Q1- The conflict of interest between workers and firms is resolved when:

a-The supply of labor is flat.

b-All workers are paid the minimum wage.

c-Firms hire all potential workers.

d-The supply of labor equals the demand for labor and when the labor market is in equilibrium.

Q2- Which of the following is not a property of standard indifference curves in a leisure-consumption model?

a-Indifference curves tend to be downward sloping.

b-Higher indifference curves (to the northeast) indicate higher levels of utility.

c-Indifference curves intersect one another.

d-Indifference curves tend to be convex to the origin.

Q3- If native workers and immigrants are substitutable, then:

a-Native workers will encourage immigration.

b-Native firms will discourage immigration.

c-Immigrant workers will receive a higher wage than native workers.

d-Immigration will shift the labor supply curve to the right.

Q4- Competitive factor and product markets lead to:

a-Wages being equalized for all workers.

b-Firms receiving all of the surplus created by the economy.

c-Maximum total surplus.

d-Maximum worker surplus.

Q5- A payroll tax:

a-Increases the demand for workers.

b-Reduces the incentive to provide labor.

c-Reduces the quantity of workers hired if the supply of labor is perfectly inelastic.

d-All of these answers are correct.