Question 1

A higher marginal income tax rate reduces incentives to work because:

Accepted Answer

A)   leisure and other non-market activities aren't taxed, and so their relative price goes down.
B)   leisure and other non-market activities aren't taxed, and so their relative price goes up.
C)   the opportunity cost of leisure remains constant while after-tax wages fall.
D)   the opportunity cost of leisure increases with the marginal income tax rate.E) C) and D)
F) B) and D)

Question 2

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 3

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) B) and C)
F) All of the above

Question 4

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 B)
F) A) and C)

Question 5

If the government simultaneously increases marginal income tax rates and unemployment compensation, the:

Accepted Answer

A)   incentive to work will increase.
B)   incentive to work will diminish.
C)   incentive to work will not change.
D)   effect on the incentive to work cannot be predicted.E) A) and B)
F) A) and C)

Question 6

Refer to the graph shown. 1 to S2, the firm will: A)  reduce employment from q0 to q1 to maximize profit where MRP = W. B)  reduce employment from q1 to q2 to maximize profit where MRP = W. C)  raise employment from q1 to q0 to maximize profit where MRP = W. D)  raise employment from q2 to q1 to maximize profit where MRP = W." class="answers-bank-image d-inline" rel="preload" > If labor supply shifts from S1 to S2, the firm will:

Accepted Answer

A)   reduce employment from q0 to q1 to maximize profit where MRP = W.
B)   reduce employment from q1 to q2 to maximize profit where MRP = W.
C)   raise employment from q1 to q0 to maximize profit where MRP = W.
D)   raise employment from q2 to q1 to maximize profit where MRP = W.E) A) and C)
F) None of the above

Question 7

A monopsonist will pay a wage that:

Accepted Answer

A)   is greater than that in a perfectly competitive labor market.
B)   is the same as that in a perfectly competitive labor market.
C)   is less than that in a perfectly competitive labor market.
D)   may be greater than, less than, or equal to that in a perfectly competitive labor market, depending on labor supply.E) None of the above
F) A) and B)

Question 8

The incentive effect refers to how much a person will change his or her:

Accepted Answer

A)   hours worked in response to a change in the wage rate.
B)   wage rate in response to a change in productivity.
C)   quantity demanded of a taxed good in response to a change in the tax rate.
D)   wage rate in response to a change in the tax rate on earnings.E) C) and D)
F) A) and B)

Question 9

A firm's demand curve for labor services:

Accepted Answer

A)   is independent of the demand for the firm's output.
B)   will not change if technology changes.
C)   depends on the amount of other inputs used by the firm.
D)   is not related to the price of the firm's output.E) All of the above
F) B) and C)

Question 10

Refer to the graph shown.  Which curve represents the firm's derived demand for labor curve?

Accepted Answer

A)   D
B)   S1
C)   S2
D)   MRPE) All of the above
F) A) and B)

Question 11

Refer to the table shown.   Number wf Warkers  Tatal Praduct per Hour 124244360474584690792\begin{array}{l}\begin{array} { | c | c | } \hline	ext { Number wf Warkers } & 	ext { Tatal Praduct per Hour }\\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 Hour 24446074849092​​​  If the price per unit of product is $2 and the wage rate is $25, a profit-maximizing firm operating in competitive markets would hire:

Accepted Answer

A)   three workers.
B)   four workers.
C)   five workers.
D)   six workers. E) A) and C)
F) B) and C)

Question 12

Comparable worth laws are laws that mandate comparable pay for:

Accepted Answer

A)   people with comparable abilities.
B)   comparable work.
C)   everyone.
D)   people with comparable levels of seniority.E) A) and B)
F) A) and C)

Question 13

Suppose a firm is contractually obligated to pay workers $25 per hour despite the fact that the market-clearing wage is $19 per hour. If there are 500 qualified applicants but only 350 job openings, it is likely that:

Accepted Answer

A)   the firm will hire 350 workers at $25 per hour and 150 workers at $19 per hour.
B)   the firm will go bankrupt.
C)   jobs will have to be rationed in some way, and the firm may use non-job-related qualities to do so.
D)   the market eventually will clear at a wage rate between $19 and $25.E) A) and D)
F) None of the above

Question 14

Institutional discrimination exists when employers refuse to hire certain workers based on factors not related to job performance.

Accepted Answer

A) True 
 B)False

Question 15

A reduction in the supply of labor will cause wages to:

Accepted Answer

A)   decrease and employment to decrease.
B)   increase and employment to decrease.
C)   increase and employment to increase.
D)   decrease and employment to increase.E) All of the above
F) C) and D)

Question 16

An increase in the wages of truck drivers might be explained by which of the following factors?

