Chapter 4 Quiz

As the _______ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the _______. a. Market; right b. Market; left c. Technology; right d. Technology; left

d. Technology; left

A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will: a. Shift to the right, increasing the price of the drug b. 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

Which individual would be negatively impacted the most by an increase in minimum wage. a. A recent college graduate b. A teenager still living at home c. An older worker anticipating retirement in the coming year d. A mother re-entering the workforce

B. A teenager still living at home

The "law of supply" functions in labor markets; that is, a higher _____for labor leads to a higher quantity of labor supplied a. Price b. Demand c. Supply d. Quantity

a. Price

Many economist 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

Are markets always in equilibrium? a. No, they never "settle down" into a stable price and quantity b. No, but if there is no outside interference, they tend to move toward equilibrium c. Yes, because very few things tend to alter supply and demand d. Yes, they are always at the equilibrium point, or very close to it

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

In the United States, a typical credit card interest rate ranges from ___________ per year. a. .2% to .8% b. 2% to 8% c. 12% to 18% d. 22% to 28%

c. 12% to 18%

Price floors create all of the following except: a. Surpluses b. A misallocation of resources c. Shortages d. Lost gains from trade (deadweight loss)

c. Shortages

When the consumers and businesses have greater confidence that they will be able to repay in the 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 c. The 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 equilibrium

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

Which of the following results in a rightward shift of the market demand curve for labor? a. A decrease in labor productivity b. An increase in the wage rate c. A decrease in the firm's product price d. An increase in demand for the firm's product

d. An increase in demand for the firm's product