1. Suppose that production at a firm occurs according to the following schedule.

Labor: 0123456

Output:0175340495640765880

If the wage per unit of labor is $765 and the price of output is $5 per unit, then the optimal amount of labor to hire is

a)zero

b)at least one but less than two

c)between three and four

d)five

e)six or more

2.Which of the following would not give workers some degree of monopoly power?

a)learning by doing

b)labor unions

c)highly specialized human capital

d)high rates of short- term unemployment

e)high costs of job turnover and training incurred by employers

3.Increases in labor productivity from improved technology (I'm not sure if d. or e. is the right answer )

a)increase the long run supply of labor

b)reduce the demand for labor

c)reduce real wages

d)induce firms to substitute capital for labor

e)have no long run effect on total hours worked

4.Country A has a large pool of skilled workers earning $50 per hour and a small pool of unskilled workers earning $18 per hour.Country B has a small pool of skilled workers earning $60 per hour and a large pool of unskilled workers earning $8 per hour.Trade theory predicts that if A and B engage in international trade with each other,

a)real wages paid to skilled workers will fall in A

b)unskilled wages will become more unequal between A and B

c)real incomes will become more equal within B

d)the wages of unskilled workers in B will fall

e)wages to all workers in both countries will rise

5.Who among the following is likely to have the highest marginal propensity to consume out of current income?

a)a rational consumer who intends to behave strictly according to the permanent income hypothesis

b)a risk averse consumer facing a high degree of uncertainty

c)a low-income consumer facing borrowing constraints

d)a working age consumer looking forward to retirement

e)a wealthy parent who is currently accumulating funds to bequeath to his heirs