Question 1

(Consider This)  The story about artist Pablo Picasso illustrates the point that

Accepted Answer

A)   the demand for labor is a derived demand.
B)   geographical immobility impedes an efficient allocation of labor resources.
C)   principal-agent problems can occur in unusual settings.
D)   present skills reflect past accumulations of human capital.E) A) and D)
F) None of the above

Question 2

A firm operating in a purely competitive labor market has the marginal revenue product schedule shown in the table.   WarkersMRP 1$24222320418516614712\begin{array}{l}\begin{array} { | c | c | } \hline	ext { Warkers}& 	ext {MRP }\\hline 1 & \$ 24 \\hline 2 & 22 \\hline 3 & 20 \\hline 4 & 18 \\hline 5 & 16 \\hline 6 & 14 \\hline 7 & 12 \\hline\end{array}\end{array} Warkers1234567​MRP $24222018161412​​​  If the wage rate decreases from $17 to $13, by how much will the firm expand employment?

Accepted Answer

A)   5 workers
B)   4 workers
C)   3 workers
D)   2 workers E) A) and B)
F) A) and C)

Question 3

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage) , its

Accepted Answer

A)   MRC curve is also upsloping.
B)   MRC curve is perfectly elastic.
C)   MRP curve is perfectly inelastic.
D)   MRP curve is also upsloping.E) All of the above
F) A) and D)

Question 4

Labor unions may attempt to raise wage rates by

Accepted Answer

A)   increasing the supply of labor.
B)   forcing employers, under the threat of a strike, to pay above-equilibrium wage rates.
C)   decreasing the demand for labor.
D)   increasing the price of complementary resources.E) A) and D)
F) B) and D)

Question 5

Wage differentials may result from all the following except

Accepted Answer

A)   differences in the nonmonetary aspects of various occupations.
B)   differences in the education and skills of workers.
C)   geographic and sociological immobility of workers.
D)   the tendency of qualified workers to move from lower pay jobs to higher pay jobs.E) A) and B)
F) A) and C)

Question 6

Real wages would rise if the

Accepted Answer

A)   prices of goods and services rose more rapidly than nominal-wage rates.
B)   prices of goods and services rose less rapidly than nominal-wage rates.
C)   prices of goods and services and wage rates both rose.
D)   prices of goods and services and wage rates both fell.E) A) and D)
F) A) and C)

Question 7

Real wages in the United States in the long run

Accepted Answer

A)   show no discernible relationship to output per worker.
B)   have increased at about the same rate as increases in output per worker.
C)   have increased slower than increases in output per worker.
D)   have increased faster than increases in output per worker.E) A) and B)
F) A) and C)

Question 8

If an exclusive union is successful in restricting the supply of labor, the

Accepted Answer

A)   wage rate will rise.
B)   quantity of labor demanded will rise.
C)   number of job opportunities in the firm or industry will increase.
D)   demand for labor curve will shift leftward.E) C) and D)
F) A) and C)

Question 9

Models that analyze how labor unions attempt to raise wage rates include the following, except the

Accepted Answer

A)   demand-enhancement model.
B)   exclusive union model.
C)   industrial union model.
D)   credit union model.E) All of the above
F) None of the above

Question 10

An example of a monopsonist is a labor union whose members include all the workers in a particular industry.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following involves the creation of human capital?

Accepted Answer

A)   The XYZ Corporation upgrades the machinery on its assembly line.
B)   Jones receives apprenticeship training as a carpenter.
C)   Smith buys 30 shares of common stock.
D)   A retired person decides to reenter the labor force.E) A) and C)
F) A) and B)

Question 12

According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S. dollar terms in 2013?

Accepted Answer

A)   Sweden
B)   Germany
C)   Australia
D)   United StatesE) B) and D)
F) B) and C)

Question 13

(Last Word)  Which of the following statements is true about occupational licensing in the United States?

Accepted Answer

A)   In the 1950s only about 5 percent of jobs required an occupational license; today about one-third of jobs require a license.
B)   The proportion of jobs requiring occupational licenses has remained relatively stable since the 1950s.
C)   Occupational licensing benefits consumers by reducing firms' costs and lowering output prices.
D)   Occupational licensing enhances employment opportunities for poorer workers.E) B) and C)
F) B) and D)

Question 14

Bilateral monopoly occurs where

Accepted Answer

A)   a monopsonistic employer bargains with an inclusive union.
B)   a monopsonistic employer bargains with an exclusive union.
C)   a craft union bargains with a purely competitive employer.
D)   an industrial union bargains with a purely competitive employer.E) A) and B)
F) A) and C)

Question 15

(Last Word)  Occupational licensing in the United States

Accepted Answer

A)   is required for a majority of jobs.
B)   is limited primarily to those jobs directly related to human health and safety.
C)   safeguards consumers in some industries, but in others is mostly a way to restrict entry and raise wages.
D)   has diminished in recent years as a result of industry deregulation.E) A) and B)
F) None of the above

Question 16

Firms that pay efficiency wages tend to have higher worker turnover.

