Chapter 8
Which of the following factors lead to decrease in the demand for labor?
- a decrease in the price of worker's output - a decrease in the relative price of the product
Which of the following factors are likely to lead to an increase in the supply of labor.
- an increase in immigration - an increase in the population - an increase in the fraction of women who want to work
For workers who produce goods and services that are exported abroad, international trade leads to which of the following:
- higher wages - higher employment
Over the last several decades, the labor supply has increased because of
- increases in women's labor force participation rates - immigration - baby boomers entering the workforce
Which of the following does international trade lead to for those workers in industries that face competition from imports?
- lower employment - lower wages
Supposed that with one worker, you produce 100 bagels per day. With two workers, you produces 210 bagels per day. And with three workers, you produce 300 bagels per day. The addition of the third worker
- suggest diminishing marginal product of labor - adds a positive amount to total product
Which of the following factors account for the increase real wages in industrialized countries over the last 100 years?
- technological progress; technological progress has increased worker productivity leading to an increase in the demand for labor and higher equilibrium wages - large increases in capital; increase in capital have improved worker productivity leading to an increase in the demand for labor and higher equilibrium wages
Select the five recent trends of the labor market
- the rate of job growth has slowed - Western Europe has experienced higher unemployment that the U.S. - increased U.S. wage inequality - the real wage growth rate has slowed - substantial growth in the real wages in industrialized countries
Skill-biased technological change will
-create incentives for workers to acquire education and skills - increase wage inequality
Which of the following is an example of frictional unemployment?
A worker who is unemployed while searching for a job that is a good match for her skill set
The increase in unemployment in the United States that accompanied the recession that started in December 2007 is an example of
Cyclical unemployment
As firms hire more workers, diminishing returns to labor implies that the marginal product of each additional worker a firm hires will ___ when capital and other inputs are held constant
Decrease
International trade increases wage inequality by ____ the wages of workers who produce products that are imported and ____ the wages of workers who produce products that are exported
Decreasing; increasing
In the labor market, firms
Demand labor
True or false: the best way for government to deal with the problems in the domestic labor market created by international trade is to try to limit international trade
False; there are clear efficiency gains to international trade. Thus, for example, it would be better for governments allow international trade and help displaced workers find new jobs or provide government payments to workers who are unable to find new jobs
One benefit of ___ unemployment is that job search may lead to better matchers between workers and jobs, leading to higher output.
Frictional
Short-term unemployment associated with the process of matching workers with jobs is known as
Frictional unemployment
The type of unemployment that is associated with the process of matching workers to jobs is called ___ unemployment, while the unemployment that consists of workers who lack marketable skills is called ___ unemployment, and the type of unemployment that is caused by a decline in total spending is called ___ unemployment
Frictional; structural; cyclical
An individual is willing to supply labor whenever their real wage is ___ than their reservation price
Greater
Government can best deal with problems in the domestic labor market created by international trade by
Helping workers in negatively affected industries find new jobs
government can best deal with the problems in the domestic labor market created by international trade by
Helping workers in negatively affected industries find new jobs
Even though international trade increases economic efficiency, it will tend to hurt workers who produce goods and services that are
Imported from abroad
International trade will decrease the demand for labor in ___ industries and increase the demand for labor in ___ industries
Importing; exporting
International trade will decrease the demand for labor in ___ industries and increase the demand of labor in __ industries.
Importing; exporting
During the twentieth century, a measurable, substantial growth in real wages has occureed
In all industialized countries
According to economic theory, an increase in the minimum wage will lead unemployment to
Increase
According to economic theory, an increase in the minimum wage will lead unemployment to ___
Increase
By reducing worker's incentives to look for jobs, unemployment insurance is typically thought to ____ the duration of unemployment spells
Increase
The demand for labor will increase if the real price of workers' output
Increase
International trade will ____ the demand for labor in exporting industries and ___ the demand for labor in importing industries
Increase; decrease
Skilled-biased technological change ____ the demand for higher-skilled workers relative to the demand for lower-skilled workers
Increases
Skilled-biased technological change increases wage inequality by ___ the wages of higher-skilled workers relative to the wages of lower-skilled workers
Increasing
Why might workers leave importing industries and seek skills/jobs in exporting industries?
International trade lowers the wage of workers in importuning industries and increase the wages of workers in exporting industries
Which of the following are the accurate statements about international trade?
It hurts workers who produce goods and services that are imported from abroad - it increases efficiency
Which of the following factors account for the increase real wages in industrialized countries over the last 100 years?
Large increases in capital; increases in capital have improved worker productivity leading to an increase in the demand for labor and higher equilibrium wages Technological progress; technological progress has increases worker productivity leading to an increase in the demand for labor and higher equilibrium wages
In recent years, the rate of unemployment in the U.S. has been ___ than in western Europe
Less
In recent years, the rate of unemployment in the U.S. has been ___ than in Western Europe
Lower
The extra output gained by hiring an additional worker is the
Marginal product of labor
The minimum level of compensation tha leaves someone indifferent between working and not working is their
Reservation price
If worker productivity increase, the labor demand curve will
Shift to the right
_______________ technological change is technological change that affects the marginal products of higher-skilled workers differently from those of lower-skilled workers
Skill-biased
Sluggish productivity growth since the 1970s combined with rapid increases in the supply of labor help explain the
Slowdown in real wage growth since the 1970s despite rapid employment growth
An auto workers in Michigan who loses his job because the company relocated the plant to another country is an example of
Structural unemployment
Long-term unemployment that arises due to lack of skills, language barriers, discrimination, skill mismatch, and structural features of the labor market such as union and minimum wage laws is ________
Structural unemployment
A firm will hire a worker if and only if
The value of the marginal product of labor is greater than or equal to the wage rate
European labor markets tend to be more regulated than those in the US. As a results,
Unemployment is higher in Europe
___ will reserve some of the inequality caused by international trade
Worker mobility between Industries
The value of marginal product of labor is the _____ generated by hiring an additional worker
additional revenue
Cyclical unemployment is
the extra unemployment that occurs during periods of recession