Question 1

Which of the following is a true statement about leisure?

Accepted Answer

A) When the salary of a low income earner increases, it often becomes possible to increase both labor and leisure. 
B) Standing in line at the bank is not enjoyable and as a result is not considered leisure. 
C) If someone enjoys his or her job, then the time he or she spends at work is considered leisure. 
D) Leisure will always decrease as a person's wage increases. 
E) Leisure includes all hours that a person spends away from a paying job, regardless of how this time is spent. 
A) When the salary of a low income earner increases, it often becomes possible to increase both labor and leisure. 
B) Standing in line at the bank is not enjoyable and as a result is not considered leisure. 
C) If someone enjoys his or her job, then the time he or she spends at work is considered leisure. 
D) Leisure will always decrease as a person's wage increases. 
E) Leisure includes all hours that a person spends away from a paying job, regardless of how this time is spent. E

Question 2

Which of the following is a major impact of offshoring?

Accepted Answer

A) Elimination of domestic jobs 
B) Elimination of jobs in foreign countries 
C) Creation of jobs in the domestic country 
D) An increase in the cost of production of domestic firms 
E) A reduction in the cost of production of foreign firms 
A) Elimination of domestic jobs 
B) Elimination of jobs in foreign countries 
C) Creation of jobs in the domestic country 
D) An increase in the cost of production of domestic firms 
E) A reduction in the cost of production of foreign firms A

Question 3

The figure given below shows the demand curve in the U.S.and the cost curves in U.S.and India. Figure: 15.4   In the figure:
MC: Marginal cost curve
ATC: Average total cost curve
D: Demand curve in the U.S.
MR: Marginal revenue curve in the U.S.
According to Figure 15.4, the price and quantity of the good if produced by U.S.would be _____ and _____ respectively.

Accepted Answer

A) P1;Q1 
B) P3;Q3 
C) P2;Q4  
D) P2;Q2 
E) P4;Q4 
A) P1;Q1 
B) P3;Q3 
C) P2;Q4  
D) P2;Q2 
E) P4;Q4 D

Question 4

A wage differential between skilled and unskilled workers exists because skilled workers have higher marginal products than unskilled workers.

Accepted Answer

A) True 
 B)False

Question 5

If the supply of skilled workers is increased such that it is equal to the supply of unskilled workers, we can expect:

Accepted Answer

A) wages of skilled workers to be equal to wages of unskilled workers. 
B) wages of skilled workers to be lower than wages of unskilled workers. 
C) wages of skilled workers to be higher than wages of unskilled workers. 
D) wages to fall from current levels for unskilled workers. 
E) wages of both skilled and unskilled workers to remain unaffected. 
A) wages of skilled workers to be equal to wages of unskilled workers. 
B) wages of skilled workers to be lower than wages of unskilled workers. 
C) wages of skilled workers to be higher than wages of unskilled workers. 
D) wages to fall from current levels for unskilled workers. 
E) wages of both skilled and unskilled workers to remain unaffected.

Question 6

It is said that a wage increase can have two opposing effects.Which of the following captures these two effects?

Accepted Answer

A) A backward-bending labor-supply curve 
B) A perfectly elastic labor-supply curve 
C) A perfectly inelastic labor-supply curve 
D) The inability of average wage earners to comprehend the complexities of economic principles. 
E) A backward-bending labor-demand curve 
A) A backward-bending labor-supply curve 
B) A perfectly elastic labor-supply curve 
C) A perfectly inelastic labor-supply curve 
D) The inability of average wage earners to comprehend the complexities of economic principles. 
E) A backward-bending labor-demand curve

Question 7

Which of the following best explains the shape of the individual labor-supply curve?

Accepted Answer

A) The individual labor-supply curve is exactly like any supply curve, it always has a positive slope. 
B) The individual labor-supply curve slopes downward at all wage rates because, as wages increase, people are able to buy more leisure. 
C) The individual labor-supply curve slopes upward at lower wage rates and then bends back at higher wage rates. 
D) The individual labor-supply curve must be vertical because each person can work only eight hours per day. 
E) The individual labor-supply curve must be horizontal because labor markets are assumed to be perfectly competitive. 
A) The individual labor-supply curve is exactly like any supply curve, it always has a positive slope. 
B) The individual labor-supply curve slopes downward at all wage rates because, as wages increase, people are able to buy more leisure. 
C) The individual labor-supply curve slopes upward at lower wage rates and then bends back at higher wage rates. 
D) The individual labor-supply curve must be vertical because each person can work only eight hours per day. 
E) The individual labor-supply curve must be horizontal because labor markets are assumed to be perfectly competitive.

