Micro ch. 11 and 12!

Explain efficiency wage using your lecture note:

A higher wage paid to encourage greater worker productivity

A signal is: a. an action taken to credibly convey information that is hard for someone else to verify. b. advance notice of an action that will be taken in the future. c. a price tag. d. an indicator of the equilibrium wage and quantity in a market.

a. an action taken to credibly convey information that is hard for someone else to verify.

Which of the following is an example of statistical discrimination? a. No companies will hire Marcella because they do not want to hire women. b. Arturo is unaware that he avoids hiring Asians. c. An employer relies on stereotypes in making hiring decisions. d. Ingrid refuses to hire people who do not have at least five years of experience in their previous jobs.

c. An employer relies on stereotypes in making hiring decisions.

10. The labor demand is a/an _____________ demand a. Modified b. Imputed c. Derived d. Inferred

c. Derived

Workers on the night shift at a factory earn more per hour than workers on the day shift, although their human capital and productivity are the same. This is an example of: a. discrimination based on time preferences. b. irrational decision making by an employer. c. a compensating differential. d. an efficiency wage.

c. a compensating differential.

The accumulated knowledge and skills that make a worker more productive are known as: a. human capital. b. labor enhancement. c. labor factoring. d. efficiency investment.

a. human capital.

There is evidence that, despite anti discrimination laws, discrimination _____ in labor markets. a. impacts wages b. exists but has no impact c. benefits groups that are discriminated against d. accounts for all differences in wages across groups of workers

a. impacts wages

An employer's labor demand curve is equal to the a. marginal revenue product curve. b. marginal product curve. c. marginal revenue curve. d. rational product curve.

a. marginal revenue product curve.

The _________________ measures how people respond to a change in relative prices when the wage rises. a. substitution effect b. income effect c. opportunity cost d. marginal benefit

a. substitution effect

In a labor market, workers _____ labor, and employers _____ labor. a. supply; demand b. demand; supply c. hire; use d. use; hire

a. supply; demand

An efficiency wage improves efficiency when: a. the increase in worker effort and reduced turnover cover the cost of the higher wage. b. it is structured so that only the most productive workers receive a higher wage. c. capital costs are reduced enough to cover wage costs. d. improved technology accompanies the worker training.

a. the increase in worker effort and reduced turnover cover the cost of the higher wage.

An efficiency wage is NOT _____ but rather _____. a. a variable wage; a reward b. a reward; an incentive c. an incentive; a fixed wage d. a fixed wage; a variable wage

b. a reward; an incentive

The government increases the training requirements to obtain an electrician's license. What impact will this have in the labor market for electricians? a. The demand for electricians will decrease, resulting in a lower wage and lower quantity of labor. b. The demand for electricians will increase, resulting in a higher wage and higher quantity of labor. c. The supply of electricians will decrease, resulting in a higher wage and lower quantity of labor. d. The supply of electricians will increase, resulting in a lower wage and higher quantity of labor.

c. The supply of electricians will decrease, resulting in a higher wage and lower quantity of labor.

A compensating differential is an: a. adjustment to wages that compensates for lost work due to the use of robotics. b. adjustment to work hours that allows low-wage employees to earn more. c. difference in wages that offsets the desirable or undesirable aspects of a job. d. difference in wages that adjusts for differences in worker productivity.

c. difference in wages that offsets the desirable or undesirable aspects of a job.

An employer should hire one more worker if a. the total benefit exceeds the total cost. b. the marginal cost is falling. c. the marginal benefit exceeds the marginal cost. d. demand is rising.

c. the marginal benefit exceeds the marginal cost.

When making labor supply decisions, your options are a. working or doing housework. b. working, shopping, or relaxing. c. working or leisure. d. working, sleeping, or leisure.

c. working or leisure.

.LOOK AT GRAPH ON CANVAS Which graph shows the scenario where the income effect dominates labor supply decisions only at high wages? a. Graph A b. Graph B c. Graph C d. Graph D

d. Graph D

The marginal revenue product of labor is equal to: a. MPL + P. b. MR × Wage. c. MR + Wage. d. MPL × P.

d. MPL × P.

The marginal product of labor is the a. amount of extra worker time it takes to produce one extra unit of output. b. change in output from the slowest worker to the most productive worker. c. extra output produced by all the firm's employees. d. extra production that occurs from hiring an extra worker.

d. extra production that occurs from hiring an extra worker.