Question 1

The evidence on how minimum wage laws affect the real world:

Accepted Answer

A)  is mixed.
B)  shows clearly that such price floors cause unemployment.
C)  shows clearly that there is simply a transfer of surplus from employer to worker.
D)  None of these statements is true.E) B) and D)
F) All of the above

Question 2

Julie works at a local hat factory for $12 an hour and typically works 40 hours a week.The company threatens layoffs,so Julie and the others agree to a pay cut.Julie now earns $10 an hour and works every hour over 40 that her boss will let her.Julie's response to this pay cut:

Accepted Answer

A)  was to work more,demonstrating a dominant income effect.
B)  was to work more,demonstrating a dominant price effect.
C)  was to work less,demonstrating a dominant income effect.
D)  was to work less,demonstrating a dominant price effect.E) A) and B)
F) None of the above

Question 3

The supply of labor is determined by the:

Accepted Answer

A)  number of workers.
B)  opportunity cost of hiring labor.
C)  marginal product of labor.
D)  All of these statements are true.E) B) and C)
F) A) and C)

Question 4

If the U.S.experiences an enormous surge of immigration,we could predict it would make the labor:

Accepted Answer

A)  supply increase and shift to the right.
B)  supply decrease and shift to the right.
C)  supply increase and shift to the left.
D)  supply decrease and shift to the left.E) A) and B)
F) C) and D)

Question 5

All factors of production usually experience:

Accepted Answer

A)  diminishing marginal productivity.
B)  decreasing average variable cost.
C)  decreasing average fixed costs.
D)  None of these is common to all factors of production.E) C) and D)
F) A) and B)

Question 6

The most common way for workers to hold market power is:

Accepted Answer

A)  when a monopsony exists.
B)  when workers are unionized.
C)  when they compete for minimum wage.
D)  when there are a lot of them.E) B) and D)
F) B) and C)

Question 7

If adopted by a firm,a labor-augmenting piece of technology is one that would:

Accepted Answer

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

Question 8

In the graph of supply and demand in the market for labor:

Accepted Answer

A)  individuals make up the demand curve.
B)  the equilibrium price of labor is generally denoted as L*.
C)  firms provide the demand.
D)  None of these statements is true.E) All of the above
F) A) and B)

Question 9

The labor-supply and labor-demand curves for the market intersect:

Accepted Answer

A)  at the equilibrium wage.
B)  above equilibrium price.
C)  at the number of unemployed people in the market.
D)  All of these statements are true.E) A) and C)
F) A) and D)

Question 10

In the market for the factor of production "labor":

Accepted Answer

A)  individuals are the sellers of the good.
B)  firms are the buyers of the good.
C)  the equilibrium price is called the wage.
D)  All of these statements are true.E) C) and D)
F) B) and D)

Question 11

In general,we can place all factors of production into which three categories?

Accepted Answer

A)  Land,labor,and capital
B)  Technology,land,and capital
C)  Land,labor,and technology
D)  Technology,labor,and capitalE) A) and D)
F) A) and C)

Question 12

If Jay receives a pay cut and the price effect outweighs the income effect on his labor supply decisions,he will:

Accepted Answer

A)  work more hours.
B)  work less hours.
C)  work the same amount.
D)  Cannot be determined without knowing the size of the pay cut.E) A) and D)
F) B) and C)

Question 13

A production function represents:

Accepted Answer

A)  the relationship between the quantity of inputs and the quantity of outputs.
B)  the relative values of the inputs and modes of production.
C)  the relative costs of the inputs across various modes of production.
D)  the relationship between the cost of the inputs and the revenue generated by the outputs.E) A) and B)
F) A) and C)

Question 14

Budget cuts which lead to more lax protection of our borders will affect the labor market in California.It will cause a ___________ in labor supply,resulting in __________.

