Chapter 9 Economics

1.

Open Ended

30 sec

1 pt

The demand for labor

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Answer explanation

is derived from the demand for the final product.

2.

Open Ended

30 sec

1 pt

Which of the following statements is true about the demand for labor?

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Answer explanation

The demand for labor is downward sloping.

3.

Open Ended

30 sec

1 pt

The firm's labor demand curve is

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Answer explanation

its marginal revenue product curve.

4.

Open Ended

30 sec

1 pt

Which of the following is FALSE? -The worker's marginal revenue product is determined both by how much she adds to the firm's output and by the selling price of the product. -The wage rate in a perfectly competitive labor market is the firm's marginal factor cost of labor. -A higher wage rate reduces the worker's opportunity cost of leisure. -The demand for labor is derived from the demand for the final product.

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Answer explanation

A higher wage rate reduces the worker's opportunity cost of leisure.

5.

Open Ended

30 sec

1 pt

The demand for labor increases when

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Answer explanation

the productivity of labor rises.

6.

Open Ended

30 sec

1 pt

In which sector of the economy has union membership been increasing?

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Answer explanation

Among government employees.

7.

Open Ended

30 sec

1 pt

The demand for labor increases

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Answer explanation

when the selling price of the product increases.

8.

Open Ended

30 sec

1 pt

Other things equal, an increase in the productivity of labor will lead to

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Answer explanation

higher wages.

9.

Open Ended

30 sec

1 pt

The marginal physical product of labor

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Answer explanation

is the change in output that results from the hiring of an additional worker.

10.

Open Ended

30 sec

1 pt

The marginal revenue product of the firm

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Answer explanation

represents the last worker's contribution to the firm's total revenues.

11.

Open Ended

30 sec

1 pt

The marginal factor cost of labor for a firm facing a perfectly elastic supply of labor is

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OFF

Answer explanation

the wage rate.

12.

Open Ended

30 sec

1 pt

In a perfectly competitive situation, the firm will hire workers until

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Answer explanation

marginal revenue product equals the wage rate.

13.

Open Ended

30 sec

1 pt

The firm's demand for labor is the same as its

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Answer explanation

marginal revenue product curve.

14.

Open Ended

30 sec

1 pt

What assertion have economists Freeman and Medoff made about the effect of unions on the U.S. economy?

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Answer explanation

Unions have contributed to the stability of the labor force.

15.

Open Ended

30 sec

1 pt

To the extent that unions are effective at restricting the supply of labor,

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Answer explanation

they will increase wages for their members.

16.

Open Ended

30 sec

1 pt

Which one of the following is NOT a major determinant of income distribution in the U.S.? -Marginal productivity. -Political party affiliation. -Inheritance. -Discrimination.

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Answer explanation

Political party affiliation.

17.

Open Ended

30 sec

1 pt

The equilibrium wage rate is the wage at which -the quantity of labor supplied equals the quantity of labor demanded. -there is no shortage of labor. -there is no surplus of labor. -all of the above.

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Answer explanation

all of the above.

18.

Open Ended

30 sec

1 pt

What information is needed in order to calculate the marginal revenue product?

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Answer explanation

Marginal physical product and marginal revenue.

19.

Open Ended

30 sec

1 pt

How is a labor market affected by the imposition of a minimum wage above the equilibrium wage?

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Answer explanation

A surplus of labor results.

20.

Open Ended

30 sec

1 pt

In perfect competition, the firm maximizes profits by hiring the quantity of labor at which

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Answer explanation

marginal revenue product equals the wage rate.

21.

Open Ended

30 sec

1 pt

Suppose a firm sells its product for $10 per unit. When 22 workers are hired, total output is 172 units. When 23 workers are hired, total output is 182 units. What is the marginal revenue product of the 23rd worker?

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Answer explanation

$100

22.

Open Ended

30 sec

1 pt

How is the labor market equilibrium affected when there is an increase in the demand for labor?

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Answer explanation

The equilibrium wage increases, and the number of workers hired increases.

23.

Open Ended

30 sec

1 pt

What determines the slope of the labor supply curve?

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Answer explanation

The willingness of workers to trade income for leisure.

24.

Open Ended

30 sec

1 pt

The demand curve for labor is the firm's

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Answer explanation

marginal revenue product curve.

25.

Open Ended

30 sec

1 pt

An increase in the demand for a good produced by a competitive industry will cause

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OFF

Answer explanation

an increase in the market demand for labor.

26.

Open Ended

30 sec

1 pt

Your earnings in the labor market are

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Answer explanation

largely determined by your productivity on the job.

27.

Open Ended

30 sec

1 pt

In competitive markets, the equilibrium wage is

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Answer explanation

determined by the intersection of an upward sloping labor supply with a downward sloping labor demand.

28.

Open Ended

30 sec

1 pt

A firm facing a perfectly competitive labor market will hire workers up to the point at which

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OFF

Answer explanation

the wage rate equals marginal revenue product.

29.

Open Ended

30 sec

1 pt

Which of the following was NOT a goal of early unions in the U.S.? -To end child labor. -To shorten the length of the workday. -To improve wages and working conditions. -To establish a minimum wage.

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Answer explanation

To establish a minimum wage.

30.

Open Ended

30 sec

1 pt

Who founded the American Federation of Labor?

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Answer explanation

Samuel Gompers.

31.

Open Ended

30 sec

1 pt

Which of the following is FALSE? -Your investment in human capital is an important determinant of your productivity and therefore is an important determinant of your earnings. -A minimum wage imposed above the equilibrium wage will generate unemployment. -Strike activity has increased in the U.S. over recent decades as union membership has been on the increase. -Unions seek to restrict the supply of labor so as to increase wages for members.

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OFF

Answer explanation

Strike activity has increased in the U.S. over recent decades as union membership has been on the increase.

32.

Open Ended

30 sec

1 pt

Which of the following is TRUE? -An increase in the productivity of IT professionals will decrease the demand for their services. -A increase in the price of handcrafted furniture will decrease the demand for workers who make the furniture. -The demand for labor is derived from demand for the final product. -The slope of the labor supply curve is determined by the level of human capital investment workers have undertaken.

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Answer explanation

The demand for labor is derived from demand for the final product.

33.

Open Ended

30 sec

1 pt

If the marginal revenue product of labor is less than the wage rate, the perfectly competitive firm will

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Answer explanation

decrease employment.

34.

Open Ended

30 sec

1 pt

Which of the following will not shift the supply of labor? -Changes that make leisure time relatively more valuable to workers. -Changes in working conditions. -An increase in the wage rate. -A significant increase in the relative wages paid in a related industry.

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Answer explanation

An increase in the wage rate.

35.

Open Ended

30 sec

1 pt

All of the following can cause the demand curve for labor to shift to the right except -an increase in the productivity of labor. -an increase in the supply of labor. -an increase in the demand for the final product. -an increase in the price of the final product.

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OFF

Answer explanation

an increase in the supply of labor.

36.

Open Ended

30 sec

1 pt

If a minimum wage is imposed above the equilibrium wage,

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OFF

Answer explanation

the quantity of labor supplied will exceed the quantity of labor demanded.

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