productive characteristics. 
D)  The average wage of minority workers is less than the average wage of whites.

Question 5

As the wage for janitors falls, firms will demand:

Accepted Answer

A)  more janitors. 
B)  fewer janitors. 
C)  a constant number of janitors. 
D)  no janitors. 
A)  more janitors. 
B)  fewer janitors. 
C)  a constant number of janitors. 
D)  no janitors.

Question 6

Many have criticized the United Auto Workers (UAW) union for helping to contribute to the 2008-2009 collapse of the auto industry in the United States. In a New York Times editorial, Andrew Ross Sorkin claimed that the average UAW worker was paid $70 per hour, including health and pension costs, while Toyota workers in the United States receive $10 to $20 less. These high wages he claimed were the main reason for the poor competitiveness of the United States auto industry.
Using a supply and demand graph, explain how unions such as the UAW are able to keep wages high. Do you think that higher wages do in fact contribute to the lack of competitiveness of U.S. products on average?

Accepted Answer

In general, unions are able to raise wag

Question 7

The market demand curve for labor is based on the:

Accepted Answer

A)  hiring preferences of firms. 
B)  elasticity of supply of labor. 
C)  elasticity of demand for labor. 
D)  marginal product of labor. 
A)  hiring preferences of firms. 
B)  elasticity of supply of labor. 
C)  elasticity of demand for labor. 
D)  marginal product of labor.

Question 8

A newly imposed binding minimum wage:

Accepted Answer

A)  increases employment. 
B)  decreases employment. 
C)  maintains employment. 
D)  leads to full employment. 
A)  increases employment. 
B)  decreases employment. 
C)  maintains employment. 
D)  leads to full employment.

Question 9

An individual's labor supply curve:

Accepted Answer

A)  is always upward sloping. 
B)  is always perfectly inelastic. 
C)  can be either positively or negatively sloped, or perfectly inelastic. 
D)  is negatively sloped. 
A)  is always upward sloping. 
B)  is always perfectly inelastic. 
C)  can be either positively or negatively sloped, or perfectly inelastic. 
D)  is negatively sloped.

Question 10

The apartheid system in South Africa was an active segregation system endorsed by the government of South Africa.

Accepted Answer

A) True 
 B)False

Question 11

Truck drivers who drive on the ice roads in Alaska and Canada (like those on Ice Road Truckers) earn:

Accepted Answer

A)  the same hourly wages as most other professions. 
B)  a college wage premium. 
C)  a compensating wage differential. 
D)  the same wage as all other truck drivers in North America. 
A)  the same hourly wages as most other professions. 
B)  a college wage premium. 
C)  a compensating wage differential. 
D)  the same wage as all other truck drivers in North America.

Question 12

Why do similar jobs have similar compensation packages?
I. The law of demand and supply will ensure that the salaries will be similar over time.
II. Wages and "fun" adjust between jobs until compensation packages are similar.
III. Because exactly the same skills are being applied.

Accepted Answer

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

Question 13

Augusta National is an exclusive country club in Augusta, Georgia, that does not allow women to be members. The primary reason for this is most likely that

Accepted Answer

A)  the chairman of Augusta National discriminates against women-an example of employer discrimination. 
B)  the other members of Augusta National do not want women on their course-an example of customer discrimination. 
C)  the town of Augusta discriminations against women-an example of government discrimination. 
D)  the workers at Augusta National don't want to wait on women-an example of employee discrimination. 
A)  the chairman of Augusta National discriminates against women-an example of employer discrimination. 
B)  the other members of Augusta National do not want women on their course-an example of customer discrimination. 
C)  the town of Augusta discriminations against women-an example of government discrimination. 
D)  the workers at Augusta National don't want to wait on women-an example of employee discrimination.

Question 14

As more workers are hired, the marginal product of labor typically:

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  oscillates more rapidly. 
A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  oscillates more rapidly.

Question 15

To maximize profit, a firm will hire workers when the ________ in revenue from hiring an additional worker ________ the worker's wage.

Accepted Answer

A)  decrease; is less than or equal to 
B)  decrease; is greater than 
C)  increase; is greater than 
D)  increase; is less than or equal to 
A)  decrease; is less than or equal to 
B)  decrease; is greater than 
C)  increase; is greater than 
D)  increase; is less than or equal to

Question 16

Labor unions can lower wages for everyone through costly work stoppages.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is FALSE?

Accepted Answer

A)  The returns to college education have been increasing over time. 
B)  College graduates earn about twice that of high school graduates. 
C)  There is almost no return to getting more education beyond a bachelor's degree. 
D)  Grade school deficiencies may limit the number of people entering college, increasing the returns to education. 
A)  The returns to college education have been increasing over time. 
B)  College graduates earn about twice that of high school graduates. 
C)  There is almost no return to getting more education beyond a bachelor's degree. 
D)  Grade school deficiencies may limit the number of people entering college, increasing the returns to education.

Question 18

Similar jobs will often have different compensation packages, all things considered.

Accepted Answer

A) True 
 B)False

Question 19

One factor that does NOT lower wages for women as a group is that:

Accepted Answer

A)  employers discriminate against women. 
B)  men are more productive than women on average. 
C)  women tend to have less job experience than men of the same age. 
D)  women are more productive as men on average. 
A)  employers discriminate against women. 
B)  men are more productive than women on average. 
C)  women tend to have less job experience than men of the same age. 
D)  women are more productive as men on average.

Question 20

When labor supply increases, 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.

Exam 18: Labor Markets

In a market economy discrimination by employers will NOT:

Suppose that there is discrimination against women by employees at a workplace. Which of the following would be the LEAST likely result(s)?

Unions, which are similar to cartels, restrict the hiring of workers to keep their wages high.

Which of the following provides the clearest evidence of employment discrimination by firms against minority employees?

As the wage for janitors falls, firms will demand:

The market demand curve for labor is based on the:

A newly imposed binding minimum wage:

An individual's labor supply curve:

The apartheid system in South Africa was an active segregation system endorsed by the government of South Africa.

Truck drivers who drive on the ice roads in Alaska and Canada (like those on Ice Road Truckers) earn:

Why do similar jobs have similar compensation packages? I. The law of demand and supply will ensure that the salaries will be similar over time. II. Wages and "fun" adjust between jobs until compensation packages are similar. III. Because exactly the same skills are being applied.

Augusta National is an exclusive country club in Augusta, Georgia, that does not allow women to be members. The primary reason for this is most likely that

As more workers are hired, the marginal product of labor typically:

To maximize profit, a firm will hire workers when the ________ in revenue from hiring an additional worker ________ the worker's wage.

Labor unions can lower wages for everyone through costly work stoppages.

Which of the following statements is FALSE?

Similar jobs will often have different compensation packages, all things considered.

One factor that does NOT lower wages for women as a group is that:

When labor supply increases, the wage is expected to:

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

To maximize profit, a firm will hire workers when the in revenue from hiring an additional worker the worker's wage.