Question 1

The reason that the supply curve for labor in a purely competitive market rises is because:

Accepted Answer

A)   the wage rate paid to workers falls as more are hired.
B)   the marginal product of labor falls as output increases.
C)   marginal resource cost rises as productivity increases.
D)   higher wages must be paid to bid workers away from other opportunities.

Question 2

y. B)  Wx. C)  Wz. D)  Cannot be determined." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph.A monopsonist will set the wage at:

Accepted Answer

A)   Wy.
B)   Wx.
C)   Wz.
D)   Cannot be determined.

Question 3

Which is an example of a change in the price of another resource that increases labor demand?

Accepted Answer

A)   Software sales rise,thus increasing the demand for software developers.
B)   Snowboarding increases in popularity,thus increasing the demand for the workers who make snowboards.
C)   A decrease in the price of wood decreases the cost of furniture,thus increasing the demand for furniture workers.
D)   A technological change increases output per worker in the computer industry,thus increasing the demand for computer workers.

Question 4

According to proponents of human capital theory,education:

Accepted Answer

A)   increases a worker's productivity.
B)   identifies more productive workers for employers but does not directly increase productivity.
C)   should result in all workers with college degrees earning more than all workers who hold only high school diplomas.
D)   is an investment with primarily higher returns and lower risks than those available through investments in physical or financial capital.

Question 5

Craft unions typically attempt to increase wage rates for their members by:

Accepted Answer

A)   organizing all of the employees in a factory or industry.
B)   opposing increases in the minimum wage that benefit nonunion workers.
C)   supporting regulations and policies that increase the price of complementary resources.
D)   restricting the supply of skilled workers through worker licensing and training requirements.

Question 6

Increased resource productivity will,ceteris paribus,increase a firm's demand for an input.

Accepted Answer

A) True 
 B)False

Question 7

The carpenters' union is an industrial union.

Accepted Answer

A) True 
 B)False

Question 8

Which would decrease the demand for a particular type of labor?

Accepted Answer

A)   An increase in the demand for the products produced by that type of labor
B)   An increase in the prices of the resources that are complements to that type of labor
C)   A decrease in the prices of those resources that are complements for that type of labor
D)   An increase in the wages of that type of labor

Question 9

Which would decrease a firm's demand for a particular resource?

Accepted Answer

A)   A decrease in the productivity of the resource
B)   A decrease in the price of the particular resource
C)   An increase in the demand for the firm's product
D)   An increase in the price of the product the resource produces

Question 10

A college graduate who works at a firm is also working part-time on a master's degree in business and expects to be paid a higher wage after earning the degree.The basic reason for this wage differential is:

Accepted Answer

A)   efficiency wages.
B)   compensating differences.
C)   investment in human capital.
D)   nonmonetary aspects of work.

Question 11

In monopsony situations,a minimum wage might increase wage and employment levels.

Accepted Answer

A) True 
 B)False

Question 12

If MRP < Wage rate,a firm should hire more workers.

Accepted Answer

A) True 
 B)False

Question 13

Equilibrium price differentials for productive resources:

Accepted Answer

A)   tend to be self-eliminating.
B)   may be caused by differences in the quality of those resources.
C)   are eliminated when the allocation of resources is in a state of equilibrium.
D)   are unrelated to differences in nonmonetary benefits.

Question 14

Other things being equal,the elasticity of demand for labor will be greater the:

Accepted Answer

A)   smaller the proportion of total costs accountable for by labor costs.
B)   smaller the elasticity of demand for the product it produces.
C)   larger the number of close substitute resources available.
D)   more rapid the decline in its marginal productivity.

Question 15

If the price of a product produced by an input decreases,the quantity demanded,but not demand,for the input will also decrease.

Accepted Answer

A) True 
 B)False

Question 16

If two resources are complementary,an increase in the price of one will increase the demand for the other.

Accepted Answer

A) True 
 B)False

Question 17

The lack of job information for workers would be an example of what explanation for wage differentials among workers?

Accepted Answer

A)   Noncompeting groups
B)   Compensating differences
C)   Market imperfections
D)   Principal-agent problems

Question 18

If all firms in an industry are price takers in the market for resource A,then:

Accepted Answer

A)   the price of resource A will increase if a single firm increases its output.
B)   more efficient firms will produce at levels where the marginal revenue product of the last unit of resource A is higher.
C)   less efficient firms will produce where the marginal revenue product of the last unit of resource A is higher.
D)   the marginal product of the last unit of resource A will be the same in all firms in the industry.

Question 19

y. B)  Wx. C)  Wz. D)  Cannot be determined." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph.An inclusive union or an industrial union will set the wage rate at:

Accepted Answer

A)   Wy.
B)   Wx.
C)   Wz.
D)   Cannot be determined.

Question 20

The major reason that presidents of major corporations receive an average salary of over $1 million a year and truck drivers receive an average salary of about $55,000 a year can best be explained by:

Accepted Answer

A)   discrimination.
B)   lack of job information.
C)   compensating differences.
D)   noncompeting labor groups.

Exam 10: Wage Determination

Other things being equal,the elasticity of demand for labor will be greater the:

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If MRP < Wage rate,a firm should hire more workers.

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In monopsony situations,a minimum wage might increase wage and employment levels.

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If two resources are complementary,an increase in the price of one will increase the demand for the other.

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A college graduate who works at a firm is also working part-time on a master's degree in business and expects to be paid a higher wage after earning the degree.The basic reason for this wage differential is:

Correct AnswerverifiedShow Answer

The reason that the supply curve for labor in a purely competitive market rises is because:

Correct AnswerverifiedShow Answer

Increased resource productivity will,ceteris paribus,increase a firm's demand for an input.

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Refer to the above graph.A monopsonist will set the wage at:

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The carpenters' union is an industrial union.

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If the price of a product produced by an input decreases,the quantity demanded,but not demand,for the input will also decrease.

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According to proponents of human capital theory,education:

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Which is an example of a change in the price of another resource that increases labor demand?

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If all firms in an industry are price takers in the market for resource A,then:

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Refer to the above graph.An inclusive union or an industrial union will set the wage rate at:

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Equilibrium price differentials for productive resources:

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Which would decrease a firm's demand for a particular resource?

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Which would decrease the demand for a particular type of labor?

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Craft unions typically attempt to increase wage rates for their members by:

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The lack of job information for workers would be an example of what explanation for wage differentials among workers?

Correct AnswerverifiedShow Answer

The major reason that presidents of major corporations receive an average salary of over $1 million a year and truck drivers receive an average salary of about $55,000 a year can best be explained by:

Correct AnswerverifiedShow Answer

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