Accepted Answer

A)  increase;lower wages
B)  decrease;higher wages
C)  increase;higher wages
D)  decrease;lower wagesE) A) and B)
F) A) and C)

Question 15

In a competitive labor market,if the demand for labor decreases,labor demand will shift:

Accepted Answer

A)  to the right and wages will increase.
B)  to the left and wages will increase.
C)  to the right and wages will decrease.
D)  to the left and wages will decrease.E) B) and C)
F) A) and B)

Question 16

Grace is headed to work at a catering business as a waitress for $100.Her sister Paige calls and asks her to go horseback riding instead.Grace decides to go to work,which implies Grace's opportunity cost of working is:

Accepted Answer

A)  greater than $100.
B)  less than $100.
C)  equal to $100.
D)  Cannot be determined without more information.E) A) and D)
F) A) and C)

Question 17

If it is a cultural norm to practice an afternoon "siesta" (nap) ,it is likely that the labor:

Accepted Answer

A)  demand in that culture would be relatively greater at any wage.
B)  demand in that culture would be relatively lower at any wage.
C)  supply in that culture would be relatively greater at any wage.
D)  supply in that culture would be relatively lower at any wage.E) A) and B)
F) A) and D)

Question 18

For a competitive firm,the value of output ___________ and the marginal product of labor ___________ with each additional worker hired.

Accepted Answer

A)  stays constant;decreases
B)  increases;decreases
C)  increases;increases
D)  decreases;stays constantE) B) and C)
F) A) and D)

Question 19

If Tony receives a pay raise and the price effect outweighs the income effect on his labor supply decisions,he will:

Accepted Answer

A)  work more hours.
B)  work less hours.
C)  work the same hours no matter what.
D)  quit and not work at all.E) A) and B)
F) C) and D)

Question 20

A monopsony is an example of:

Accepted Answer

A)  buyers holding market power.
B)  seller holding market power.
C)  an efficient market with no market power.
D)  Any of these could be true in a monopsony.E) A) and B)
F) B) and D)

Exam 16: The Factors of Production

The evidence on how minimum wage laws affect the real world:

Correct AnswerverifiedShow Answer

The labor-supply and labor-demand curves for the market intersect:

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Grace is headed to work at a catering business as a waitress for $100.Her sister Paige calls and asks her to go horseback riding instead.Grace decides to go to work,which implies Grace's opportunity cost of working is:

Correct AnswerverifiedShow Answer

If the U.S.experiences an enormous surge of immigration,we could predict it would make the labor:

Correct AnswerverifiedShow Answer

A monopsony is an example of:

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In general,we can place all factors of production into which three categories?

Correct AnswerverifiedShow Answer

In the graph of supply and demand in the market for labor:

Correct AnswerverifiedShow Answer

If it is a cultural norm to practice an afternoon "siesta" (nap) ,it is likely that the labor:

Correct AnswerverifiedShow Answer

Budget cuts which lead to more lax protection of our borders will affect the labor market in California.It will cause a ___________ in labor supply,resulting in __________.

Correct AnswerverifiedShow Answer

The supply of labor is determined by the:

Correct AnswerverifiedShow Answer

For a competitive firm,the value of output ___________ and the marginal product of labor ___________ with each additional worker hired.

Correct AnswerverifiedShow Answer

All factors of production usually experience:

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If Tony receives a pay raise and the price effect outweighs the income effect on his labor supply decisions,he will:

Correct AnswerverifiedShow Answer

Julie works at a local hat factory for $12 an hour and typically works 40 hours a week.The company threatens layoffs,so Julie and the others agree to a pay cut.Julie now earns $10 an hour and works every hour over 40 that her boss will let her.Julie's response to this pay cut:

Correct AnswerverifiedShow Answer

If Jay receives a pay cut and the price effect outweighs the income effect on his labor supply decisions,he will:

Correct AnswerverifiedShow Answer

A production function represents:

Correct AnswerverifiedShow Answer

In the market for the factor of production "labor":

Correct AnswerverifiedShow Answer

The most common way for workers to hold market power is:

Correct AnswerverifiedShow Answer

If adopted by a firm,a labor-augmenting piece of technology is one that would:

Correct AnswerverifiedShow Answer

In a competitive labor market,if the demand for labor decreases,labor demand will shift:

Correct AnswerverifiedShow Answer

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Budget cuts which lead to more lax protection of our borders will affect the labor market in California.It will cause a _ in labor supply,resulting in .

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For a competitive firm,the value of output _ and the marginal product of labor _ with each additional worker hired.

Correct Answer
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