Question 1

Some suggest that many New York taxi drivers set an income goal for the week and finish work once they have achieved that goal. Since the effective hourly wage is higher on busy days, choosing to stop working when a particular income goal is reached is:

Accepted Answer

A)  consistent with an upward-sloping labor supply curve since the quantity of labor supplied is higher when the wage is higher.
B)  consistent with an upward-sloping labor supply curve since the quantity of labor supplied is lower when the wage is higher.
C)  inconsistent with an upward-sloping labor supply curve since the quantity of labor supplied is lower when the wage is higher.
D)  inconsistent with an upward-sloping labor supply curve since the quantity of labor supplied is higher when the wage is higher.E) All of the above
F) A) and B)

Question 2

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

Accepted Answer

A)  an increase in labor demand.
B)  an increase in labor supply.
C)  a decrease in labor demand.
D)  a decrease in labor supply.E) A) and B)
F) A) and C)

Question 3

According to the author, the development of complex algorithms that perform "brain work" in the future is most likely to:

Accepted Answer

A)  shorten the overall workweek.
B)  reduce overall employment.
C)  make the distribution of income more equal.
D)  make the distribution of income less equal.E) A) and D)
F) B) and D)

Question 4

A decrease in the wages of truck drivers might be explained by which of the following factors?

Accepted Answer

A)  An increase in the price of gasoline
B)  An increase in competition within the trucking industry
C)  An increase in the demand for transportation
D)  An increase in the cost of air freightE) B) and C)
F) A) and B)

Question 5

If increasing the hourly wage rate from $10 to $15 causes a worker to work 50 hours rather than 40, the worker's elasticity of labor supply is equal to:

Accepted Answer

A)  0.05.
B)  1.8.
C)  0.50.
D)  2.E) A) and C)
F) None of the above

Question 6

The labor supply curve is generally considered to be upward-sloping because the opportunity cost of leisure:

Accepted Answer

A)  increases as wages get higher.
B)  decreases as wages get higher.
C)  remains unchanged as wages get higher.
D)  has nothing to do with wages.E) B) and C)
F) All of the above

Question 7

When wages rise:

Accepted Answer

A)  the quantity of labor supplied always declines.
B)  neither the opportunity cost of an hour of leisure nor the quantity of labor supplied is likely to change.
C)  the opportunity cost of an hour of leisure declines.
D)  the opportunity cost of an hour of leisure increases.E) A) and D)
F) B) and C)

Question 8

Refer to the graphs shown. 1 to D2, causing the product price to increase, firm A (a supplier of this product) will: A) pay a higher wage rate and reduce employment from q2 to q1. B) pay a lower wage rate and increase employment from q3 to q4. C) increase employment because its MRP curve will shift rightward. D) decrease employment because its MRP curve will shift leftward." class="answers-bank-image d-inline" rel="preload" > If product demand increases from D1 to D2, causing the product price to increase, firm A (a supplier of this product) will:

Accepted Answer

A)  pay a higher wage rate and reduce employment from q2 to q1.
B)  pay a lower wage rate and increase employment from q3 to q4.
C)  increase employment because its MRP curve will shift rightward.
D)  decrease employment because its MRP curve will shift leftward.E) A) and B)
F) None of the above

Question 9

According to economic theory, which of the following types of discrimination is the easiest to eliminate?

Accepted Answer

A)  Discrimination based on individual characteristics that affect job performance
B)  Discrimination based on correctly perceived statistical characteristics of a group
C)  Discrimination that saves the firm money
D)  Discrimination based on individual characteristics that do not affect job performanceE) A) and C)
F) B) and C)

Question 10

What is the cost minimization condition?

Accepted Answer

The cost minimization condition is the r...

Question 11

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) All of the above
F) A) and D)

Question 12

When wages rise, the opportunity cost of:

Accepted Answer

A)  labor falls.
B)  labor rises.
C)  leisure falls.
D)  leisure rises.E) All of the above
F) B) and C)

Question 13

The more elastic the demand for the good labor produces, the less elastic the demand for labor.