Question 8

The figure given below shows the demand curves (D1 and D2)and supply curves (S1 and S2)of labor in the labor market. Figure: 15.2   Refer to Figure 15.2.At the initial equilibrium (when demand is D1 and supply is S1), the wage rate and labor employment are:

Accepted Answer

A) $7 and 20 laborers. 
B) $8 and 30 laborers. 
C) $6 and 50 laborers. 
D) $5 and 20 laborers. 
E) $5 and 10 laborers. 
A) $7 and 20 laborers. 
B) $8 and 30 laborers. 
C) $6 and 50 laborers. 
D) $5 and 20 laborers. 
E) $5 and 10 laborers.

Question 9

Which of the following statements about employer prejudice is true?

Accepted Answer

A) It would be impossible for employer prejudice to exist in a firm that sells its output in a competitive market unless all rivals also discriminate. 
B) Economic theory tells us that it would be impossible for employer prejudice to exist in a firm that is a monopoly. 
C) Employer prejudice will help a monopolist to increase his profits by satisfying his managers personal prejudices. 
D) Legislation has ended employer prejudice in the United States. 
E) Employer prejudice occurs only in low-paying jobs. 
A) It would be impossible for employer prejudice to exist in a firm that sells its output in a competitive market unless all rivals also discriminate. 
B) Economic theory tells us that it would be impossible for employer prejudice to exist in a firm that is a monopoly. 
C) Employer prejudice will help a monopolist to increase his profits by satisfying his managers personal prejudices. 
D) Legislation has ended employer prejudice in the United States. 
E) Employer prejudice occurs only in low-paying jobs.

Question 10

Investment in human capital implies:

Accepted Answer

A) investment on machines, technological development, and equipments. 
B) expenses on education. 
C) expenses on paying interest for hiring real capital. 
D) expenses related to the purchase of land. 
E) profit of the entrepreneurs. 
A) investment on machines, technological development, and equipments. 
B) expenses on education. 
C) expenses on paying interest for hiring real capital. 
D) expenses related to the purchase of land. 
E) profit of the entrepreneurs.

Question 11

Since we all like to get richer, so when wage rate increases we always like to work longer hours to make more income.

Accepted Answer

A) True 
 B)False

Question 12

Because of illegal immigrants, the equilibrium wage rate of unskilled labor falls.

Accepted Answer

A) True 
 B)False

Question 13

The following figures show the demand and supply of labor in two different types of labor market. Figure 15.5   In the figures,
D: Demand curve for labor
S: Supply curve of labor
MRP: Marginal revenue product
MFC: Marginal factor cost
The Market A described in Figure 15.5 is a(n):

Accepted Answer

A) monopsonist market. 
B) monopolistic market. 
C) perfectly competitive labor market. 
D) monopolistically competitive market. 
E) oligopolistic market. 
A) monopsonist market. 
B) monopolistic market. 
C) perfectly competitive labor market. 
D) monopolistically competitive market. 
E) oligopolistic market.

Question 14

Getting the work done by some other firm at lower costs, when the firm is situated in some other country is called outsourcing.

Accepted Answer

A) True 
 B)False

Question 15

The greater the opportunity cost of any particular occupation, the smaller the number of people who will select that occupation.

Accepted Answer

A) True 
 B)False

Question 16

The principal argument against comparable worth is that:

Accepted Answer

A) men and women differ largely in terms of their productivities. 
B) market does not function correctly and leads to inefficient allocation of resources. 
C) market allocates scarce resources to their most highly valued uses in the most efficient manner. 
D) demand and supply do not allocate workers to where they are needed the most. 
E) legislation by the government are often appropriate as it processes all the available information correctly. 
A) men and women differ largely in terms of their productivities. 
B) market does not function correctly and leads to inefficient allocation of resources. 
C) market allocates scarce resources to their most highly valued uses in the most efficient manner. 
D) demand and supply do not allocate workers to where they are needed the most. 
E) legislation by the government are often appropriate as it processes all the available information correctly.

Question 17

Which of the following reasons will most likely explain why discrimination that is notrelated to personal prejudice can occur?

