Question 1

Competitive markets tend to eliminate economic discrimination,but there are many historical examples of firms that hired few,or no,black or female workers.Which of the following is not a reason for the persistence of this form of discrimination?

Accepted Answer

A)   In many cases, white workers refused to work with black workers.
B)   Some white consumers were unwilling to buy from companies that employed black workers.
C)   If discrimination makes it difficult for a member of a group to be hired in a particular occupation, there is less incentive for members of the group to be trained to enter that occupation.
D)   Laws passed by the federal government made it more expensive to hire black or female workers. As a result, it was less expensive for employers to hire mostly white male workers.

Question 2

Along an upward sloping labor supply curve,as the wage rate increases,the opportunity cost of leisure ________,causing individuals to supply a ________ quantity of labor.

Accepted Answer

A)   increases; greater
B)   increases; lower
C)   decreases; greater
D)   remains constant, constant

Question 3

If the labor demand curve shifts to the right and the labor supply curve remains unchanged,what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.

Accepted Answer

The equilibrium wage will rise...

Question 4

If the market wage rate increases,a firm's labor demand curve does not shift but the labor supply curve shifts to the right.

Accepted Answer

A) True 
 B)False

Question 5

Scenario 17-1
In academia, professors in some disciplines receive higher salaries than others. For example, professors teaching in business schools receive higher salaries than professors in the English department. Suppose at Unity College, assistant professors in the business school earn $80,000 while assistant professors in the English department earn $50,000. Now suppose the government passes comparable worth legislation that requires academic institutions to pay all faculty the same salaries.
-Refer to Scenario 17-1.Following the passage of comparable worth legislation,Unity College responds by placing salaries at $65,000.Which of the following is the result of the legislation?

Accepted Answer

A)   The supply of English professors increases and the supply of business professors decreases.
B)   The demand for English professors decreases and the demand for business professors increases.
C)   There will be a surplus in the market for English professors and a shortage in the market for business professors.
D)   There will be a surplus in the market for English professors and the market for business professors will not be affected.

Question 6

Economic discrimination takes place when an employer

Accepted Answer

A)   pays workers the lowest wage possible.
B)   pays workers different wages on the basis of some arbitrary characteristics of workers that are irrelevant to the job performed.
C)   pays lower wages to workers who are not as productive as other workers.
D)   pays workers compensating wage differentials.

Question 7

Which of the following is an example of a compensating wage differential?

Accepted Answer

A)   Nurse anesthetists are paid less than anesthesiologists (who have medical degrees) .
B)   Workers in a dynamite mine receive higher wages than if they worked in other jobs that require the same level of skills.
C)   In the market for lawyers, top graduates from the top programs earn starting salaries that are significantly higher than the starting salaries earned by lower-ranked graduates from the lower-ranked programs.
D)   Popular movie stars like George Clooney command much higher salaries than other talented but lesser-known actors.

Question 8

Wage differences among workers of different races and gender could be due to all of the following except

Accepted Answer

A)   differences in preferences for jobs.
B)   differences in work experience.
C)   differences in education.
D)   labor unions.

Question 9

An organization of employees that has the legal right to bargain with employers about wages and working conditions is called a

Accepted Answer

A)   closed shop.
B)   guild.
C)   labor union.
D)   monopsony.

Question 10

The signaling hypothesis of education states that education is a costly activity that enhances a worker's productivity.

Accepted Answer

A) True 
 B)False

Question 11

The demand curve for labor is also

Accepted Answer

A)   the demand curve for the output produced with labor since the demand for labor is a derived demand.
B)   the marginal product of labor curve.
C)   the marginal revenue product of labor curve.
D)   the supply curve for the output labor is used to produce.

Question 12

A firm chooses its profit-maximizing quantity of capital by

Accepted Answer

A)   comparing the marginal revenue product of capital with the rental price of capital.
B)   comparing the price of capital with the price of labor.
C)   examining the total cost of capital equipment.
D)   determining the rate at which the firm can borrow funds to purchase plant and equipment.

