1.How can we explain the positive effect of a wage increase on employment? CH

a.Competitive labour market structure

b.Monopsony or efficiency wage theory or monopoly markets

c.This positive effect does not exist

d.We were wrong by thinking that labour demand is downward sloping

2.In the long run which of the following statements are false?

a.Profits are maximized

b.MPL = MPK

c.VMPL/ VMPK = w/r

d.MPL/MPK = w/r

3.Labour supply in straight time equivalent is ______ than overtime premium wage because of the ________

a.Less, larger substitution effect in overtime premium

b.Less, larger negative income effect

c.More, large substitution effect

d.More, smaller income effect

4.What is the impact of an increase in the magnitude of quasi-fixed labour costs on the demand curve of labour?

a.The demand curve shifts upwards and to the right

b.The demand curve become more elastic

c.There is no change to the demand curve

d.The demand curve shifts downwards and to the left