Question 1

What is a Nash equilibrium?

Accepted Answer

The answer of What is a Nash equilibrium?...

Question 2

Based on the table below, how many workers will the firm employ in order to maximize profits? $$\begin{array} { c c c c } 
\text { Workers } & \text { Output } & \text { Product Price } & \text { Wage Rate } \
\hline 10 & 400 & \$ 20 & \$ 450 \
11 & 450 & \$ 19 & \$ 450 \
12 & 505 & \$ 18 & \$ 450 \
13 & 555 & \$ 17 & \$ 450 \
14 & 600 & \$ 16 & \$ 450 \
15 & 640 & \$ 15 & \$ 450 \
16 & 675 & \$ 14 & \$ 50
\end{array}$$

Accepted Answer

A) 12 
B) 13 
C) 14 
D) 15 
E) 16

Question 3

Which of the following is the best example of an investment in human capital?

Accepted Answer

A) an increase in the number of hours worked per week by worker in a job employing low-skilled labor 
B) the purchase of company stock by a worker 
C) a summer internship at a law firm filled by someone attending law school 
D) payments into a retirement pension plan by a skilled laborer 
E) the purchase of a vehicle by an employee in order to commute to work

Question 4

Why is it difficult for an oligopolist to determine its profit-maximizing price and output?

Accepted Answer

The answer of Why is it difficult for an oligopolist...

Question 5

Which of the following is the best example of an investment in human capital?

Accepted Answer

A) the purchase of an industrial development bond 
B) a graduate student who completed 24 semester units in economics last year 
C) the purchase of a lawn mower by a homeowner 
D) an unemployed stockbroker who drives a cab in order to pay his bills

Question 6

When a firm evaluates the contribution of a worker to its ____, it must calculate the worker's contribution to revenue, minus the worker's ____.

Accepted Answer

A) profits; wage 
B) output; wage 
C) profits; marginal productivity 
D) output; marginal productivity

Question 7

In the long run, monopolistically competitive firms typically produce with allocative efficiency.

Accepted Answer

A) True 
 B)False

Question 8

Collective bargaining refers to negotiations between:

Accepted Answer

A) representatives of employers and unions. 
B) unions and government regulators. 
C) consumers and producers. 
D) employers and consumers.

Question 9

Would the owner of a profit-maximizing fast-food establishment hire another worker for $55 per day if that worker added faster service, increasing sales and revenue by $50 per day? Why or why not?

Accepted Answer

The answer of Would the owner of a profit-maximizing fast-food...

Question 10

The market supply curve for labor:

Accepted Answer

A) shows the relationship between the wage rate and the number of employees firms are willing to hire. 
B) shows the relationship between the price of output and the number of employees firms are willing to hire. 
C) shows the relationship between the wage rate and the quantity of labor that workers are willing to supply. 
D) shows the relationship between the price of output and the quantity of labor that workers are willing to supply.

Question 11

Other things being equal, an increase in the labor force resulting from increased immigration tends to:

Accepted Answer

A) increase wages. 
B) decrease wages. 
C) decrease the demand for labor. 
D) increase the demand for labor. 
E) have no effect on wages.

Question 12

Not all similarly skilled workers are included in unions.As a result, wages for unionized workers tend to be ____ than for nonunion workers.Additionally, as a significant number of skilled workers seek work in the nonunion sector, the supply curve for nonunion labor shifts to the ____, thereby ____ wages for nonunion workers.

Accepted Answer

A) higher; right; reducing 
B) higher; left; reducing 
C) lower; right; increasing 
D) lower; left; increasing

Question 13

A productivity slowdown could result from

Accepted Answer

A) an increase in capital formation. 
B) an increase in the number of unskilled and inexperienced workers. 
C) a decrease in the relative size of the service sector. 
D) any of the above. 
E) none of the above.

Question 14

Lower wages will

Accepted Answer

A) decrease the demand for labor. 
B) decrease the quantity of labor demanded. 
C) increase the demand for labor. 
D) increase the quantity of labor demanded.

Question 15

The major reason the market demand curve for labor slopes downward is because:

Accepted Answer

A) at lower wage rates, workers are less willing to supply labor to the market. 
B) at lower wage rates, workers are more willing to supply labor to the market. 
C) of the law of diminishing marginal product. 
D) of the law of diminishing marginal resource cost.

Question 16

Figure 10-B 
-Refer to Figure 10-B.Which of the following situations is relevant to Case B?

Accepted Answer

A) New workers enter the labor force 
B) Increases in income from other sources than employment 
C) Improvements in amenities associated with a job or location 
D) People become willing to work more hours at a given wage

Question 17

The poverty rate in the United States is defined as the proportion of the population that fails to earn a ____ absolute income standard.Poverty rates in the United States have largely ____ since the 1960s.

