Question 1

For a minimum wage to have any impact on a labor market, it must be set at a level

Accepted Answer

A)  Higher than the equilibrium wage.
B)  Higher than MPP.
C)  Higher than MRP.
D)  Consistent with economic growth.E) A) and D)
F) B) and D)

Question 2

Students who major in computer science are paid a lot more when they graduate than those who major in philosophy because

Accepted Answer

A)  The derived demand for computer science majors is less than the derived demand for philosophy majors.
B)  The marginal revenue product for computer science majors is less than the marginal revenue product for philosophy majors.
C)  The search for the meaning of life is a growth industry.
D)  Information technology is a growth industry.E) A) and C)
F) B) and C)

Question 3

If the elasticity of labor is 0.60, a 15 percent increase in the wage rate will induce a

Accepted Answer

A)  9.0 percent decrease in the quantity of labor supplied.
B)  9.0 percent increase in the quantity of labor supplied.
C)  4.0 percent decrease in the quantity of labor supplied.
D)  4.0 percent increase in the quantity of labor supplied.E) All of the above
F) A) and D)

Question 4

The most cost-efficient input is the one that can produce the most revenue per unit of input.

Accepted Answer

A) True 
 B)False

Question 5

The marginal revenue product sets an upper limit to the wage rate an employer will pay.

Accepted Answer

A) True 
 B)False

Question 6

The market supply of labor is

Accepted Answer

A)  The sum of all jobs created in the economy each year.
B)  Different for each individual based on training and education levels.
C)  The total of all goods produced in the economy each year.
D)  The amount of labor all workers supply at different wage rates.E) A) and B)
F) A) and C)

Question 7

If the wage rate drops, an employer will be willing to hire more workers, ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 8

Table 30.2 shows how many hairstyling appointments a hair salon can schedule per week based on the number of stylists.In the spaces provided, compute the marginal physical product (MPP)  of the hair stylists, total revenue, and marginal revenue product of the stylists, assuming that a hair stylist charges $60 per appointment.In Table 30.2, suppose a hairstylist is paid $600 per week.How many hairstylists should a profit-maximizing salon hire?

Accepted Answer

A)  1.
B)  2.
C)  3.
D)  4.E) A) and D)
F) B) and D)

Question 9

In general, it can be said that leisure is a "free good."

Accepted Answer

A) True 
 B)False

Question 10

Opportunity wage refers to the

Accepted Answer

A)  Income an individual loses when he or she quits a job.
B)  Highest wage an individual would earn in his or her best alternative job.
C)  Value of goods and services that could be purchased with a certain individual's income.
D)  Income equivalent of a volunteer worker.E) A) and D)
F) A) and B)

Question 11

The intersection of the labor market supply and market demand curves establishes the minimum wage.

Accepted Answer

A) True 
 B)False

Question 12

An effective minimum wage creates a surplus of labor and increases the level of unemployment.

Accepted Answer

A) True 
 B)False

Question 13

When a labor supply curve is backward-bending, the elasticity of labor supply in the backward-bending portion is

Accepted Answer

A)  Negative.
B)  Positive but less than 1.
C)  Greater than 1.
D)  Zero.E) A) and C)
F) All of the above

Question 14

Assume that the product price is $4 per unit and that the hourly wage for workers is $12.Neither price nor wage changes with output.In Table 30.1, how many workers should be hired?

Accepted Answer

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

Question 15

The marginal physical product of labor is equal to

Accepted Answer

A)  Total output divided by the quantity of labor.
B)  The percentage change in total output divided by the percentage change in quantity of labor.
C)  The change in total output divided by the change in quantity of labor.
D)  The change in total revenue associated with one additional unit of input.E) All of the above
F) A) and D)

Question 16

When the minimum wage is raised in a competitive market, ceteris paribus,

Accepted Answer

A)  All workers are better off.
B)  All workers are worse off.
C)  Some workers are better off and some are worse off.
D)  Workers are not affected by a minimum wage increase, only by decreases.E) None of the above
F) C) and D)

Question 17

The determinants of labor demand include

Accepted Answer

A)  Marginal physical productivity.
B)  Labor expectations.
C)  Labor shortages.
D)  The leisure-labor trade-off.E) None of the above
F) A) and D)

Question 18

When the minimum wage is set below the market equilibrium wage, it does not affect the market.

