Question 1

A labor supply elasticity of 0.1 means that a wage increase of 10 percent will:

Accepted Answer

A)  reduce the quantity of labor supplied by 10 percent.
B)  increase the quantity of labor supplied by 10 percent.
C)  increase the quantity of labor supplied by 1 percent.
D)  reduce the quantity of labor supplied by 1 percent.E) C) and D)
F) B) and D)

Question 2

Which of the following will not shift the demand for labor to the right?

Accepted Answer

A)  An increase in the price of a competing input
B)  An increase in the demand for output
C)  An increase in the wage rate
D)  An increase in the competitiveness of an industryE) A) and C)
F) C) and D)

Question 3

Demonstrate graphically and explain verbally a monopsony labor market.

Accepted Answer

A monopsony is a market in which a singl...

Question 4

Some suggest that many New York taxi drivers set an income goal for the week and finish work once they have achieved that goal. If this is true, on busy days when the effective hourly wage is higher, taxi drivers will:

Accepted Answer

A)  work the same number of hours as they will on slower days.
B)  work fewer hours than they will on slower days.
C)  work more hours than they will on slower days.
D)  not work any hours.E) A) and B)
F) All of the above

Question 5

The information revolution is:

Accepted Answer

A)  reducing overall employment.
B)  changing the nature of employment.
C)  increasing manufacturing employment.
D)  putting upward pressure on wages.E) A) and D)
F) B) and D)

Question 6

The effect of a change in the wage rate on the number of hours people are willing and able to work is stronger when the:

Accepted Answer

A)  demand for labor is elastic.
B)  demand for labor is inelastic.
C)  supply of labor is elastic.
D)  supply of labor is inelastic.E) A) and B)
F) A) and C)

Question 7

Two members of the Kenyan parliament from coffee-growing areas said that no firm should have a monopoly to market Kenyan coffee. The retail coffee company Tetu Coffee has sparked a storm in the industry by promising to earn the country Sh400 (Kenyan Shilling) billion annually if given exclusive licenses to market Kenyan coffee. The members of parliament said the coffee bean farmers should be free to sell their beans to the highest bidder. If all coffee growers had to sell their produce to Tetu Coffee, this would be a(n) :

Accepted Answer

A)  natural monopoly.
B)  price-discriminating monopoly.
C)  oligopoly.
D)  monopsony.E) C) and D)
F) All of the above

Question 8

The opportunity cost of leisure:

Accepted Answer

A)  increases as wages get higher.
B)  decreases as wages get higher.
C)  remains the same as wages get higher.
D)  has nothing to do with wages.E) A) and C)
F) C) and D)

Question 9

If there are a number of inexpensive substitutes for labor in the production process, labor:

Accepted Answer

A)  demand will most likely be elastic.
B)  demand will most likely be inelastic.
C)  supply will most likely be elastic.
D)  supply will most likely be inelastic.E) None of the above
F) C) and D)

Question 10

Refer to the table shown.   Number wf Warkers  Tatal Praduct per Huur 124244360474584690792\begin{array}{l}\begin{array} { | c | c | } \hline 	ext { Number wf Warkers } & 	ext { Tatal Praduct per Huur }\\hline 1 & 24 \\hline 2 & 44 \\hline 3 & 60 \\hline 4 & 74 \\hline 5 & 84 \\hline 6 & 90 \\hline 7 & 92 \\hline\end{array}\end{array} Number wf Warkers 1234567​ Tatal Praduct per Huur 24446074849092​​​  If the price per unit of product is $2, the marginal revenue product of the fourth worker is:

Accepted Answer

A)  14.
B)  28.
C)  32.
D)  40. E) B) and D)
F) C) and D)

Question 11

A market in which there is only a single seller and a single buyer is a:

Accepted Answer

A)  monopoly.
B)  monopsony.
C)  bilateral monopoly.
D)  perfectly competitive market.E) A) and D)
F) A) and C)

Question 12

The elasticity of labor supply:

Accepted Answer

A)  should be greater for a state than for a town because people can travel more easily between states than between towns.
B)  should be greater for a town than for a state because people are more likely to consider work in a neighboring town than in another state.
C)  for a town should equal the elasticity of labor supply for a state.
D)  for a town is not related to the elasticity of labor supply for a state.E) A) and C)
F) A) and D)

Question 13

If a large group of people are willing to enter the labor market when wages rise, the market labor supply will be highly elastic even if individuals' supply curves are inelastic.

Accepted Answer

A) True 
 B)False

Question 14

If a union gains significant monopoly power in a competitive market, employment:

Accepted Answer

A)  and wages should increase.
B)  and wages should decrease.
C)  should increase and wages should decrease.
D)  should decrease and wages should increase.E) A) and C)
F) B) and C)

Question 15

How do you explain the fact that,over the last century,real wages in the U.S.increased substantially while the average number of hours worked per person fell?

Accepted Answer

The income and substitution effects can ...