Accepted Answer

A) maximum; risen 
B) maximum; fallen 
C) minimum; fallen 
D) minimum; risen

Question 18

Monopolistic competition is a market structure characterized by many small firms selling a homogeneous product.

Accepted Answer

A) True 
 B)False

Question 19

Figure 10-A 
-Refer to Figure 10-A.In the diagram, when unions successfully increase the wages of its members, the supply curve in the union sector shifts from ____ and ____ workers lose their jobs as a result.

Accepted Answer

A) S1 to S2; L3 - L1 
B) S2 to S1; L3 - L1 
C) S1 to S2; L2 - L1 
D) S2 to S1; L2 - L1 
E) S2 to S1; L2

Question 20

Bob's Baubles, Inc., sells its product for $3 each in a perfectly competitive market.If it increases its workforce from 1,000 to 1,001, its output goes from 615 to 625 per day.Bob should hire the 1,001st worker only if:

Accepted Answer

A) the wage is more than $30 per day. 
B) the wage is $30 or less per day. 
C) the wage is less than $10 per day. 
D) the wage is less than $3 per day.

Exam 10: Labor Markets, Income Distribution, and Poverty

What is a Nash equilibrium?

Which of the following is the best example of an investment in human capital?

Why is it difficult for an oligopolist to determine its profit-maximizing price and output?

Which of the following is the best example of an investment in human capital?

When a firm evaluates the contribution of a worker to its , it must calculate the worker's contribution to revenue, minus the worker's .

In the long run, monopolistically competitive firms typically produce with allocative efficiency.

Collective bargaining refers to negotiations between:

Would the owner of a profit-maximizing fast-food establishment hire another worker for $55 per day if that worker added faster service, increasing sales and revenue by $50 per day? Why or why not?

The market supply curve for labor:

Other things being equal, an increase in the labor force resulting from increased immigration tends to:

A productivity slowdown could result from

Lower wages will

The major reason the market demand curve for labor slopes downward is because:

Figure 10-B -Refer to Figure 10-B.Which of the following situations is relevant to Case B?

The poverty rate in the United States is defined as the proportion of the population that fails to earn a absolute income standard.Poverty rates in the United States have largely since the 1960s.

Monopolistic competition is a market structure characterized by many small firms selling a homogeneous product.

Figure 10-A -Refer to Figure 10-A.In the diagram, when unions successfully increase the wages of its members, the supply curve in the union sector shifts from and workers lose their jobs as a result.

Bob's Baubles, Inc., sells its product for $3 each in a perfectly competitive market.If it increases its workforce from 1,000 to 1,001, its output goes from 615 to 625 per day.Bob should hire the 1,001^st worker only if:

Exam 10: Labor Markets, Income Distribution, and Poverty

What is a Nash equilibrium?

Which of the following is the best example of an investment in human capital?

Why is it difficult for an oligopolist to determine its profit-maximizing price and output?

Which of the following is the best example of an investment in human capital?

When a firm evaluates the contribution of a worker to its ____, it must calculate the worker's contribution to revenue, minus the worker's ____.

In the long run, monopolistically competitive firms typically produce with allocative efficiency.

Collective bargaining refers to negotiations between:

Would the owner of a profit-maximizing fast-food establishment hire another worker for $55 per day if that worker added faster service, increasing sales and revenue by $50 per day? Why or why not?

The market supply curve for labor:

Other things being equal, an increase in the labor force resulting from increased immigration tends to:

A productivity slowdown could result from

Lower wages will

The major reason the market demand curve for labor slopes downward is because:

Figure 10-B -Refer to Figure 10-B.Which of the following situations is relevant to Case B?

The poverty rate in the United States is defined as the proportion of the population that fails to earn a ____ absolute income standard.Poverty rates in the United States have largely ____ since the 1960s.

Monopolistic competition is a market structure characterized by many small firms selling a homogeneous product.

Figure 10-A -Refer to Figure 10-A.In the diagram, when unions successfully increase the wages of its members, the supply curve in the union sector shifts from ____ and ____ workers lose their jobs as a result.

Bob's Baubles, Inc., sells its product for $3 each in a perfectly competitive market.If it increases its workforce from 1,000 to 1,001, its output goes from 615 to 625 per day.Bob should hire the 1,001st worker only if:

When a firm evaluates the contribution of a worker to its , it must calculate the worker's contribution to revenue, minus the worker's .

The poverty rate in the United States is defined as the proportion of the population that fails to earn a absolute income standard.Poverty rates in the United States have largely since the 1960s.

Figure 10-A -Refer to Figure 10-A.In the diagram, when unions successfully increase the wages of its members, the supply curve in the union sector shifts from and workers lose their jobs as a result.

Bob's Baubles, Inc., sells its product for $3 each in a perfectly competitive market.If it increases its workforce from 1,000 to 1,001, its output goes from 615 to 625 per day.Bob should hire the 1,001^st worker only if: