Chapter Quiz: Labor and Financial Markets

Refer to Table 4-1. If D1 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively. $4; 11 $4; 16 $6; 13 $8; 15

$4; 16

In 2010, Americans had about _____________ outstanding in credit card debts not paid on time. $900 billion $90 billion $900 million $90 million

$900 billion

The labor ____________ curve(s) will shift _______________ if there is an increase in productivity or an increase in the demand for the final product. demand; left supply; left demand; right supply; right

demand; right

A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will: shift to the right, increasing the price of the drug. shift to the left, increasing the price of the drug. shift to the right, decreasing the price of the drug shift to the left, decreasing the price of the drug.

shift to the right, decreasing the price of the drug

On April 1, 2009, in the middle of a recession, the government of the province of Ontario, Canada increased the provincial minimum wage from $8.75 to $9.50. What will the likely effect of this policy be? Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate. Low income workers will be better able to survive the recession at the new, higher wage rate. More people will be hired at the higher wage rate offsetting the effects of the recession. The higher wage will increase the supply of labor offsetting the effects of the recession.

Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate.

Refer to Figure 4-1. The movement from __________ to __________ is consistent with a successful advertising campaign that claims wool keeps you warm. Point A; Point B Point A; Point F Point A; Point D Point A; Point H

Point A; Point F

Refer to Figure 4-1. The movement from __________ to __________ is consistent with a decrease in the price of cotton (a substitute). Point A; Point H Point A; Point D Point A; Point F Point A; Point B

Point A; Point H

Refer to Table 4-1. Suppose that D1 and S2 are the demand and supply schedules for Product A. If the government imposes a price ceiling of $4, then: a 5 unit shortage will result. a 5 unit surplus will result. a 10 unit surplus will result. a 10 unit shortage will result.

a 10 unit shortage will result.

The supply curve of textbooks (which are produced using paper made from trees) will shift to the left in response to: a decline in college tuition. a sharp increase in the demand for and construction of wood-frame homes. an increase in the supply of lumberjacks. an end to government regulations that limit timber harvesting in national forests.

a sharp increase in the demand for and construction of wood-frame homes.

Which of the following will not result in a rightward shift of the market supply curve for labor? a decrease in non-wage income an increase in the working-age population an increase in labor productivity an increase in immigration

an increase in labor productivity

Which of the following will not result in a leftward shift of the market demand curve for labor? a decrease in labor productivity a decrease in demand for the firm's product an increase in the wage rate a decrease in the firm's product price

an increase in the wage rate

Other things being equal, a __________ supply of workers tends to __________ real wages. smaller; not change larger; increase smaller; decrease larger; decrease

larger; decrease

Since Baltimore passed the first _______________ in 1994, several dozen cities enacted similar laws in the late 1990s and into the 2000s. living wage law price ceiling price floor minimum wage

living wage law

In contrast to goods and services markets, _____________ are rare in labor markets, because rules that prevent people from earning income are not politically popular. minimum wages price floors price ceilings living wage laws

price ceilings

As the _____________ complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right. technology low-skill labor market lower wage

technology

When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________. the quantity demanded of financial capital at any given interest rate will remain unchanged. the quantity demanded of financial capital at any given interest rate will shift to the left. the quantity demanded of financial capital at any given interest rate will shift to the right. the quantity demanded of financial capital at any given interest rate will achieve equilibrium.

the quantity demanded of financial capital at any given interest rate will shift to the right.

Whenever there is a shortage at a particular price, the quantity sold at that price will equal: the quantity demanded at that price. the quantity supplied minus the quantity demanded. the quantity supplied at that price. (quantity demanded plus quantity supplied)/2.

the quantity supplied at that price.

Many economists believe that the trend toward greater wage inequality across the U.S. economy was primarily caused by _____________. the recession new technologies the rise of global markets inflation

the rise of global markets

Many states do have ____________, which impose an upper limit on the interest rate that lenders can charge. price ceiling laws usury laws price floor laws minimum interest rate

usury laws

If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages __________. will stay the same will decrease will increase may increase, decrease or stay the same depending on the relative slopes.

will increase