QUESTION 6 2.5 points Saved Assume that the coefficient of elasticity of product demand is 1.5 in industry A and is .75 in industry B. Other things equal, labor demand will be more elastic in industry B than in A. more elastic in industry A than in B. relatively inelastic in both industries A and B. relatively elastic in both industries A and B. QUESTION 7 2.5 points Saved Assume that your nominal wage was fixed at $15 an hour, and the price index rose from 100 to 104. In this case, your real wage has O decreased to $14.75. decreased to $14.29. decreased to $14.40. increased to $20 QUESTION 8 2.5 points Saved Assume the price of capital rises relative to the price of labor and, as a result, the demand for labor increases. Therefore, the output effect is greater than the substitution effect. the income effect is greater than the output effect. the substitution effect is greater than the output effect. capital is very highly substitutable for labor. QUESTION 9 2.5 points Saved Assuming pure competition, which of the following are equivalents? O Px = MC and MRPLI PL = MRPc / Pc = 1 O Px = MC and MP L / PL = MPc/ Pc O MRPL / PL = MRPC / Pc and Px = 1/MC O MRPL / PL = MRPC/ Pc and Px = AVC QUESTION 10 2.5 points Saved Sector 1 Sector 2 (union) (nonunion) A ........ W............"' Wage rate Wage rate .......'.... . . ....................... ............mmm!........ . . ....... D ........ D1 G .. .. ..... D2 ....... 0 L2 O L Employment Employment Assumptions: These two graphs show two sectors of the labor market for a particular kind of labor. Relevant product markets are competitive. The two labor demand curves are identical. Initially the quantities of labor employed in the two sectors are L, and L'. and the wage rate in each sector is W.. If a union is formed in sector 1 and the union increases the wage rate from W. to W.. then employment will Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and SubmitQUESTION 11 2.5 points Saved Critics of minimum-wage legislation argue that it O is deflationary. O keeps inefficient producers in business. reduces unemployment increases unemployment. QUESTION 12 2.5 points Saved Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers. True O False QUESTION 13 2.5 points Saved For a firm selling its product in an imperfectly competitive market, or a perfectly competitive market, the marginal revenue product of labor can be found by multiplying marginal product by product price. O multiplying marginal revenue by marginal product adding marginal revenue to total product as one more unit of labor is employed. O multiplying marginal product by value marginal price QUESTION 14 2.5 points Saved Government transfer programs result in a U.S. Lorenz curve that is closer to the diagonal line than would be the case without the programs. O True O False QUESTION 15 2.5 points Saved Households Percentage of Income Received Quintile Before Taxes and Transfers After Taxes and Transfers Lowest 20% 1.1 4.9 Second 20% 7.0 10.5 Third 20% 14.0 15.9 Fourth 20% 23.0 22.8 Highest 20% 54.8 46.0 Refer to the table. The decline in percentage of income received from before taxes and transfers to after taxes and transfers is greatest for the O third 20 percent of households. O highest 20 percent of households. second 20 percent of households. fourth 20 percent of households. QUESTION 16 2.5 points Saved Human capital investment refers to spending on education and worker training. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and SubmitQUESTION 16 2.5 points Saved Human capital investment refers to spending on education and worker training. O True False QUESTION 17 2.5 points Saved If a 10 percent wage increase in a particular labor market results in a 15 percent decline in employment in that market, labor demand is O unit-elastic. O perfectly elastic. O elastic. inelastic QUESTION 18 2.5 points Save Answer If the price level rises by 6 percent in a year and nominal wages increase by 2 percent, then real wages will decrease by 4 percent. O increase by 4 percent. O decrease by 8 percent. O decrease by 6 percent. QUESTION 19 2.5 points Save Answer If the wage rate in a purely competitive labor market increases, it will cause the O marginal resource cost curve for a single competitive firm in the industry to shift up. labor supply curve for a single competitive firm to shift downward. O marginal resource cost curve for a single competitive firm in the industry to shift down. labor supply curve for the industry to shift rightward. QUESTION 20 2.5 points Save Answer Inputs of a MP3 Inputs of b MPb W N D CI A W N The table gives marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $2 per unit. Assuming the prices of resources a and b are $4 and $16, respectively, when the firm hires the profit-maximizing combination of resources, its economic profit will be O $138. O $370 O $312. O $170. Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and SubmitQUESTION ZT 2.5 points Saved Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hiring of labor. True False QUESTION 22 2.5 points Save Answer Nominal monthly wages increase from $1,500 to $1,850, while the price level increases by 8.33% percent. The percentage change in real monthly wages is about O 14 percent. O 15 percent. 16 percent. O 12 percent. QUESTION 23 2.5 points Save Answer Other things equal, we would expect the labor demand curve of a monopolistic seller to O decline at the same rate as that of a purely competitive seller. have a slope greater in absolute value than a perfect competitor be more elastic than that of a purely competitive seller. decline less rapidly than that of a purely competitive seller. QUESTION 24 2.5 points Save Answer Quantity of Quantity of Labor MP of Labor |MRP of Labor Capital MP of Capital |MRP of Capital $45 $24 36 18 27 15 18 12 6 3 Refer to the given data. If the prices of labor and capital are $9 and $12, respectively, at the profit-maximizing level, the firm's total output will be O 27 units. O 60 units. 