Ec 201 Set

Which of the following is an example of derived demand? a) The demand for kitchen renovation affects the demand for carpenters. b) The demand for workout videos affects the demand for treadmills. c) The demand for accountants affects the demand for accounting services. d) The demand for nails affects the demand for saws.

a) The demand for kitchen renovation affects the demand for carpenters.

A difference in wages required to offset the desirable or undesirable aspects of a job is: a) compensating differential. b) a stress adjustment. c) a workplace offset. d)an offset adjustment.

a) compensating differential.

What level of market power exists for sellers in a perfectly competitive market? a) The largest seller in the market holds all market power. b) All sellers lack market power. c) All sellers have an equal and high level of market power. d) The level of market power varies widely across the sellers in the market

b) All sellers lack market power.

Use the data in Table: Pat's Pedicures to answer the question.I f Pat uses the Rational Rule for Employers, how many nail technicians will she hire? a) one b) three c) two d) four

b) three

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 supply of electricians will decrease, resulting in a higher wage and lower quantity of labor. b) The demand for electricians will decrease, resulting in a lower wage and lower quantity of labor. c) The supply of electricians will increase, resulting in a lower wage and higher quantity of labor. d) The demand for electricians will increase, resulting in a higher wage and higher quantity of labor.

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

Damon's wage falls. The substitution effect would cause him to _____ his work hours, and the income effect would cause him to _____ his work hours. a) decrease; increase b) increase; increase c) increase; decrease d) decrease; decrease

a) decrease; increase

Your landscaping company uses labor and shovels. The price of shovels falls, and this _____ your demand for labor because labor and shovels are _____. a) raises; complements b) raises; substitutes c) lowers; substitutes d) lowers; complements

a) raises; complements

An individual's time is divided into the two main categories of a) work and leisure. b) play and production. c) leisure and production. d) work and play.

a) work and leisure.

Luana gives up a salary of $80,000 per year to start her company. She invests $50,000 of her savings in her company, savings that had been earning her $4,000 per year in interest. During Luana's first year in business, total revenue is $300,000, and her explicit financial costs are $225,000. What is Luana's accounting profit from her first year in business? a) $71,000 b) $75,000 c) -$9,000 d) -$59.000

b) $75,000

A perfectly competitive industry exists under which of the following conditions? I. The product sold is similar across firms. II. There are many sellers, each small relative to the total market. III. There are many sellers, each with total assets less than $2 million. IV. The threat of competition exists from potential sellers that have not yet entered the market. a) I and II only b) I, II, and IV only c) I, III, and IV only d) I, II, and III only

b) I, II, and IV only

Which of the following will NOT happen when the wage for pharmacists drops? a) Fewer people will enter the workforce to become pharmacists. b) The supply curve for pharmacists shifts to the left. c) People will choose other occupations instead of becoming a pharmacist. d) Existing pharmacists will want to work fewer hours

b) The supply curve for pharmacists shifts to the left.

What happens in the labor market for public school teachers when a state government raises the minimum educational standards for certification as a public school teacher? a) The demand for teachers decreases, resulting in a lower wage and lower quantity of labor. b) The supply of teachers decreases, resulting in a higher wage and lower quantity of labor. c) The supply of teachers increases, resulting in a lower wage and higher quantity of labor. d) The demand for teachers increases, resulting in a higher wage and higher quantity of labor.

b) The supply of teachers decreases, resulting in a higher wage and lower quantity of labor.

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) an efficiency wage. b) a compensating differential. c) discrimination based on time preferences. d) irrational decision making by an employer.

b) a compensating differential.

The market power of a firm is its a) market share based on the percentage of total market revenue. b) ability to raise its price without losing many of its customers to competing businesses. c) ability to cause other firms in its market to drop out of the market. d) ranking based on units sold compared to other firms selling the same product.

b) ability to raise its price without losing many of its customers to competing businesses.

The logic of efficiency wages is that if an employer pays a high wage: a) workers will invest in additional skill development. b) an employee will be motivated to work hard. c) low-skilled workers will be unlikely to apply for work with that employer. d) the firm thereby shares profits with workers

b) an employee will be motivated to work hard.

An efficiency wage is a: a) wage that rises when workers invest in their human capital. b) higher wage paid to encourage greater worker productivity. c) higher wage paid to reward workers who show greater productivity. d) system of tying wage rates to overall factory efficiency rather than personal productivity.

b) higher wage paid to encourage greater worker productivity.

If a business owner is maximizing their economic profit, the owner: a) has implicit opportunity costs that are larger than the direct financial costs. b) is better off financially than with any other use of the resources used in the business. c) is definitely incurring accounting profit, as well. d) cannot have any implicit opportunity costs.

b) is better off financially than with any other use of the resources used in the business.

As the price of scanners with high-resolution cameras dropped, Ford began using them instead of human inspectors to check the quality of the painted surfaces of its cars.What effect did the decrease in the price of scanners have on the labor market for inspectors? a) Labor supply decreased b) Labor supply increased c) Labor demand decreased d) Labor demand increased

c) Labor demand decreased

Jenna is a concert pianist. A grand piano is a _____ to her labor in the production of her concerts. a) derivation b) wage match c) complement d) substitute

c) complement

An employer who discriminates in hiring based on prejudice is likely to have higher costs than necessary because: a) all inputs will have higher prices as others shun the party who discriminates. b) the employer pays a higher wage to the group of workers discriminated against. c) more productive workers may be forgone in order to hire less productive workers who have preferred characteristics. d) less productive workers may be forgone in order to hire more productive workers who have preferred characteristics.

c) more productive workers may be forgone in order to hire less productive workers who have preferred characteristics.

