Mirco Exam 3 review questions
Which of the following is an example of statistical discrimination?
An employer relies on stereotypes in making hiring decisions.
Which of the following is consistent with current U.S. law on monopolies?
Gaining monopoly or market power through specified exclusionary business practices is illegal.
The market power of a firm is its
Oligopoly
Which of the following is an example of a labor market characterized by compensating differentials?
Outside window washers of skyscrapers earn higher salaries than outside window washers of single family homes.
The government increases the training requirements to obtain an electrician's license. What impact will this have in the labor market for electricians?
The supply of electricians will decrease, 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 compensating differential
A tax designed to induce people to take account of the negative externalities that they cause is referred to as _____ tax.
a corrective
Walmart has a large aisle that displays many different types of shampoos. This observation indicates that the shampoo market is
a monopolistically competitive market.
When a good is nonrival and nonexcludable, the good is referred to as:
a public good
An externality is defined as:
a side-effect of an activity that affects bystanders thats whose interest are not taken into account
A characteristic of oligopoly that is not present in any other market structure is that there
are a small number of sellers with considerable market power.
The marginal private benefit curve is also the:
demand curve
The labor demand is a/an _____________ demand
derived
When a seller is able to differentiate its product successfully, the seller
gains market power.
Companies with market power face a trade-off between
having a higher profit margin and selling a larger quantity.
The accumulated knowledge and skills that make a worker more productive are known as:
human capital
There is evidence that, despite antidiscrimination laws, discrimination _____ in labor markets.
impacts wages
When someone can enjoy the benefits of a good without bearing the cost, the good:
is subject to the free-rider problem
A corrective tax designed to resolve a negative externality problem is typically set at an amount equal to the _____ cost.
marginal external
Which of the following is the amount of a corrective tax that would resolve a negative externality problem?
marginal external cost
An employer's labor demand curve is equal to the
marginal revenue product curve
The marginal private benefit plus the marginal external benefit equals the ____ benefit.
marginal social
When a company has market power, it is _____ in its market.
not a price-taker
What type of relationship exists between the level of a company's market power and the price that its owner is able to charge for its product?
positive
Marginal social cost equals marginal _____ cost plus marginal _____ cost.
private, external
In a market, when a company's owner tries to make its product slightly different from the output of other companies so that it is more attractive to buyers, the company is engaged in
product differentiation.
When the income effect dominates, an individual's labor supply curve
slopes downward
With a _____ number of sellers in a market, _____ market power tends to exist in the market.
smaller; more
The _________________ measures how people respond to a change in relative prices when the wage rises.
substitution effects
In a labor market, workers _____ labor, and employers _____ labor.
supply, demand
An efficiency wage improves efficiency when:
the increase in worker effort and reduced turnover cover the cost of the higher wage
An employer should hire one more worker if
the marginal benefit exceeds the marginal cost
Imperfect competition stems from _____ and whether or not the product is _____.
the number of sellers; differentiated
When making labor supply decisions, your options are
working or leisure