CHAPTER 13 HW Multiple Choice QuesTions

1.The supply and demand model predicts that minimum wage laws result in

A. wages of all workers to increase.

B. a shortage in the low-skilled labor market.

C.wages of skilled workers to fall.

D.unemployment among low-skilled workers.

2.Under a bilateral monopoly situation, price is most likely determined by

A.the invisible hand

B.supply and demand.

C.government mediators

D.bargaining.

3.The reaction of a firm to an increase in output price is illustrated by

A.a leftward shift of its labor demand curve.

B. a decrease in the quantity of labor demanded by the firm.

C.a rightward shift of its labor demand curve

D.an increase in the quantity of labor demanded by the firm.

4.For a competitive firm, marginal revenue product equals

A.dividing marginal revenue by output price.

B.multiplying marginal cost by output price.

C.multiplying marginal revenue by output price.

D.multiplying marginal product by output price.

5.Labor productivity is measured by

A.the average wage rate of workers.

B.total production divided by the number of firms.

C.output per hour of work.

D.the increase in output given one more day of work.

6.A competitive firm's labor demand curve is its

A.output demand curve.

B.wage curve.

C.marginal revenue product curve.

D.marginal product curve.

7.The real wage is

A.the amount of money a worker receives after taxes.

B.the wage workers are paid adjusted for interest rates.

C.always more than the nominal wage.

D.the wage workers are paid adjusted for inflation.

8.The backward-bending portion of the labor supply curve indicates that

A.workers are irrational.

B.income effect is stronger than the substitution effect.

C.wages are too low to provide workers an incentive to work.

D.substitution effect is stronger than the income effect.

9.A firm with market power in the output market adjusts its labor demand to equate the wage with

A.MRxMP.

B.PxMP.

C.PxMC.

D.PxMR.

10.If a company is the only buyer of all crude oil extracted in a region, then that company is called a

A.monopsony.

B.perfect competitor.

C.bilateral monopoly.

D.monopoly

11.The demand for labor depends on (Check all correct answers.)

A.supply of the product it produces.

B.supply of labor.

C.demand for the product it produces.

D.productivity of labor.

12.The change in total revenue due to one more unit of labor hired is called

A.marginal revenue product.

B.total product.

C.total revenue product.

D.marginal product.

13.Economists typically consider the alternative to work as

A.contemplation.

B.leisure.

C.labor input.

D.more work.

14.Human capital can be obtained through (Check all correct answers.)

A.upgrading equipment.

B.personal experience.

C.on-the-job training.

D.formal education.

15.According to the labor supply and labor demand model in the text, if labor productivity increases by 5 percent per year, we would expect

A.real wages to increase by 5 percent per year.

B.the number of jobs to increase by 5 percent per year.

C.no change in real or nominal wages.

D.nominal wages to increase by 5 percent per year.

16.Over the past 30 years, nominal wages

A.have increased faster than real wages.

B.and real wages both have stayed about the same.

C.have increased more slowly than real wages.

D.have increased at the same rate as real wages.

17.Unions can raise the wages of union members by

A.increasing the supply of labor in both unionizedand non-unionized industries.

B.requiring nonmembers to have jobs before they can join the union.

C.restricting the demand for labor in unionized industries.

D.restricting the supply for labor in unionized industries.

18.The supply and demand model predicts that minimum wage laws result in

A.wages of all workers to increase.

B.a shortage in the low-skilled labor market.

C.wages of skilled workers to fall.

D.unemployment among low-skilled workers.