Accepted Answer

A) True 
 B)False

Question 19

Assume the apple market is competitive.If citizens want wages and the number of available jobs for apple pickers to increase, the best strategy would be to

Accepted Answer

A)  Insist that the government establish a minimum wage for apple pickers.
B)  Boycott apples until wages increased.
C)  Buy more apples.
D)  Insist that the sellers raise the price of apples.E) A) and B)
F) C) and D)

Question 20

If Amber is willing to work additional hours if her wage rate increases, the substitution effect must outweigh the income effect.

Accepted Answer

A) True 
 B)False

Exam 16: The Labor Market

Assume the apple market is competitive.If citizens want wages and the number of available jobs for apple pickers to increase, the best strategy would be to

Correct Answer
verified

When a labor supply curve is backward-bending, the elasticity of labor supply in the backward-bending portion is

Correct Answer
verified

The marginal revenue product sets an upper limit to the wage rate an employer will pay.

Correct Answer
verified

The intersection of the labor market supply and market demand curves establishes the minimum wage.

Correct Answer
verified

The most cost-efficient input is the one that can produce the most revenue per unit of input.

Correct Answer
verified

When the minimum wage is set below the market equilibrium wage, it does not affect the market.

Correct Answer
verified

The determinants of labor demand include

Correct Answer
verified

The market supply of labor is

Correct Answer
verified

If the wage rate drops, an employer will be willing to hire more workers, ceteris paribus.

Correct Answer
verified

If the elasticity of labor is 0.60, a 15 percent increase in the wage rate will induce a

Correct Answer
verified

Correct Answer
verified

The marginal physical product of labor is equal to

Correct Answer
verified

When the minimum wage is raised in a competitive market, ceteris paribus,

Correct Answer
verified

Opportunity wage refers to the

Correct Answer
verified

For a minimum wage to have any impact on a labor market, it must be set at a level

Correct Answer
verified

An effective minimum wage creates a surplus of labor and increases the level of unemployment.

Correct Answer
verified

Assume that the product price is $4 per unit and that the hourly wage for workers is $12.Neither price nor wage changes with output.In Table 30.1, how many workers should be hired?

Correct Answer
verified

In general, it can be said that leisure is a "free good."

Correct Answer
verified

Students who major in computer science are paid a lot more when they graduate than those who major in philosophy because

Correct Answer
verified

If Amber is willing to work additional hours if her wage rate increases, the substitution effect must outweigh the income effect.

Correct Answer
verified

Exam 16: The Labor Market

Assume the apple market is competitive.If citizens want wages and the number of available jobs for apple pickers to increase, the best strategy would be to

Correct AnswerverifiedShow Answer

When a labor supply curve is backward-bending, the elasticity of labor supply in the backward-bending portion is

Correct AnswerverifiedShow Answer

The marginal revenue product sets an upper limit to the wage rate an employer will pay.

Correct AnswerverifiedShow Answer

The intersection of the labor market supply and market demand curves establishes the minimum wage.

Correct AnswerverifiedShow Answer

The most cost-efficient input is the one that can produce the most revenue per unit of input.

Correct AnswerverifiedShow Answer

When the minimum wage is set below the market equilibrium wage, it does not affect the market.

Correct AnswerverifiedShow Answer

The determinants of labor demand include

Correct AnswerverifiedShow Answer

The market supply of labor is

Correct AnswerverifiedShow Answer

If the wage rate drops, an employer will be willing to hire more workers, ceteris paribus.

Correct AnswerverifiedShow Answer

If the elasticity of labor is 0.60, a 15 percent increase in the wage rate will induce a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The marginal physical product of labor is equal to

Correct AnswerverifiedShow Answer

When the minimum wage is raised in a competitive market, ceteris paribus,

Correct AnswerverifiedShow Answer

Opportunity wage refers to the

Correct AnswerverifiedShow Answer

For a minimum wage to have any impact on a labor market, it must be set at a level

Correct AnswerverifiedShow Answer

An effective minimum wage creates a surplus of labor and increases the level of unemployment.

Correct AnswerverifiedShow Answer

Assume that the product price is $4 per unit and that the hourly wage for workers is $12.Neither price nor wage changes with output.In Table 30.1, how many workers should be hired?

Correct AnswerverifiedShow Answer

In general, it can be said that leisure is a "free good."

Correct AnswerverifiedShow Answer

Students who major in computer science are paid a lot more when they graduate than those who major in philosophy because

Correct AnswerverifiedShow Answer

If Amber is willing to work additional hours if her wage rate increases, the substitution effect must outweigh the income effect.

Correct AnswerverifiedShow Answer

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