Ch. 18 Homework

Figure: Market for PlumbersIf the market in this figure is in equilibrium, the hourly wage paid to plumbers is ______, and the marginal product of a plumber is ______. a. $40; $40 b. $40; $20 c. $30; $50 d. $20; $30

a. $40; $40

Refer to the table. A Major League Baseball team is considering increasing the quality of its pitching staff by hiring all-star quality pitchers. If the going salary for an all-star pitcher is $12 million per season, this team will hire ________ pitchers. a. 2 b. 5 c. 4 d. 3

a. 2

Suppose that a public accounting firm plans to hire some accountants for tax season. What will happen to the marginal product of labor as the firm hires more and more accountants? a. The marginal product of labor will decline because each subsequent accountant that is hired will be assigned to work on less important (i.e., less lucrative) tax returns. b. The marginal product of labor will not change because the practice of accounting is quite standardized, forcing all accountants to follow the uniform procedures set forth in federal tax law. c. The marginal product of labor will increase because completing and filing tax returns requires team production techniques. d. The marginal product of labor will increase because preparing tax returns requires high levels of education and experience.

a. The marginal product of labor will decline because each subsequent accountant that is hired will be assigned to work on less important (i.e., less lucrative) tax returns.

Fishing is a relatively dangerous profession, a factor that raises the wage for fishermen. a. True b. False

a. True

A high demand for labor in one industry will: a. attract workers from another industry. b. cause a shortage of workers. c. cause a surplus of workers. d. decrease the number of hours worked in that industry.

a. attract workers from another industry.

As more workers are hired, the marginal product of labor typically: a. decreases. b. increases. c. remains the same. d. oscillates more rapidly.

a. decreases.

Customer-based discrimination is weakened by: a. economic growth. b. country clubs. c. higher wages. d. segregation.

a. economic growth.

Human capital labor market issues: a. include the skills, knowledge, and experience that people obtain. b. refers to workers who do highly repetitive work, which requires little thought and creativity. c. include the equipment, tools, and computers that make workers more productive. d. refers to a worker in a capital-intensive industry.

a. include the skills, knowledge, and experience that people obtain.

A binding minimum wage is a(n) ______ for labor. a. price floor b. subsidy c. equilibrium price d. price ceiling

a. price floor

A union can raise wages by: a. promoting a smoother labor market. b. reducing the supply of labor. c. demanding better working conditions. d. increasing the demand for labor.

b. reducing the supply of labor.

A firm is willing to hire a worker when the marginal product of labor is: a. efficient. b. greater than the wage. c. less than the wage. d. equal to or less than the wage.

b. greater than the wage.

A college education in the United States: a. does not command the same high wages as it did in the past. b. has been shown to earn a wage premium. c. does not lead to any difference in wages as compared with a high school education. d. is not counted as human capital market issues.

b. has been shown to earn a wage premium.

If the marginal product of labor is decreasing in labor, then a market labor demand curve is: a. positively sloped. b. negatively sloped. c. flat. d. varied.

b. negatively sloped.

A crime scene cleaner earns about three to four times more than an office cleaner, even though neither job requires a college degree. This difference in wages: a. is solely because of differences in demand. b. reflects a compensating differential. c. is caused by differences in labor market issues. d. results from discrimination because most office cleaners are women.

b. reflects a compensating differential.

A construction company builds stone fireplaces. The market wage for a stonemason is $350 per day. The table depicts the marginal product of labor (MPL) per day for a given number of stonemasons. To maximize profits, this company should hire ______ stonemasons. a. 4 b. 5 c. 2 d. 3

c. 2

Figure: Cleaners' WagesRefer to the figure. How many workers will this firm hire at a wage of $29? a. 1 b. 0 c. 2 d. 3

c. 2

Which of the following best explains why assembly-line workers in the United States earn significantly more than assembly-line workers in Mexico?I. The supply of low-skilled laborers, such as those that work on assembly lines, is higher in Mexico.II. The demand for assembly-line workers is higher in the United States.III. Assembly-line workers are more productive in the United States. a. I and II only b. II and III only c. I, II, and III d. I and III only

c. I, II, and III

If the market wage for electrical engineers in the United States is $50 per hour, then we know that the marginal product of electrical engineers is: a. less than $50 an hour. b. approximately $50 an hour. c. at least $50 an hour. d. exactly $50 an hour.

c. at least $50 an hour.

The ______ is derived from a marginal product of labor function. a. supply of labor b. minimum wage c. demand for labor d. salary cap

c. demand for labor

If the marginal product of labor is constant in labor, then a market labor demand curve is: a. varied. b. positively sloped. c. flat. d. negatively sloped.

c. flat.

To maximize profit, a firm will hire workers when the ________ in revenue from hiring an additional worker ________ the worker's wage. a. increase; is less than or equal to b. decrease; is less than or equal to c. increase; is greater than d. decrease; is greater than

c. increase; is greater than

We often think of technology and labor as substitutes for each other, but technology can lead to the hiring of more labor if it: a. decreases the average total cost of production. b. decreases the compensating differential. c. increases the marginal product of labor. d. increases the opportunity cost of labor.

c. increases the marginal product of labor.

An individual's labor supply curve: a. is always upward sloping. b. is identical to the market labor supply curve. c. may be backward bending if the wage is high enough. d. is typically vertical.

c. may be backward bending if the wage is high enough.

As the wage for janitors falls, firms will demand: a. fewer janitors. b. a constant number of janitors. c. more janitors. d. no janitors.

c. more janitors.

If the marginal product of labor is decreasing in labor, then a firm-level labor demand curve is: a. varied. b. flat. c. negatively sloped. d. positively sloped.

c. negatively sloped.

Marián Hossa was paid $7.4 million by the Detroit Red Wings for the 2008-2009 season. We can conclude that: a. Marián Hossa was overpaid. b. the marginal product of labor of Marián Hossa must be less than $7.4 million. c. the Red Wings expected Marián Hossa to increase the team's revenue by at least $7.4 million. d. the marginal product of labor of Marián Hossa is 0.90 times the marginal cost.

c. the Red Wings expected Marián Hossa to increase the team's revenue by at least $7.4 million.

Table: Sunshine Flower Vase Co.Refer to the table. What is the marginal product of labor for the fifth worker? a. $135 b. $1,580 c. $1,760 d. $180

d. $180

In general, wages are determined: a. based on the average wage for all individuals in a particular country. b. based on the average marginal product of labor of workers in similar countries. c. by the skills of the worker, regardless of the country he or she works in. d. by the skills of the worker and the productivity of the entire economy.

d. by the skills of the worker and the productivity of the entire economy.

When labor demand decreases, the wage is expected to: a. remain the same. b. increase. c. change in an indeterminate direction. d. decrease.

d. decrease.

The increase in a firm's revenues created by hiring an additional worker is called: a. marginal revenue. b. marginal revenue of labor. c. marginal product. d. marginal product of labor.

d. marginal product of labor.