Part A:

1.The market demand curve for labor

a.is a vertical line at the quantity equal to the current supply of labor available

b.is a horizontal line at the current market wage rate

c.has a downward slope

d.has an upward slope

2.In the labor market, human capital refers to the

a.skills and abilities an employee has

b.equipment that is operated by people

c.equipment that can be used to replace people

d.ability of a firm to quickly hire new workers

3.When discussing real versus nominal wages, what is true?

a.Real wages are what people can actually earn, and nominal wages are what they would like to earn

b.Real wages are after-tax wages and nominal wages are before-tax wages

c.Real wages are measured in dollars and nominal wages are other benefits such as health insurance

d.Real wages are adjusted for inflation and nominal wages are not

4.Consider the table. If the wage rate for workers is w = $50 and each output unit is sold at a price of $6, how many workers will the firm hire?

Marginal Productivity Output Production Function 31 30 F Output changes by 1 unit Labor changes by 1 unit 22 - Output changes by 15 units 17 Labor changes by 1 unit O Quantity of Labor