Question 1

The distortions created by income taxes could be minimized by changing the progressive tax system to a flat tax system.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not a reason for compensating wage differentials?

Accepted Answer

A) To compensate for the risk involved in certain jobs 
B) The supply of laborers usually outnumbers its demand in these jobs 
C) Such professions involve a high probability of life loss 
D) To attract more laborers in risky professions 
E) The working condition of some jobs are unpleasant 
A) To compensate for the risk involved in certain jobs 
B) The supply of laborers usually outnumbers its demand in these jobs 
C) Such professions involve a high probability of life loss 
D) To attract more laborers in risky professions 
E) The working condition of some jobs are unpleasant

Question 3

Which of the following statements contradicts the upward-sloping market-supply curve?`

Accepted Answer

A) All people have backward-bending individual supply curves 
B) Leisure is more enjoyable than work 
C) The elasticity of labor supply is larger than the elasticity of labor demand. 
D) More work means less leisure 
E) The opportunity cost of leisure decreases with an increase in wage rate. 
A) All people have backward-bending individual supply curves 
B) Leisure is more enjoyable than work 
C) The elasticity of labor supply is larger than the elasticity of labor demand. 
D) More work means less leisure 
E) The opportunity cost of leisure decreases with an increase in wage rate.

Question 4

The term compensating wage differential refers to:

Accepted Answer

A) the bargaining capacity of a monoposonist in the labor market. 
B) wage differences that arise from differences in the risk involved in different jobs 
C) whether or not a firm offers a 401K plan to all its employees or just some employees. 
D) wage differences that arise from difference in productivity of the workers in a firm. 
E) the negotiating powers of the trade union. 
A) the bargaining capacity of a monoposonist in the labor market. 
B) wage differences that arise from differences in the risk involved in different jobs 
C) whether or not a firm offers a 401K plan to all its employees or just some employees. 
D) wage differences that arise from difference in productivity of the workers in a firm. 
E) the negotiating powers of the trade union.

Question 5

Suppose a tax rate of 10 percent applies to all income up to $20, 000 a year, income above $20, 000 up to $50, 000 a year is taxed at a rate of 15%, and income above $50, 000 a year is taxed at 20%.Calculate the absolute amount of tax paid by a person whose annual income is $30, 000.

Accepted Answer

A) $2, 000 
B) $2, 500 
C) $4, 500 
D) $4, 000 
E) $3, 500 
A) $2, 000 
B) $2, 500 
C) $4, 500 
D) $4, 000 
E) $3, 500

Question 6

People tend to remain in those occupations that require continuous time and financial commitments to remain productive.

Accepted Answer

A) True 
 B)False

Question 7

When white males resist to share responsibilities with members of a minority group, it is termed as:

Accepted Answer

A) employer prejudice. 
B) consumer prejudice 
C) worker prejudice. 
D) statistical discrimination. 
E) occupational segregation. 
A) employer prejudice. 
B) consumer prejudice 
C) worker prejudice. 
D) statistical discrimination. 
E) occupational segregation.

Question 8

A college student's choice of a major and an occupation reflects:

Accepted Answer

A) what each college student expects wage inflation to be in the future. 
B) a lack of information on the part of the students. 
C) a lack of proper education and vocational training. 
D) the return on investment in human capital. 
E) the opportunity costs each college student faces. 
A) what each college student expects wage inflation to be in the future. 
B) a lack of information on the part of the students. 
C) a lack of proper education and vocational training. 
D) the return on investment in human capital. 
E) the opportunity costs each college student faces.

Question 9

Which of the following is not a cost of illegal immigration in the U.S.?

Accepted Answer

A) The adverse impact on unskilled workers 
B) The damage to national property caused during the process of immigration 
C) Additional expenditure on healthcare at emergency clinics and hospitals 
D) Expenditure on public education on the children of immigrants. 
E) Expenditure on employment insurance programs for the illegal immigrants. 
A) The adverse impact on unskilled workers 
B) The damage to national property caused during the process of immigration 
C) Additional expenditure on healthcare at emergency clinics and hospitals 
D) Expenditure on public education on the children of immigrants. 
E) Expenditure on employment insurance programs for the illegal immigrants.

Question 10

From an economist's viewpoint, discrimination occurs if there is a wage differential between two groups when there is no difference in the marginal revenue product of the two groups.

Accepted Answer

A) True 
 B)False

Question 11

In 2001, Alex Rodriguez, a baseball player, was given a contract paying about $25 million per year.This contract was significantly higher than that of any other player in baseball.One explanation for "A-Rod" receiving such high compensation is the superstar effect.

Accepted Answer

A) True 
 B)False

Question 12

Reliance on indicators of productivity such as education, experience, and test scores may keep some very good people from getting a job and may result in hiring unproductive people.This is called:

Accepted Answer

A) worker prejudice. 
B) statistical discrimination. 
C) crowding out. 
D) disparate treatment. 
E) comparable worth. 
A) worker prejudice. 
B) statistical discrimination. 
C) crowding out. 
D) disparate treatment. 
E) comparable worth.

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
In Figure 15.5, if a minimum wage of $10 is set by the government, then in market B:

Accepted Answer

A) wage increases but labor employment decreases. 
B) wage increases but labor employment remains constant. 
C) wage decreases from $12 to $10. 
D) both wage and employment increase. 
E) both wage and employment decrease. 
A) wage increases but labor employment decreases. 
B) wage increases but labor employment remains constant. 
C) wage decreases from $12 to $10. 
D) both wage and employment increase. 
E) both wage and employment decrease.

Question 14

A compensating wage differential is a wage difference attributable to the difference in the marginal productivity of workers.

Accepted Answer

A) True 
 B)False

Exam 26: The Labor Market

The distortions created by income taxes could be minimized by changing the progressive tax system to a flat tax system.

Which of the following is not a reason for compensating wage differentials?

Which of the following statements contradicts the upward-sloping market-supply curve?`

The term compensating wage differential refers to:

Suppose a tax rate of 10 percent applies to all income up to $20, 000 a year, income above $20, 000 up to $50, 000 a year is taxed at a rate of 15%, and income above $50, 000 a year is taxed at 20%.Calculate the absolute amount of tax paid by a person whose annual income is $30, 000.

People tend to remain in those occupations that require continuous time and financial commitments to remain productive.

When white males resist to share responsibilities with members of a minority group, it is termed as:

A college student's choice of a major and an occupation reflects:

Which of the following is not a cost of illegal immigration in the U.S.?

From an economist's viewpoint, discrimination occurs if there is a wage differential between two groups when there is no difference in the marginal revenue product of the two groups.

In 2001, Alex Rodriguez, a baseball player, was given a contract paying about $25 million per year.This contract was significantly higher than that of any other player in baseball.One explanation for "A-Rod" receiving such high compensation is the superstar effect.

Reliance on indicators of productivity such as education, experience, and test scores may keep some very good people from getting a job and may result in hiring unproductive people.This is called:

A compensating wage differential is a wage difference attributable to the difference in the marginal productivity of workers.

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

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