In a perfectly competitive labor market, employers will not pay more than the market wage because: a) other firms would also pay the higher wage. b) good workers would go to other firms. c) plenty of good workers are available at the market wage. d) there would be a shortage of workers at a wage above equilibrium.

c) plenty of good workers are available at the market wage.

The marginal revenue product is equal to the marginal A) revenue multiplied by the wage. b) revenue multiplied by output. c) product of labor multiplied by the price of that product. d) product of labor multiplied by the wage.

c) product of labor multiplied by the price of that product.

Tom opens a sandwich shop; which of the following is NOT an economic cost (total cost) of running his business? a) the interest income he could have earned on the money he invested in his business from savings b) the wages that he pays his workers c) the expenses for his own lunch every day d) his forgone earnings as a book editor, his next best opportunity for employment

c) the expenses for his own lunch every day

The Rational Rule for Employers says to hire more workers if a) worker skill exceeds worker wage. b) output increase is sought and wage is falling. c) the marginal revenue product is greater than (or equal to) the wage. d) the cost of workers is less than the revenue of workers

c) the marginal revenue product is greater than (or equal to) the wage.

Use the data in the table for Wendy's Windows to answer the question. Note the price of each window is $200 and the market wage is $600. If Wendy uses the Rational Rule for Employers, how many workers will she hire? a) four b) one c) three d) two

c) three

Accounting profits are: a) total revenue less implicit costs. b) total revenue less sunk costs. c) total revenue less explicit costs. d) total revenue less total costs, including explicit and implicit costs.

c) total revenue less explicit costs.

According to the figure, what is the amount of the deadweight loss caused by the imposition of the tax on gadgets? a) $350 b) $100 c) $175 d) $50

d) $50

Use the market graph to answer the question. Which statements below are TRUE? ( i) Consumer surplus grows with a price ceiling of $3. (ii) Consumer surplus grows with price ceiling of $6. (iii) Producer surplus grows with a price floor of $6. a) (i) and (ii) b) (i), (ii), and (iii) c) (i) and (iii), not (ii) d) (i) only

d) (i) only

Alfredo has a job at a local restaurant making $25,000 a year. He decides to quit his restaurant job and take a new job at a fish store for $26,000 a year. The Fish store is 30 minutes from his house, so he has to spend $1,500 a year to buy gas to drive to his new job. Which statement below is true about Alfredo? a) Alfredo has an economic profit of $27,500 working at the fish store. b) Alfredo has an economic lots of $25,000 working at the fish store. c) Alfredo has an economic profit of $1000 working at the fish store. d) Alfredo has an economic loss of $500 working at the fish store.

d) Alfredo has an economic loss of $500 working at the fish store.

Which of the following will NOT shift a company's demand curve for labor? a) Change in the demand for the company's product b) Change in the price of capital c) Better management techniques d) Change in the wage paid to workers

d) Change in the wage paid to workers

What is the impact of higher wages on labor supply according to the income effect? a) Workers are more productive. b) Work is more attractive. cWorkers are less productive. d) Leisure is more attractive.

d) Leisure is more attractive.

Alena manages a small theme park. She hires one more custodian at $450 per week, and her park is cleaner and more attractive. As a result of this improvement, ticket sales rise by 40 tickets per week. Tickets sell for $12. Use the Rational Rule for Employers to determine if hiring the extra custodian was a good move. a) Yes, it was a good move because the ticket sales rose more than price. b) No, it was a bad move because price did not rise as much as ticket sales. c) No, it was a bad move because it added more to cost than revenue. d) Yes, it was a good move because it added more to revenue than to cost.

d) Yes, it was a good move because it added more to revenue than to cost.

If one company provides 70% of the jobs in a town, the company could exert _____ power in its labor market. a) compensating b) monopoly c) differential d) monopsony

d) monopsony

The market structure of _____ is rare because _____ and _____. a) monopoly; most firms advertise; most markets have many firms b) perfect competition; most firms advertise; most markets have many firms c) monopoly; most goods are not identical; most markets have some dominant firms d) perfect competition; most goods are not identical; most markets have some dominant firms

d) perfect competition; most goods are not identical; most markets have some dominant firms

In the small town of Wellsville, there is only one grocery store. Given that everyone needs food, we would expect that this grocery store: a) is a monopoly and hence highly profitable. b) faces a perfectly inelastic demand. c) charges exorbitant prices. d) prices competitively.

d) prices competitively.

The labor supply curve in a labor market a) is based on the firms demanding labor in the market. b) slopes downward. c) is based on the firms selling jobs in the market. d) slopes upward.

d) slopes upward.

In a perfectly competitive labor market, employers will not pay less than the market wage because at a wage below the equilibrium a) there would be a surplus of workers. b) they would be inundated with excess workers. c) the equilibrium wage would rise. d) they would not be able to hire anyone

d) they would not be able to hire anyone

Economic profits are: a) total revenue less sunk costs. b) total revenue less implicit costs. c) total revenue less explicit costs. d) total revenue less total costs, including explicit and implicit costs.

d) total revenue less total costs, including explicit and implicit costs.