4

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

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

20. Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine: A. the equilibrium price will fall and the equilibrium quantity will fall. B. both the equilibrium price and quantity will rise D. the equilibrium price will rise, while the change to equilibrium quantity is indeterminate C. the equilibrium price will rise and the equilibrium quantity will decrease.

B. both the equilibrium price and quantity will rise

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

B. new technologies

When consumers and businesses have greater confidence that they will be able to repay in the 13. future, A. the quantity demanded of financial capital at any given interest rate will remain unchanged. B. the quantity demanded of financial capital at any given interest rate will shift to the left. Cthe quantity demanded of financial capital at any given interest rate will shift to the right. D. the quantity demanded of financial capital at any given interest rate will achieve

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

cer drug is discovered., 23. A more efficient means of processing algae to produce an a a result, the supply curve for the drug will A. shift to the right, increasing the price of the drug. 6. shift to the left, increasing the price of the drug. C. shift to the right, decreasing the price of the drug D. shift to the left, decreasing the price of the drug

C. shift to the right, decreasing the price of the drug

2. As the substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left. A. high-skill labor B. lower wage C. technology D. market

C. technology

5. Which of the following results in a rightward shift of the market demand curve for labor? A a decrease in labor productivity a decrease in the firm's product price C. an increase in the wage rate D. an increase in demand for the firm's product

D. an increase in demand for the firm's product

10. Other things being equal, a supply of workers tends toreal wages A. smaller; not change B. larger; increase C. smaller; decrease D. larger; decrease

D. larger; decrease

15. The laborcurve(s) will shift, if there is an increase in productivity or an increase in the demand for the final product. A. demand; left B. supply; left c. demand; right D. supply; right

D. supply; right

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

D. the quantity demanded at that price

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

a decrease in non-wage income

11. M any states do have which impose an upper limit on the interest rate that lenders can charge A. price ceiling laws 8. usury laws C. price floor laws D, minimum interest rate

8. usury laws

22. Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect the market for steel? A. There is an increase in the cost of producing steel, which shifts the supply curve of the right, thereby increasing the price of steel. B. There is an increase in the cost of producing steel, which shifts the supply curve of steel the left, thereby increasing the price of steel. C. There is a decrease in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel. D. The increase in wage costs will shift the demand curve for steel to the left, increasing the cost of steel.

C. There is a decrease in the cost of producing steel, which shifts the supply curve of steel to increasing the price of steel.

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

C. price ceilings

3. Improvements in the productivity of labor will tend to: A. decrease wages decrease the supply of labor. C. increase wages. D. increase the supply of labor.

increase wages.

1. The "law of supply" functions in labor markets; that is, a higher for labor leads to higher quantity of labor supplied. A. price B. demand C. supply D. quantity

A. price

24. Ho W do apple growers react to the news of medical research findings that suggest that eating apples leads to greater health benefits than were previously known A. They increase the supply of apples. B. They increase the quantity of apples supplied. C. They decrease the supply of apples. They decrease the quantity of apples supplied. Answer: B Reference:

B. They increase the quantity of apples supplied.

16. A straightforward example of a A. price ceiling often used for simplicity, is the interest rate. B. financial investment C rate of return D price floor

C rate of return

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

C the quantity supplied at that price.

14. 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 A. will stay the same B. will decrease C. will increase D. may increase, decrease or stay the same depending on the relative slopes.

C. will increase

19. As the complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right. A. technology B. low-skill labor C. market D. lower wage

A. technology