Labor Market Q's

An increase in the real wage rate will cause

a movement along the labor demand curve.

Consider these four graphs of the labor market, showing four different minimum wage levels. Which graph(s) shows a wage level where there is no unemployment?

B

A special credit program is begun to encourage women-owned microbusinesses. We would expect the female labor force participation rate to:

rise

Consider the graph of the labor market shown here. If the government mandates a minimum wage of $25, there is a labor:

surplus of 2,000 workers.

You run a factory that makes leather shoes. You opt to pay your workers twice the going wage in order to reduce tardiness and shirking and to increase workers' morale and effort. This scenario is an example of:

efficiency wage

Suppose a labor market is described by the demand equation, Qd = 60 - 2w, and the supply equation, Qs = -10 + w, where Qd is the quantity demanded of labor, Qs is the quantity supplied of labor, and w is the wage (in dollars). What is the equilibrium wage in this labor market?

$23.33

West Virginia experiences an economic boom. We would expect:

cyclical unemployment to fall.

Henry Ford's $5 per day wage is an example of:

efficiency wage

Which of the following is an economic cost of unemployment?(i) Unemployed people often accept lower wages when they eventually find work.(ii) Hysteresis occurs.(iii) The unemployment rate falls.(iv) Children whose parents are unemployed have lower academic outcomes.

(i) (ii)

Consider the graph of the labor market shown here. At the wage rate of $13, the number of unemployed people in this market is:

0

Consider the graph of the labor market shown here. At the wage rate of $14, the number of unemployed people in this market is:

0

Unemployment insurance can lead to:

longer unemployment durations.

The quantity of labor supplied

may increase with the real wage, if the substitution effect is larger than the income effect.

Which of the following is an economic cost of unemployment?(i) Unemployed people often accept lower wages when they eventually find work.(ii) Hysteresis occurs.(iii) The unemployment rate falls.(iv) Children whose parents are unemployed have lower academic outcomes. Correct!

(i) and (ii)

Consider the labor market shown here. If an efficiency wage of $45 is instituted:

10,000 fewer workers will be hired.

Suppose a labor market is described by the demand equation, Qd = 60 - 2w, and the supply equation, Qs = -10 + w, where Qd is the quantity demanded of labor, Qs is the quantity supplied of labor, and w is the wage (in dollars). If the government institutes a minimum wage of $25, how many workers will be employed in this market?

10,000,000

Suppose a labor market is described by the demand equation, Qd = 60 - 2w, and the supply equation, Qs = -10 + w, where Qd is the quantity demanded of labor, Qs is the quantity supplied of labor, and w is the wage (in dollars). If the government institutes a minimum wage of $25, how many workers will be willing to work in this market?

15,000,000

Suppose that the graph depicts the labor market for personal care aides in Morgantown, West Virginia. If the government enacts a minimum wage of $11, how many personal care aides will be employed?

2000

Consider the labor market shown here. If an efficiency wage of $14 is instituted in this market:

4,000 workers who are willing to work will not find employment.

Consider these four graphs of the labor market, showing four different minimum wage levels. Which graph(s) shows a wage level that leads to unemployment?

A D

A tremendous flood along the Mississippi River destroys thousands of factories, reducing the nation's capital stock by 5%. What happens to current employment and the real wage rate?

Both employment and the real wage rate would decrease.

A bird flu epidemic causes many people to flee the country, but does not affect labor demand significantly because almost all the goods produced within the country are exported. What happens to current employment and the real wage rate?

Employment would decrease and the real wage would increase.

What two factors should you equate in deciding how many workers to employ?

The marginal product of labor and the real wage rate

You run a factory that makes leather shoes. You opt to pay your workers twice the going wage in order to reduce tardiness and shirking and to increase workers' morale and effort. This scenario is an example of:

an efficiency wage.

Labor unions can lead to:

an increase in structural unemployment.

In order to protect yourself from the harmful effects of unemployment, you should:

build new skills.

Devina lost her job a while ago when the economy entered a recession. She no longer believes she can get a job and has lost hope of employment. She has several friends in the same scenario. They have all stopped looking for work. This scenario describes:

discouraged workers

The household budget constraint may have a kink because

leisure is limited by the number of available hours.

If the state begins to subsidize child day care heavily, we would expect labor force participation to:

rise

The government raises the minimum wage. If there are already unemployed people in the economy, we would expect the unemployment rate to:

rise

Suppose that the graph depicts the labor market for personal care aides in Morgantown, West Virginia. If the government enacts a minimum wage of $11, the number of employed workers:

rises by 1000

Suppose that the graph depicts the labor market for personal care aides in Morgantown, West Virginia. If the government enacts a minimum wage of $11, the number of employed workers:

rises by 2000

Consider the graph of the labor market shown below. If the government raises the minimum wage from $23 to $25:

the number of people working in this market will fall by 4,000 people.

Consider the graph of the labor market shown here. At the wage rate of $23:

the number of unemployed people in this market is zero.