68 units 64 units. QUESTION 25 2.5 points Saved (al Percent of Income (b) (c) (d) (e) Percent of Families Refer to the diagram, where curves (a) through (e) are for five different countries. Of the countries listed below, income is most unequally distributed in country a. d Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers and Submitites, 32 seconds. Question Completion Status: Wage Rate D D2 D Quantity of Labor Refer to the graph. A move from a to b along labor demand curve D, would result from O a decrease in the wage rate. an increase in the wage rate. O an increase in the demand for the product that this labor is helping to produce. O a decrease in the price of a substitute resource, assuming that the substitution effect exceeds the output effect. QUESTION 29 Wage Rate ($ Quantity of Labor Refer to the labor market diagram, where D is the labor demand curve, S is the labor supply curve, and MRC is the marginal resource (labor) cost curve. If this were a purely competitive labor market, the equilibrium wage rate and level of employment would be $5 and 3, respectively. $6 and 4, respectively $7 and 5, respectively. $8 and 3, respectively. QUESTION 30 Wage Wage rate rate Figure 1 Q 0 Figure 2 Wage MRC Wage rate X. Figure 3 Q Figure 4 Q Wage rate Figure 5 Q Refer to the labor market diagrams. The case of bilateral monopoly is represented by Figure 0 2 .QUESTION 31 Resource X has no close substitutes, whereas resource Y has many close substitutes. Other things equal, we would expect O resources X and Y to be close substitutes. resource X to be more expensive than resource Y. the demand for resource X to be more elastic than the demand for resource Y. the demand for resource Y to be more elastic than the demand for resource X. QUESTION 32 Suppose that a union successfully negotiated a 10 percent wage increase and the quantity of labor demanded increased by 10 percent. We can conclude that O At least one of the ceterus paribus assumptions was violated labor demand is highly elastic labor demand is unit-elastic. the coefficient of labor demand elasticity is less than 1. QUESTION 33 Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $10,000, $5,000, $2,500, $1250, and $1000, respectively. What percentage of total income is received by the Al & Bob? O 50 20 62.5 O 75 QUESTION 34 Suppose the price of the product that labor is producing increases and simultaneously the price of capital, which is substitutable for labor, increases. Assuming that the substitution effect is greater than the output effect, the demand for labor O will increase. will decrease may either increase or decrease. O will not change. QUESTION 35 The MRP curve for labor would not shift rightward as the result of an increase in the price of the product labor is producing an increase in the price of labor. O an increase in the productivity of labor. O a decrease in the price of capital, provided the output effect exceeds the substitution effect. QUESTION 36 The concept of "wages" includes the following items, except direct money payments like salaries and commissions. bonuses and royalties. fringe benefits like health insurance and paid leave. amounts spent by workers. QUESTION 37 The elasticity of resource demand will be greater the easier it is to substitute other resources in production. less the elasticity of resource supply. smaller the portion of the product's total costs accounted for by the resource. less the elasticity of demand for the product it is producing.QUESTION 36 The concept of "wages" includes the following items, except direct money payments like salaries and commissions. bonuses and royalties. O fringe benefits like health insurance and paid leave. O amounts spent by workers. QUESTION 37 The elasticity of resource demand will be greater the O easier it is to substitute other resources in production. less the elasticity of resource supply. smaller the portion of the product's total costs accounted for by the resource. O less the elasticity of demand for the product it is producing. QUESTION 38 The labor demand curve of an imperfectly competitive seller is downsloping more than the perfectly competitive case because of diminishing returns and a downward sloping demand curve because of both diminishing returns and the necessity to not lower price to sell more output. solely because product price must be reduced to sell more output. solely because of diminishing returns. QUESTION 39 The principal-agent problem arises primarily because agents pursue some of their own objectives, which may conflict with the objectives of the principals. principals and agents share a common interest, leading to free-rider problems. O principals pursue some of their own objectives, which may conflict with the objectives of the agents. O principals and agents are in an adversarial role, sharing no common interests. QUESTION 40 Wage Rate Quantity of Labor Demanded 800 1,000 1,200 1,600 1,800 Refer to the given data. Suppose that the union that provides labor to firms in this market successfully negotiates an increase in the wage rate from $8 to $10. As a result of the wage increase, firms will hire O fewer workers and the total paid out for wages will decline fewer workers, but the total paid out for wages will increase fewer workers, but the total paid out for wages will remain unchanged. O more capital, if capital and labor are used in fixed proportions in production