T or F questions

1. College education typically yields higher rates of return for both the individual and society that are yielded by grammar school or high school educations.

2. If the income effect of a wage increase is larger than the substitution effect of a wage increase then the supply curve of labor bend backward, which indicate lower quantity of labor supplied as the wage increase.

3. If the income effect of a wage increase is larger than the substitution effect of a wage increase then the supply curve of labor bend backward, which indicate lower quantity of labor supplied as the wage increase.

4. Markets wages that are set below the intersection of where the supply and demand curves for labor create surpluses of workers and pressures for excessive unemployment.

5. An individual's labor supply is positively sloped if the income effect is more powerful than the substitution effect.

Single-choice questions

1. The additional output generated by the last worker hired is the marginal:

A. revenue from the output

B. factor cost of labor

C. utility of that worker

D. physical product of labor

2. Labor productivity depends most directly on the:

A. preferences of consumers

B. number of competitive firms

C. availability for other resources and technology

D. individual's labor/leisure trade-off

3. The demand for labor is more elastic the:

A. larger labor costs are as a proportion of total costs

B. shorter the time interval considered

C. greater the supply of labor

D. more difficult it is to substitute one resource for another

E. all of the above

4. The demands for productive resources are "derived" from the:

A. marginal utility they directly generate

B. the demand for goods and services

C. disutility incurred in supplying labor resources

D. equity of resource owners as judged by employers

5. Brandon works for Beefcake Body Builders. His MPP equals 5, his wage equals $7 per hour, and the price of Beefcake's services is $10. Brandon's MRP equals:

A. $35

B. $70

C. $50

D. $15