Question 16

Entrepreneurship could best be classified as:

Accepted Answer

A)  creative labor.
B)  simple labor.
C)  unskilled labor.
D)  highly specialized labor.E) B) and C)
F) None of the above

Question 17

Suppose both wages and employment decrease. These changes most likely were caused by:

Accepted Answer

A)  a decline in immigration.
B)  an increase in emigration.
C)  an increase in the working age population.
D)  a decline in business activity in the economy.E) A) and B)
F) A) and C)

Question 18

If the marginal income tax rate falls from 50 percent to 40 percent:

Accepted Answer

A)  the average tax rate rises.
B)  the incentive to work becomes stronger.
C)  the incentive to work becomes weaker.
D)  after-tax wages decline.E) A) and C)
F) A) and B)

Question 19

A labor supply elasticity of 1.4 means that a wage increase of:

Accepted Answer

A)  10 percent will reduce the quantity of labor supplied by 14 percent.
B)  10 percent will increase the quantity of labor supplied by 14 percent.
C)  14 percent will reduce the quantity of labor supplied by 10 percent.
D)  14 percent will increase the quantity of labor supplied by 10 percent.E) None of the above
F) B) and C)

Question 20

The elasticity of labor demand is higher when:

Accepted Answer

A)  there are many substitutes for labor in the production process.
B)  the inputs that could be substituted for labor are relatively expensive.
C)  a large amount of labor is essential to the production process.
D)  labor productivity falls rapidly when output is increased.E) None of the above
F) B) and D)

Exam 17: Work and the Labor Market

Demonstrate graphically and explain verbally a monopsony labor market.

Correct Answer
verified
A monopsony is a market in which a singl...
View Answer

A market in which there is only a single seller and a single buyer is a:

Correct Answer
verified

Correct Answer
verified

The information revolution is:

Correct Answer
verified

Suppose both wages and employment decrease. These changes most likely were caused by:

Correct Answer
verified

How do you explain the fact that,over the last century,real wages in the U.S.increased substantially while the average number of hours worked per person fell?

Correct Answer
verified
The income and substitution effects can ...
View Answer

If the marginal income tax rate falls from 50 percent to 40 percent:

Correct Answer
verified

The effect of a change in the wage rate on the number of hours people are willing and able to work is stronger when the:

Correct Answer
verified

The elasticity of labor supply:

Correct Answer
verified

Entrepreneurship could best be classified as:

Correct Answer
verified

Which of the following will not shift the demand for labor to the right?

Correct Answer
verified

A labor supply elasticity of 0.1 means that a wage increase of 10 percent will:

Correct Answer
verified

Some suggest that many New York taxi drivers set an income goal for the week and finish work once they have achieved that goal. If this is true, on busy days when the effective hourly wage is higher, taxi drivers will:

Correct Answer
verified

A labor supply elasticity of 1.4 means that a wage increase of:

Correct Answer
verified

The elasticity of labor demand is higher when:

Correct Answer
verified

If a union gains significant monopoly power in a competitive market, employment:

Correct Answer
verified

If there are a number of inexpensive substitutes for labor in the production process, labor:

Correct Answer
verified

If a large group of people are willing to enter the labor market when wages rise, the market labor supply will be highly elastic even if individuals' supply curves are inelastic.

Correct Answer
verified

The opportunity cost of leisure:

Correct Answer
verified

Correct Answer
verified

Exam 17: Work and the Labor Market

Demonstrate graphically and explain verbally a monopsony labor market.

Correct AnswerverifiedA monopsony is a market in which a singl...View AnswerShow Answer

A market in which there is only a single seller and a single buyer is a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The information revolution is:

Correct AnswerverifiedShow Answer

Suppose both wages and employment decrease. These changes most likely were caused by:

Correct AnswerverifiedShow Answer

How do you explain the fact that,over the last century,real wages in the U.S.increased substantially while the average number of hours worked per person fell?

Correct AnswerverifiedThe income and substitution effects can ...View AnswerShow Answer

If the marginal income tax rate falls from 50 percent to 40 percent:

Correct AnswerverifiedShow Answer

The effect of a change in the wage rate on the number of hours people are willing and able to work is stronger when the:

Correct AnswerverifiedShow Answer

The elasticity of labor supply:

Correct AnswerverifiedShow Answer

Entrepreneurship could best be classified as:

Correct AnswerverifiedShow Answer

Which of the following will not shift the demand for labor to the right?

Correct AnswerverifiedShow Answer

A labor supply elasticity of 0.1 means that a wage increase of 10 percent will:

Correct AnswerverifiedShow Answer

Some suggest that many New York taxi drivers set an income goal for the week and finish work once they have achieved that goal. If this is true, on busy days when the effective hourly wage is higher, taxi drivers will:

Correct AnswerverifiedShow Answer

A labor supply elasticity of 1.4 means that a wage increase of:

Correct AnswerverifiedShow Answer

The elasticity of labor demand is higher when:

Correct AnswerverifiedShow Answer

If a union gains significant monopoly power in a competitive market, employment:

Correct AnswerverifiedShow Answer

If there are a number of inexpensive substitutes for labor in the production process, labor:

Correct AnswerverifiedShow Answer

If a large group of people are willing to enter the labor market when wages rise, the market labor supply will be highly elastic even if individuals' supply curves are inelastic.

Correct AnswerverifiedShow Answer

The opportunity cost of leisure:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
A monopsony is a market in which a singl...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The income and substitution effects can ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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