Accepted Answer

A) A desire to avoid associating with certain groups of people 
B) A lack of communication skills of workers seeking jobs 
C) A lack of information 
D) A lack of proper technical expertise 
E) Too many people applying for the same job 
A) A desire to avoid associating with certain groups of people 
B) A lack of communication skills of workers seeking jobs 
C) A lack of information 
D) A lack of proper technical expertise 
E) Too many people applying for the same job

Question 18

The following figures show the demand and supply of labor in two different types of labor market. Figure 15.5   In the figures,
D: Demand curve for labor
S: Supply curve of labor
MRP: Marginal revenue product
MFC: Marginal factor cost
Refer to Figure 15.5.If a minimum wage of $10 is set by the government, then in market A:

Accepted Answer

A) a shortage of 20 labor hours is created. 
B) the quantity demanded for labor rises to 20 labor hours. 
C) a shortage of 15 labor hours is created. 
D) a surplus of 20 labor hours is created. 
E) a surplus of 10 labor hours is created. 
A) a shortage of 20 labor hours is created. 
B) the quantity demanded for labor rises to 20 labor hours. 
C) a shortage of 15 labor hours is created. 
D) a surplus of 20 labor hours is created. 
E) a surplus of 10 labor hours is created.

Question 19

The following figures show the demand and supply of labor in two different types of labor market. Figure 15.5   In the figures,
D: Demand curve for labor
S: Supply curve of labor
MRP: Marginal revenue product
MFC: Marginal factor cost
The Market B described in Figure 15.5 is a(n):

Accepted Answer

A) perfectly competitive labor market. 
B) monopolist market. 
C) oligopolistic market. 
D) monoposonistic market. 
E) monopolistically competitive market. 
A) perfectly competitive labor market. 
B) monopolist market. 
C) oligopolistic market. 
D) monoposonistic market. 
E) monopolistically competitive market.

Question 20

The figure given below shows the demand curves (D1 and D2)and supply curves (S1 and S2)of labor in the labor market. Figure: 15.2   In Figure 15.2, the initial labor supply is S1 , and the labor demand is D1.If the wage is $6, which of the following is correct?

Accepted Answer

A) The actual wage is above the equilibrium wage. 
B) There is a shortage of 30 workers. 
C) There is a shortage of 20 workers. 
D) There is a shortage of 10 workers. 
E) The market is in equilibrium. 
A) The actual wage is above the equilibrium wage. 
B) There is a shortage of 30 workers. 
C) There is a shortage of 20 workers. 
D) There is a shortage of 10 workers. 
E) The market is in equilibrium.

Exam 26: The Labor Market

Which of the following is a true statement about leisure?

Which of the following is a major impact of offshoring?

A wage differential between skilled and unskilled workers exists because skilled workers have higher marginal products than unskilled workers.

If the supply of skilled workers is increased such that it is equal to the supply of unskilled workers, we can expect:

It is said that a wage increase can have two opposing effects.Which of the following captures these two effects?

Which of the following best explains the shape of the individual labor-supply curve?

The figure given below shows the demand curves (D1 and D2)and supply curves (S1 and S2)of labor in the labor market. Figure: 15.2 Refer to Figure 15.2.At the initial equilibrium (when demand is D1 and supply is S1), the wage rate and labor employment are:

Which of the following statements about employer prejudice is true?

Investment in human capital implies:

Since we all like to get richer, so when wage rate increases we always like to work longer hours to make more income.

Because of illegal immigrants, the equilibrium wage rate of unskilled labor falls.

The following figures show the demand and supply of labor in two different types of labor market. Figure 15.5 In the figures, D: Demand curve for labor S: Supply curve of labor MRP: Marginal revenue product MFC: Marginal factor cost The Market A described in Figure 15.5 is a(n):

Getting the work done by some other firm at lower costs, when the firm is situated in some other country is called outsourcing.

The greater the opportunity cost of any particular occupation, the smaller the number of people who will select that occupation.

The principal argument against comparable worth is that:

Which of the following reasons will most likely explain why discrimination that is notrelated to personal prejudice can occur?

The following figures show the demand and supply of labor in two different types of labor market. Figure 15.5 In the figures, D: Demand curve for labor S: Supply curve of labor MRP: Marginal revenue product MFC: Marginal factor cost The Market B described in Figure 15.5 is a(n):

The figure given below shows the demand curves (D1 and D2)and supply curves (S1 and S2)of labor in the labor market. Figure: 15.2 In Figure 15.2, the initial labor supply is S1 , and the labor demand is D1.If the wage is $6, which of the following is correct?

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

The figure given below shows the demand curves (D₁ and D₂)and supply curves (S₁ and S₂)of labor in the labor market. Figure: 15.2 Refer to Figure 15.2.At the initial equilibrium (when demand is D₁and supply is S₁), the wage rate and labor employment are:

The figure given below shows the demand curves (D₁ and D₂)and supply curves (S₁ and S₂)of labor in the labor market. Figure: 15.2 In Figure 15.2, the initial labor supply is S₁, and the labor demand is D₁.If the wage is $6, which of the following is correct?