Question 13

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If hiring another worker would increase output by three units per hour,then to maximize profits the firm should

Accepted Answer

A)   not change the number of workers it currently hires.
B)   not hire an additional worker.
C)   hire another worker.
D)   There is not enough information to answer the question.

Question 14

What is the signaling hypothesis of education?

Accepted Answer

The signaling hypothesis of education is...

Question 15

Which of the following is not a reason for firms to choose a salary system rather than a commission system to compensate their employees?

Accepted Answer

A)   Research has shown that most companies will find that a salary system will be more profitable than a commission system.
B)   It is often difficult to attribute output to particular workers.
C)   If workers are paid on the basis of the number of units of output they produce, they may become less concerned about quality.
D)   Commission compensation systems are riskier for employees than a salary system, and many workers dislike risk.

Question 16

What is a factor market?

Accepted Answer

A)   It is a market where financial instruments are traded.
B)   It is a market where stocks and bonds are traded.
C)   It is a market producers buy consumption and capital goods.
D)   It is a market where resources used to produce final goods are traded.

Question 17

What is the substitution effect of a wage increase? What is the income effect of a wage increase? Under what conditions will a worker's labor supply curve become downward sloping?

Accepted Answer

The substitution effect refers to the fa...

Question 18

Hotspur Incorporated,a manufacturer of microwaves,is a price taker in both the input and output markets.To maximize its profit,Hotspur will hire labor up to the point where

Accepted Answer

A)   the marginal product of labor is no longer positive.
B)   all economies of scale have been exhausted.
C)   the marginal revenue product of labor equals the wage rate.
D)   the marginal revenue product of labor equals the output price.

Question 19

Figure 17-4 0 to W1? A)  The income effect is larger than the substitution effect. B)  The substitution effect is larger than the income effect. C)  The income effect and the substitution effect are equal. D)  The supply curve is unit-elastic." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 17-4.Which of the following is true if the wage rate increases from W0 to W1?

Accepted Answer

A)   The income effect is larger than the substitution effect.
B)   The substitution effect is larger than the income effect.
C)   The income effect and the substitution effect are equal.
D)   The supply curve is unit-elastic.

Question 20

Table 17-1
 
-Refer to Table 17-1.The marginal product of the fourth unit of labor is

Accepted Answer

A)   300.
B)   75.
C)   60.
D)   15.

Exam 17: The Markets for Labor and Other Factors of Production

Which of the following is an example of a compensating wage differential?

Correct Answer
verified

Wage differences among workers of different races and gender could be due to all of the following except

Correct Answer
verified

Along an upward sloping labor supply curve,as the wage rate increases,the opportunity cost of leisure ,causing individuals to supply a quantity of labor.

Correct Answer
verified

What is the substitution effect of a wage increase? What is the income effect of a wage increase? Under what conditions will a worker's labor supply curve become downward sloping?

Correct Answer
verified
The substitution effect refers to the fa...
View Answer

Competitive markets tend to eliminate economic discrimination,but there are many historical examples of firms that hired few,or no,black or female workers.Which of the following is not a reason for the persistence of this form of discrimination?

Correct Answer
verified

Which of the following is not a reason for firms to choose a salary system rather than a commission system to compensate their employees?

Correct Answer
verified

Table 17-1 -Refer to Table 17-1.The marginal product of the fourth unit of labor is

Correct Answer
verified

If the market wage rate increases,a firm's labor demand curve does not shift but the labor supply curve shifts to the right.

Correct Answer
verified

What is a factor market?

Correct Answer
verified

The demand curve for labor is also

Correct Answer
verified

Economic discrimination takes place when an employer

Correct Answer
verified

An organization of employees that has the legal right to bargain with employers about wages and working conditions is called a

Correct Answer
verified

What is the signaling hypothesis of education?

