Question 1

The optimal hiring rule is to employ labor up to the point where:

Accepted Answer

A)   wage = MFC.
B)   wage = MP.
C)   wage = MR
D)   wage = MRP
E)   wage = TWC.F) C) and E)
G) A) and D)

Question 2

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would cause the demand for labor to change?

Accepted Answer

A)   c and e.
B)   A change in the cost of living.
C)   Changes in the wage rate.
D)   Movements along the labor demand curve.
E)   A change in the price of the good produced.F) A) and E)
G) C) and D)

Question 4

When a firm hires an additional unit of labor, the increase in a firm's total revenues is known as the marginal:

Accepted Answer

A)   cost.
B)   product.
C)   utility product.
D)   revenue product.E) C) and D)
F) B) and D)

Question 5

Which of the following might increase the supply curve of labor?

Accepted Answer

A)   Increasing licensing requirements.
B)   Increasing discrimination against females.
C)   Increasing discrimination against blacks.
D)   All of the above.
E)   None of the above.F) B) and C)
G) A) and C)

Question 6

The government defines poverty as an income level less than four times the cost of a minimal diet.

Accepted Answer

A) True 
 B)False

Question 7

An increase in the demand for a product will shift the demand curve for labor producing the product to the left.

Accepted Answer

A) True 
 B)False

Question 8

The poverty line:

Accepted Answer

A)   separates those on welfare from those not on welfare.
B)   equals three times an economy food budget.
C)   equals the median income level.
D)   all of the above.E) B) and C)
F) A) and D)

Question 9

The poorest 20 percent of the U.S. population received approximately ____ of total income?

Accepted Answer

A)   5 percent
B)   10 percent
C)   15 percent
D)   20 percentE) A) and C)
F) A) and D)

Question 10

A union can influence the demand for labor by:

Accepted Answer

A)   requiring union fees.
B)   raising union fees.
C)   effective advertising that convinces customers to buy the "union label."
D)   all of the above.E) B) and D)
F) B) and C)

Question 11

The marginal revenue product of labor is:

Accepted Answer

A)   how much labor can be purchased with the revenue from the sale of one more unit of the good.
B)   how much does the marginal revenue change when you add more labor.
C)   the same as the marginal revenue product of capital in equilibrium.
D)   determined by the wage rate.
E)   the contribution to total revenue made by the marginal laborer.F) B) and C)
G) B) and D)

Question 12

Which of the following statements concerning the supply of labor is true ?

Accepted Answer

A)   The supply of labor is determined by the prevailing wage rate.
B)   The labor supply curve is downward sloping.
C)   The wage rate has no effect on the supply of labor.
D)   None of the above.E) A) and D)
F) All of the above

Question 13

Wage discrimination means minority workers are paid unequal wages.

Accepted Answer

A) True 
 B)False

Question 14

A decrease in the marginal product of labor would be represented by:

Accepted Answer

A)   increase in labor demand.
B)   decrease in labor demand.
C)   increase in the quantity demanded of labor.
D)   decrease in the quantity demanded of labor.
E)   an increase in wages.F) A) and B)
G) A) and D)

Question 15

Which one of the following examples is a cash assistance program used to fight poverty in the United States?

Accepted Answer

A)   Medicaid.
B)   SNAP (food stamps) .
C)   Home energy assistance.
D)   Head Start.
E)   Temporary Assistance to Needy Families (TANF) .F) C) and D)
G) A) and D)

Question 16

Since 1929, the distribution of income in the United States has become:

Accepted Answer

A)   substantially more equal.
B)   slightly more equal.
C)   slightly more unequal.
D)   substantially more unequal.E) C) and D)
F) A) and C)

Question 17

If the market price of bicycle frames is $500, and frame welders earn a wage of $50, how many welders will be hired?

Accepted Answer

A)   10.
B)   More than 10.
C)   Fewer than 10.
D)   Hiring will stop when the MP is 10.
E)   Hiring will stop when the MP is 0.1.F) A) and E)
G) A) and B)

Question 18

Troll Corporation sells dolls for $10.00 each in a market that is perfectly competitive. Increasing the number of workers from 100 to 101 would cause output to rise from 500 to 550 dolls per day. The marginal revenue product for the 101st worker is:

Accepted Answer

A)   $10.00.
B)   $500.
C)   $5,000.
D)   $1,010.E) A) and D)
F) All of the above

Question 19

Which of the following can shift the labor demand curve to the right?

Accepted Answer

A)   Decrease in product price.
B)   Increase in wages.
C)   Decrease in wages.
D)   Decrease in the MP.
E)   Increase in productivity.F) A) and E)
G) B) and C)

Question 20

Exhibit 10-1  Labor and output data  In Exhibit 10-1, if product price is fixed at $8, the MRP of the 5th worker is equal to:

Accepted Answer

A)   $50.
B)   $80.
C)   $10.
D)   $100
E)   $160.F) C) and E)
G) B) and C)

Exam 10: Labor Markets and Income Distribution

When a firm hires an additional unit of labor, the increase in a firm's total revenues is known as the marginal:

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Which of the following statements concerning the supply of labor is true ?

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Which one of the following examples is a cash assistance program used to fight poverty in the United States?

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An increase in the demand for a product will shift the demand curve for labor producing the product to the left.

Correct AnswerverifiedShow Answer

The optimal hiring rule is to employ labor up to the point where:

Correct AnswerverifiedShow Answer

A union can influence the demand for labor by:

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Since 1929, the distribution of income in the United States has become:

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A decrease in the marginal product of labor would be represented by:

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Which of the following would cause the demand for labor to change?

Correct AnswerverifiedShow Answer

Exhibit 10-1 Labor and output data In Exhibit 10-1, if product price is fixed at $8, the MRP of the 5th worker is equal to:

Correct AnswerverifiedShow Answer

The marginal revenue product of labor is:

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The poverty line:

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The government defines poverty as an income level less than four times the cost of a minimal diet.

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Which of the following might increase the supply curve of labor?

Correct AnswerverifiedShow Answer

The poorest 20 percent of the U.S. population received approximately ____ of total income?

Correct AnswerverifiedShow Answer

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.

Correct AnswerverifiedShow Answer

Troll Corporation sells dolls for $10.00 each in a market that is perfectly competitive. Increasing the number of workers from 100 to 101 would cause output to rise from 500 to 550 dolls per day. The marginal revenue product for the 101st worker is:

Correct AnswerverifiedShow Answer

Which of the following can shift the labor demand curve to the right?

Correct AnswerverifiedShow Answer

If the market price of bicycle frames is $500, and frame welders earn a wage of $50, how many welders will be hired?

Correct AnswerverifiedShow Answer

Wage discrimination means minority workers are paid unequal wages.

Correct AnswerverifiedShow Answer

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