Question 1

According to international comparisons,which nation had the highest hourly pay in U.S.dollar terms in 2011?

Accepted Answer

A)   United States.
B)   Germany.
C)   Denmark.
D)   Sweden.E) A) and C)
F) All of the above

Question 2

According to age-earnings data,

Accepted Answer

A)   lower-educated workers have similar earnings at age 65 as higher-educated workers.
B)   investments in education result in higher earnings.
C)   high earnings are due to motivation and innate ability,rather than education.
D)   there is no clear relationship between education and worker productivity.E) B) and C)
F) A) and D)

Question 3

If the nominal wage rises by 6 percent,and the price level falls by 2 percent,the real wage will:

Accepted Answer

A)   be unaffected.
B)   rise by 4 percent.
C)   fall by 4 percent.
D)   rise by 8 percent.E) All of the above
F) A) and D)

Question 4

A profit-maximizing firm will:

Accepted Answer

A)   expand employment if marginal revenue product exceeds marginal resource cost.
B)   reduce employment if marginal revenue product exceeds marginal resource cost.
C)   expand employment if marginal revenue product equals marginal resource cost.
D)   reduce employment if marginal revenue product equals marginal resource cost.E) A) and B)
F) B) and D)

Question 5

Since 1960,real hourly compensation in the United States has approximately:

Accepted Answer

A)   remained the same.
B)   risen by 40 percent.
C)   doubled.
D)   tripled.E) A) and C)
F) A) and D)

Question 6

Jack and Jill have identical skills and training,but Jill earns higher wages in her job.Which of the following reasons would best explain why Jill earns more than Jack?

Accepted Answer

A)   Jack has a chronic illness and would lose health care coverage if he changed jobs.
B)   Jill suffers from gender discrimination in the workplace.
C)   Jack has better access to information about available jobs in his field.
D)   Jill is reluctant to move to a new city because she wants to live near family.E) B) and C)
F) B) and D)

Question 7

Marginal resource (labor)cost will exceed the wage rate when there is imperfect competition in the hire of labor.

Accepted Answer

A) True 
 B)False

Question 8

The earnings of highly educated workers:

Accepted Answer

A)   rise more slowly than those of less-educated workers.
B)   rise more rapidly than those of less-educated workers.
C)   rise at about the same rate as those of less-educated workers.
D)   stagnate earlier than do those of less-educated workers.E) B) and C)
F) All of the above

Question 9

A monopsonistic employer:

Accepted Answer

A)   has a perfectly elastic labor supply curve.
B)   is necessarily a monopolist in the product market.
C)   confronts a marginal resource (labor) cost that is greater than the wage rate.
D)   confronts a marginal resource (labor) cost that is less than the wage rate.E) None of the above
F) A) and D)

Question 10

Which of the following is most likely to be an example of monopsony?

Accepted Answer

A)   The market for fast-food workers in a large summer resort town.
B)   The market for card dealers in Las Vegas.
C)   The market for Major League Baseball umpires.
D)   The market for retail sales clerks in a major city.E) A) and B)
F) A) and C)

Question 11

Noncompeting groups of workers are the result of geographic immobilities.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is correct?

Accepted Answer

A)   The federal government can delay any strike for 80 days.
B)   About 3 percent of total work time is lost in the United States because of strikes.
C)   Work time lost may overstate the cost of a strike if the work stoppage disrupts production in related industries.
D)   Work time lost may overstate the cost of a strike if nonstruck firms increase their production.E) All of the above
F) None of the above

Question 13

There is no evidence that unions are able to increase wage rates above those that the market would otherwise provide.

Accepted Answer

A) True 
 B)False

Question 14

Suppose all workers are identical but working for Ajax is more pleasant than working for Acme.In all other nonwage aspects,the two firms offer the same job characteristics.We would expect:

Accepted Answer

A)   wage rates at Ajax to be higher than at Acme.
B)   wage rates at Ajax to be lower than at Acme.
C)   wage rates at Ajax and Acme to be the same.
D)   workers at Ajax would have to be monitored more closely than those at Acme.E) None of the above
F) All of the above

Question 15

The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

Accepted Answer

A) True 
 B)False

Question 16

Marginal revenue product (MRP) of labor refers to the:

Accepted Answer

A)   increase in total revenue resulting from the sale of an additional unit of output.
B)   amount by which a firm's total resource cost increases when it employs one more unit of labor.
C)   increase in total revenue resulting from the hire of one more unit of labor.
D)   price at which additional units of labor can be employed in a monopsonized labor market.E) B) and D)
F) B) and C)

Question 17

In which of the following U.S.industries is the rate of unionization the highest?

Accepted Answer

A)   Construction.
B)   Government.
C)   Transportation.
D)   Agriculture.E) A) and D)
F) None of the above

Question 18

The economic term for a firm that is the sole buyer in a market is:

Accepted Answer

A)   monopsonist.
B)   monopolist.
C)   bilateral competitor.
D)   bilateral monopolist.E) A) and B)
F) A) and C)

Question 19

Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode,New Mexico.Also,suppose that this labor force is highly immobile.Economists would describe this employer as a:

Accepted Answer

A)   monopolist.
B)   oligopolist.
C)   monopsonist.
D)   monopolistic competitor.E) B) and C)
F) A) and D)

Question 20

Which of the following is correct?

Accepted Answer

A)   The nominal wage may fall,but the real wage can never decline.
B)   The real wage may fall,but the nominal wage can never decline.
C)   Both the nominal and the real wage must always rise.
D)   The nominal and the real wage may both fall.E) A) and B)
F) None of the above

Exam 16: Wage Determination

Which of the following is correct?

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Which of the following is correct?

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Since 1960,real hourly compensation in the United States has approximately:

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There is no evidence that unions are able to increase wage rates above those that the market would otherwise provide.

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Marginal revenue product (MRP) of labor refers to the:

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Jack and Jill have identical skills and training,but Jill earns higher wages in her job.Which of the following reasons would best explain why Jill earns more than Jack?

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Which of the following is most likely to be an example of monopsony?

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Marginal resource (labor)cost will exceed the wage rate when there is imperfect competition in the hire of labor.

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In which of the following U.S.industries is the rate of unionization the highest?

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A monopsonistic employer:

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A profit-maximizing firm will:

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Suppose all workers are identical but working for Ajax is more pleasant than working for Acme.In all other nonwage aspects,the two firms offer the same job characteristics.We would expect:

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The economic term for a firm that is the sole buyer in a market is:

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The earnings of highly educated workers:

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According to international comparisons,which nation had the highest hourly pay in U.S.dollar terms in 2011?

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Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode,New Mexico.Also,suppose that this labor force is highly immobile.Economists would describe this employer as a:

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According to age-earnings data,

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Noncompeting groups of workers are the result of geographic immobilities.

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The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

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If the nominal wage rises by 6 percent,and the price level falls by 2 percent,the real wage will:

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