Correct Answer
verified
The signaling hypothesis of education is...
View Answer

Hotspur Incorporated,a manufacturer of microwaves,is a price taker in both the input and output markets.To maximize its profit,Hotspur will hire labor up to the point where

Correct Answer
verified

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If hiring another worker would increase output by three units per hour,then to maximize profits the firm should

Correct Answer
verified

The signaling hypothesis of education states that education is a costly activity that enhances a worker's productivity.

Correct Answer
verified

Correct Answer
verified

A firm chooses its profit-maximizing quantity of capital by

Correct Answer
verified

If the labor demand curve shifts to the right and the labor supply curve remains unchanged,what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.

Correct Answer
verified
The equilibrium wage will rise...
View Answer

Figure 17-4 -Refer to Figure 17-4.Which of the following is true if the wage rate increases from W₀ to W₁?

Correct Answer
verified

Exam 17: The Markets for Labor and Other Factors of Production

Which of the following is an example of a compensating wage differential?

Correct AnswerverifiedShow Answer

Wage differences among workers of different races and gender could be due to all of the following except

Correct AnswerverifiedShow Answer

Along an upward sloping labor supply curve,as the wage rate increases,the opportunity cost of leisure ________,causing individuals to supply a ________ quantity of labor.

Correct AnswerverifiedShow Answer

What is the substitution effect of a wage increase? What is the income effect of a wage increase? Under what conditions will a worker's labor supply curve become downward sloping?

Correct AnswerverifiedThe substitution effect refers to the fa...View AnswerShow Answer

Competitive markets tend to eliminate economic discrimination,but there are many historical examples of firms that hired few,or no,black or female workers.Which of the following is not a reason for the persistence of this form of discrimination?

Correct AnswerverifiedShow Answer

Which of the following is not a reason for firms to choose a salary system rather than a commission system to compensate their employees?

Correct AnswerverifiedShow Answer

Table 17-1 -Refer to Table 17-1.The marginal product of the fourth unit of labor is

Correct AnswerverifiedShow Answer

If the market wage rate increases,a firm's labor demand curve does not shift but the labor supply curve shifts to the right.

Correct AnswerverifiedShow Answer

What is a factor market?

Correct AnswerverifiedShow Answer

The demand curve for labor is also

Correct AnswerverifiedShow Answer

Economic discrimination takes place when an employer

Correct AnswerverifiedShow Answer

An organization of employees that has the legal right to bargain with employers about wages and working conditions is called a

Correct AnswerverifiedShow Answer

What is the signaling hypothesis of education?

Correct AnswerverifiedThe signaling hypothesis of education is...View AnswerShow Answer

Hotspur Incorporated,a manufacturer of microwaves,is a price taker in both the input and output markets.To maximize its profit,Hotspur will hire labor up to the point where

Correct AnswerverifiedShow Answer

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input.If hiring another worker would increase output by three units per hour,then to maximize profits the firm should

Correct AnswerverifiedShow Answer

The signaling hypothesis of education states that education is a costly activity that enhances a worker's productivity.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A firm chooses its profit-maximizing quantity of capital by

Correct AnswerverifiedShow Answer

If the labor demand curve shifts to the right and the labor supply curve remains unchanged,what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.

Correct AnswerverifiedThe equilibrium wage will rise...View AnswerShow Answer

Figure 17-4 -Refer to Figure 17-4.Which of the following is true if the wage rate increases from W0 to W1?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Along an upward sloping labor supply curve,as the wage rate increases,the opportunity cost of leisure ,causing individuals to supply a quantity of labor.

Correct Answer
verified

Correct Answer
verified
The substitution effect refers to the fa...
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
verified

Correct Answer
verified
The signaling hypothesis of education is...
View Answer

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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The equilibrium wage will rise...
View Answer

Figure 17-4 -Refer to Figure 17-4.Which of the following is true if the wage rate increases from W₀ to W₁?

Correct Answer
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