Accepted Answer

A) True 
 B)False

Question 17

In monopsony,

Accepted Answer

A)   each firm employs a small portion of the total supply of labor.
B)   the workforce is highly mobile.
C)   the wage rate paid by the employer varies directly with the number of workers employed.
D)   the employer is a "wage taker."E) A) and B)
F) A) and C)

Question 18

Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?

Accepted Answer

A)   geographical immobility of workers
B)   readily available information about job opportunities and pay
C)   principal-agent problems
D)   compensating wage differentialsE) A) and C)
F) A) and B)

Question 19

Suppose a worker feels unhappy with his job and consequently quits. This illustrates

Accepted Answer

A)   the voice mechanism.
B)   featherbedding.
C)   the exit mechanism.
D)   blacklisting.E) None of the above
F) A) and C)

Question 20

The individual firm that hires labor under competitive conditions faces a labor supply curve that

Accepted Answer

A)   slopes downward to the right.
B)   is perfectly elastic.
C)   is perfectly inelastic.
D)   is of unit elasticity.E) All of the above
F) None of the above

Exam 17: Wage Determination

If an exclusive union is successful in restricting the supply of labor, the

Correct Answer
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Bilateral monopoly occurs where

Correct Answer
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If a firm faces an upsloping labor supply curve (and there is no union or minimum wage) , its

Correct Answer
verified

Suppose a worker feels unhappy with his job and consequently quits. This illustrates

Correct Answer
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An example of a monopsonist is a labor union whose members include all the workers in a particular industry.

Correct Answer
verified

Labor unions may attempt to raise wage rates by

Correct Answer
verified

Models that analyze how labor unions attempt to raise wage rates include the following, except the

Correct Answer
verified

Real wages in the United States in the long run

Correct Answer
verified

The individual firm that hires labor under competitive conditions faces a labor supply curve that

Correct Answer
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Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?

Correct Answer
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Which of the following involves the creation of human capital?

Correct Answer
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(Last Word) Occupational licensing in the United States

Correct Answer
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According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S. dollar terms in 2013?

Correct Answer
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Firms that pay efficiency wages tend to have higher worker turnover.

Correct Answer
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Correct Answer
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Wage differentials may result from all the following except

Correct Answer
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Real wages would rise if the

Correct Answer
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(Consider This) The story about artist Pablo Picasso illustrates the point that

Correct Answer
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In monopsony,

Correct Answer
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(Last Word) Which of the following statements is true about occupational licensing in the United States?

Correct Answer
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Exam 17: Wage Determination

If an exclusive union is successful in restricting the supply of labor, the

Correct AnswerverifiedShow Answer

Bilateral monopoly occurs where

Correct AnswerverifiedShow Answer

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage) , its

Correct AnswerverifiedShow Answer

Suppose a worker feels unhappy with his job and consequently quits. This illustrates

Correct AnswerverifiedShow Answer

An example of a monopsonist is a labor union whose members include all the workers in a particular industry.

Correct AnswerverifiedShow Answer

Labor unions may attempt to raise wage rates by

Correct AnswerverifiedShow Answer

Models that analyze how labor unions attempt to raise wage rates include the following, except the

Correct AnswerverifiedShow Answer

Real wages in the United States in the long run

Correct AnswerverifiedShow Answer

The individual firm that hires labor under competitive conditions faces a labor supply curve that

Correct AnswerverifiedShow Answer

Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?

Correct AnswerverifiedShow Answer

Which of the following involves the creation of human capital?

Correct AnswerverifiedShow Answer

(Last Word) Occupational licensing in the United States

Correct AnswerverifiedShow Answer

According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S. dollar terms in 2013?

Correct AnswerverifiedShow Answer

Firms that pay efficiency wages tend to have higher worker turnover.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Wage differentials may result from all the following except

Correct AnswerverifiedShow Answer

Real wages would rise if the

Correct AnswerverifiedShow Answer

(Consider This) The story about artist Pablo Picasso illustrates the point that

Correct AnswerverifiedShow Answer

In monopsony,

Correct AnswerverifiedShow Answer

(Last Word) Which of the following statements is true about occupational licensing in the United States?

Correct AnswerverifiedShow Answer

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