RESPONSE TO ALL****

Suppose that labor elasticity coefficient is 2.5, Which of the following statements is correct?

Question 1 options:

A)	Labor supply is elastic and 10% increase in the wage would result in a 25% increase in hours worked

B)	Labor supply is inelastic and 10% increase in the wage would result in a 25% increase in hours worked

C)	Labor supply is inelastic and 10% increase in the wage would result in a 2.5% increase in hours worked

D)	Labor supply is inelastic and 10% increase in the wage would result in a 2.5% decrease in hours worked

Question 2 (2 points)

The Earn-Income tax credit has a phase in and phase out period whic works like a ___________ and _____________

Question 2 options:

A)	wage subsidy ; negative income tax

B)	demogrant ; negative income tax

C)	wage subsidy ; demogrant

D)	demogrant ; wage subsidy

Firms hire workers in order to produce goods and services that consumers want, this idea makes the demand for labor a __________ demand

Question 3 options:

A)

derived

B)

Marshalls

C)

factor

D)	compensated

Question 4 (1 point)

How many workers are hired by the firm and what they are paid will be impacted by all these factors except;

Question 4 options:

A)	It depends on the worker's specific preferences

B)	It depends on whether we deal with short or long run

C)	It depends on the industry market structure

D)	It depends on the amount of regulation by the government

E)	It depends on Labor demand elasticity

Question 5 (1 point)

The per unit output production by a typical worker is known as the

Question 5 options:

A)	Average product

B)	Marginal product

C)	Variable product

D)	Marginal Propensity to consume

Question 6 (1 point)

The resulting decline in the increase to output as more and more variable input is added to a fixed input is known as ______________

Question 6 options:

A)	Diminishing marginal productivity

B)	Average product

C)	Marginal product

D)	Variable product

Question 6 (1 point)

The resulting decline in the increase to output as more and more variable input is added to a fixed input is known as ______________

Question 6 options:

A)	Diminishing marginal productivity

B)	Average product

C)	Marginal product

D)	Variable product

Question 7 (2 points)

Under perfect competition, firm are very small player in the industry. This means that they

Question 7 options:

A)	Have no influence on the output and factor prices, hence are price takers

B)	Have some level of influence on price

C)	Have a lot of influence on the output and factor prices; they are price makers

Question 8 (1 point)

In the short run, the dollar value of what each additional worker produces is know obtained by

Question 8 options:

A)	Multiplying the price of the output by the marginal productivity of the worker

B)	Multiplying the price of the output by the average productivity of the worker

C)	Multiplying the price of the input by the marginal productivity of the worker

D)	Multiplying the price of the input by the marginal productivity of the worker

Question 9 (1 point)

In making the employment decisions in the shortrun, if the MB > MC then the firm will ______ this additional worker

Question 9 options:

A)

Hire

B)

Not hire

C)

Layoff

Question 10 (2 points)

The Short run labor demand curve is described by all the following except,

Question 10 options:

A)	It is the upward sloping portion of the VMPEcurve below the point where VMPE intersects VAPE

B)	Is the portion of VMPE where VAPE should be greater than or lie above the point where VMPE=W

C)	is the downward sloping portion of the VMPE curve below the point where VMPE intersects VAPE

D)	indicates how many workers the firm hires for each possible wage, holding capital constant

Question 10 (2 points)

The Short run labor demand curve is described by all the following except,

Question 10 options:

A)	It is the upward sloping portion of the VMPEcurve below the point where VMPE intersects VAPE

B)	Is the portion of VMPE where VAPE should be greater than or lie above the point where VMPE=W

C)	is the downward sloping portion of the VMPE curve below the point where VMPE intersects VAPE

D)	indicates how many workers the firm hires for each possible wage, holding capital constant

Question 11 (1 point)

All these factors will shift the Short run Labor Demand curve except

Question 11 options:

i)	A change in the input price like wages

ii)	A change in output price P

iii)	Productivity of workers

iv)	technological advancement

Question 12 (1 point)

In the long run all factors of production are fixed

Question 12 options:

	True
	False