Accepted Answer

A)   A reduction in the price of rail transportation
B)   An increase in competition within the trucking industry
C)   A reduction in the demand for transportation
D)   An increase in the price of gasolineE) None of the above
F) All of the above

Question 17

Researchers have found that family income of obese women is about 17 percent lower than that of women who are of the recommended weight. If researchers were able to demonstrate that there is no difference in the productivity of women who are obese and women who are of the recommended weight, this would suggest that the difference in income:

Accepted Answer

A)   is the result of discrimination.
B)   cannot be explained by discrimination.
C)   is due to differences in worker productivity.
D)   is a mistake in the survey.E) A) and D)
F) C) and D)

Question 18

When the National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union, it was an example of conflict:

Accepted Answer

A)   within a bilateral monopoly.
B)   within monopolistic competition.
C)   between monopsony on the employers' side and competition on the union's side.
D)   between unions and hockey fans.E) B) and D)
F) A) and D)

Question 19

Comparable worth laws can be justified by the fact that wages are determined exclusively by market forces.

Accepted Answer

A) True 
 B)False

Question 20

Comparable worth laws:

Accepted Answer

A)   always distort market outcomes because they interfere with the price mechanism.
B)   may correct institutional biases in the labor market.
C)   are necessary even when wages are completely determined by the interaction of labor supply and labor demand.
D)   are necessary even when institutional biases do not exist.E) B) and C)
F) C) and D)

Exam 17: Work and the Labor Market

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
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If the government simultaneously increases marginal income tax rates and unemployment compensation, the:

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

Correct Answer
verified

Comparable worth laws can be justified by the fact that wages are determined exclusively by market forces.

Correct Answer
verified

A higher marginal income tax rate reduces incentives to work because:

Correct Answer
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Suppose a firm is contractually obligated to pay workers $25 per hour despite the fact that the market-clearing wage is $19 per hour. If there are 500 qualified applicants but only 350 job openings, it is likely that:

Correct Answer
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A reduction in the supply of labor will cause wages to:

Correct Answer
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When the National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union, it was an example of conflict:

Correct Answer
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Comparable worth laws are laws that mandate comparable pay for:

Correct Answer
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Institutional discrimination exists when employers refuse to hire certain workers based on factors not related to job performance.

Correct Answer
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An increase in the wages of truck drivers might be explained by which of the following factors?

Correct Answer
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Comparable worth laws:

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

Correct Answer
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A firm's demand curve for labor services:

Correct Answer
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The incentive effect refers to how much a person will change his or her:

Correct Answer
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A monopsonist will pay a wage that:

Correct Answer
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Correct Answer
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Refer to the graph shown. If labor supply shifts from S₁ to S₂, the firm will:

Correct Answer
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Refer to the graph shown. Which curve represents the firm's derived demand for labor curve?

Correct Answer
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Exam 17: Work and the Labor Market

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

If the government simultaneously increases marginal income tax rates and unemployment compensation, the:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Comparable worth laws can be justified by the fact that wages are determined exclusively by market forces.

Correct AnswerverifiedShow Answer

A higher marginal income tax rate reduces incentives to work because:

Correct AnswerverifiedShow Answer

Suppose a firm is contractually obligated to pay workers $25 per hour despite the fact that the market-clearing wage is $19 per hour. If there are 500 qualified applicants but only 350 job openings, it is likely that:

Correct AnswerverifiedShow Answer

A reduction in the supply of labor will cause wages to:

Correct AnswerverifiedShow Answer

When the National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union, it was an example of conflict:

Correct AnswerverifiedShow Answer

Comparable worth laws are laws that mandate comparable pay for:

Correct AnswerverifiedShow Answer

Institutional discrimination exists when employers refuse to hire certain workers based on factors not related to job performance.

Correct AnswerverifiedShow Answer

An increase in the wages of truck drivers might be explained by which of the following factors?

Correct AnswerverifiedShow Answer

Comparable worth laws:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A firm's demand curve for labor services:

Correct AnswerverifiedShow Answer

The incentive effect refers to how much a person will change his or her:

Correct AnswerverifiedShow Answer

A monopsonist will pay a wage that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the graph shown. If labor supply shifts from S1 to S2, the firm will:

Correct AnswerverifiedShow Answer

Refer to the graph shown. Which curve represents the firm's derived demand for labor curve?

Correct AnswerverifiedShow Answer

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Refer to the graph shown. If labor supply shifts from S₁ to S₂, the firm will:

Correct Answer
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Correct Answer
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