Accepted Answer

A) True 
 B)False

Question 14

If the quantity of labor supplied increases by 5 percent when the wage increases by 10 percent, the elasticity of labor supply is:

Accepted Answer

A)  1/5.
B)  1/2.
C)  2.
D)  5.E) B) and D)
F) C) and D)

Question 15

Historically, technology has:

Accepted Answer

A)  improved and the demand for labor has decreased as output has increased.
B)  improved and the demand for labor has increased as output has increased.
C)  worsened and the demand for labor has decreased as output has decreased.
D)  worsened and the demand for labor has increased as output has decreased.E) B) and D)
F) B) and C)

Question 16

After adjusting for institutional factors, economists have found that:

Accepted Answer

A)  institutional factors explain all of the pay difference between men and women.
B)  workplace discrimination explains all of the pay difference between men and women.
C)  institutional factors explain some of the lower pay that women receive, but workplace discrimination also appears to play a role.
D)  there is no discrimination; all of the pay difference between men and women can be explained by differences in education and experience.E) A) and B)
F) A) and C)

Question 17

Other things held constant in a competitive labor market, if workers negotiate a contract in which the employer agrees to pay an hourly wage rate of $17.85 while the market equilibrium hourly wage rate is $16.50, the:

Accepted Answer

A)  quantity of workers supplied will exceed the quantity of workers demanded.
B)  quantity of workers demanded will exceed the quantity of workers supplied.
C)  demand for labor will increase until the equilibrium wage rate is $17.85.
D)  supply of labor will decrease until the equilibrium wage rate is $17.85.E) B) and C)
F) A) and D)

Question 18

Institutional discrimination exists when:

Accepted Answer

A)  discrimination is based on individual characteristics related to job performance.
B)  discrimination is based on individual characteristics not related to job performance.
C)  the structure of a job makes it difficult for certain groups of individuals to succeed.
D)  discrimination is based on correctly perceived statistical characteristics of a group.E) B) and C)
F) A) and D)

Question 19

All of the following are possible explanations for the fact that on average women earn lower wages than men in the United States except:

Accepted Answer

A)  women choose to work in low-wage industries.
B)  women are more productive than men on average.
C)  women enter and leave the labor force more frequently than men, causing them on average to have less experience and a lower productivity than men.
D)  women are discriminated against in labor markets.E) B) and D)
F) A) and C)

Question 20

If the law of diminishing marginal product holds true and workers emigrate from Haiti, the marginal product of the workers remaining in Haiti will:

Accepted Answer

A)  rise because more workers are working with the same amount of capital.
B)  rise because fewer workers are working with the same amount of capital.
C)  fall because more workers are working with the same amount of capital.
D)  fall because fewer workers are working with the same amount of capital.E) A) and B)
F) A) and C)

Exam 17: Work and the Labor Market

Some suggest that many New York taxi drivers set an income goal for the week and finish work once they have achieved that goal. Since the effective hourly wage is higher on busy days, choosing to stop working when a particular income goal is reached is:

Correct AnswerverifiedShow Answer

When wages rise:

Correct AnswerverifiedShow Answer

A decrease in the wages of truck drivers might be explained by which of the following factors?

Correct AnswerverifiedShow Answer

Historically, technology has:

Correct AnswerverifiedShow Answer

What is the cost minimization condition?

Correct AnswerverifiedThe cost minimization condition is the r...View AnswerShow Answer

Other things held constant in a competitive labor market, if workers negotiate a contract in which the employer agrees to pay an hourly wage rate of $17.85 while the market equilibrium hourly wage rate is $16.50, the:

Correct AnswerverifiedShow Answer

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

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The more elastic the demand for the good labor produces, the less elastic the demand for labor.

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If the law of diminishing marginal product holds true and workers emigrate from Haiti, the marginal product of the workers remaining in Haiti will:

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The labor supply curve is generally considered to be upward-sloping because the opportunity cost of leisure:

Correct AnswerverifiedShow Answer

All of the following are possible explanations for the fact that on average women earn lower wages than men in the United States except:

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When wages rise, the opportunity cost of:

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Institutional discrimination exists when:

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Refer to the graphs shown. If product demand increases from D1 to D2, causing the product price to increase, firm A (a supplier of this product) will:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

After adjusting for institutional factors, economists have found that:

Correct AnswerverifiedShow Answer

If the quantity of labor supplied increases by 5 percent when the wage increases by 10 percent, the elasticity of labor supply is:

Correct AnswerverifiedShow Answer

According to economic theory, which of the following types of discrimination is the easiest to eliminate?

Correct AnswerverifiedShow Answer

If increasing the hourly wage rate from $10 to $15 causes a worker to work 50 hours rather than 40, the worker's elasticity of labor supply is equal to:

Correct AnswerverifiedShow Answer

According to the author, the development of complex algorithms that perform "brain work" in the future is most likely to:

Correct AnswerverifiedShow Answer

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The cost minimization condition is the r...
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Refer to the graphs shown. If product demand increases from D₁ to D₂, causing the product price to increase, firm A (a supplier of this product) will:

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