Unit 6's Chapter 4 Quiz

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

demand; right

Let's pretend the demand for roofers _________________ slower than does supply. Then the wages of roofers will most likely ___________________.

increases; fall

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 increase

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 caused by the recession coupled with the mandated higher minimum wage will lead to an increase in the unemployment rate.

Let's pretend the government subsidizes the cost of education required to become a nurse. The likely result will be:

a shift of the supply curve to the right for nurses.

A well-trained and educated workforce causes ________________________ in the demand for that labor by employers.

an increase

Which of the following results in a rightward shift of the market demand curve for labor?

an increase in demand for the firm's product

Which of the following will not result in a leftward shift of the market demand curve for labor?

an increase in the wage rate

Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine:

both the equilibrium price and quantity will rise.

The demand for chefs is dependent on the _________________________ for restaurant meals because this type of demand is ____________________________.

demand; derived

As the __________ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left.

higher wage or technology

Improvements in the productivity of labor will tend to:

increase wages.

Other things being equal (ceteris paribus), a __________ supply of workers tends to __________ real wages.

larger; decrease

As the _____________ complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right.

lower wage or technology

In contrast to goods and services markets, _____________ are rare in labor markets, because rules that prevent people from earning income are not politically popular.

price ceilings

Let's pretend a minimum wage is set well-above the prevailing equilibrium market wage. Since a minimum wage is a ________________________, this relatively high minimum wage will most likely initially cause a ____________________.

price floor; surplus

When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________.

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

Many states have ____________, which impose an upper limit on the interest rate that lenders can charge.

usury laws

Are markets always in equilibrium?

No, but if there is no outside interference, they tend to move toward equilibrium.

The "law of supply" functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied.

price