MicroEconomics
Which of the following is an example of wage disparity due to compensating differentials?
Crab fishermen on the Bering Sea earn more than clerks who sell goldfish at a pet store.
Phil's Copy Studio pays its workers $60 per day and sells poster-size copies for $10 per print. Now suppose during the holiday season the price of poster-size copies increases to $12. What happens?
The demand for labor increases.
Suppose the labor market for plumbers is in equilibrium. Which of the following might DECREASE the wage for plumbers?
Unemployed manufacturing workers attend technical schools to learn the plumbing trade.
Which of the following will NOT shift the labor supply curve?
a change in the wage rate
When the demand for automobiles is high, the demand for workers who build automobiles is high. This relation between the market for automobiles and the market for the labor that builds automobiles is why demand in a factor market is called:
a derived demand.
Barry's Brewpub is considering hiring more brewmasters. The market wage for a brewmaster is $120 per day. The average brewmaster produces 40 pints of beer per day, but Barry expects the next brewmaster to produce only 20 pints per day. Assuming the market for beer is perfectly competitive, Barry's Brewpub will hire another brewmaster only if:
a pint of brew sells for $6 or more.
Because the efficiency wage is _____ the equilibrium wage, it may lead to a _____ of labor.
above; surplus
Over the past several years, the demand for phone operators has fallen dramatically. Which of the following would account for this development?
an increase in the number of automated answering services
If a firm hires labor such that W > VMPL, then profit:
can be increased by hiring less labor.
In the past 30 years, the ability of unions to increase wages and improve working conditions for their members has:
decreased.
For the Tampa Bay Rays baseball team, the value of the marginal product curve is the team's labor _____ curve. This means the marginal product curve has a _____ slope.
demand; negative
A new teacher often makes less than a teacher with 20 years' experience because of:
differences in human capital.
Which of the following is NOT a factor of production at a college?
electricity
A _____ wage will _____ the _____ leisure.
higher; increase; opportunity cost of
Liyun owns a small flower shop, and the industry is perfectly competitive. She is considering whether to hire an additional worker. The wage rate for the worker is $500 per week; the marginal product of the additional worker would be 100 units per week and the price of the units is $10 each. What should Liyun do?
hire the additional worker
Lisa works 46 hours a week at $10 an hour. If her wage increases to $16.50:
if leisure is a normal good, the income effect implies that she will work less.
There will be an increase in factor demand because of a(n) _____ in the price of the _____.
increase; good the factor produces
If a firm hires labor and with its current employees W = VMPL, then profit:
is maximized.
As a rule, a profit-maximizing restaurant owner employs each factor of production up to the point at which the value of the marginal product of the _____ unit of the factor employed is _____ that factor's price.
last; equal to
According to the _____, in a perfectly competitive economy each factor of production is paid its equilibrium value of the marginal product.
marginal productivity theory of income distribution
Barry's Brewpub is considering hiring more brewmasters. A pint of brew sells for $3. The market wage of a brewmaster is $150 per day. Assuming that the market for beer is perfectly competitive, Barry's Brewpub will hire another brewmaster only if Barry believes the new brewmaster will:
produce 50 or more pints per day.
(Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers. If the equilibrium market wage rate for bricklayers rises from $80 to $100, the _____ bricklayers will _____.
quantity demanded of; fall
(Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers. If the equilibrium market wage for bricklayers is $100 per day, _____ bricklayers will be hired by this masonry firm.
six
A backward-bending supply curve of labor shows that at relatively low wages the _____ effect dominates the _____ effect, and the supply curve has a _____ slope.
substitution; income; positive
The price of an extra hour of leisure is:
the hourly wage rate.
An increase in the market demand for electricians might occur if:
the price of electrical repair and installation services rises.
Phil's Copy Studio pays its workers $60 per day and sells poster-size copies for $10 per print. If the market wage rises to $70:
the quantity demanded of labor decreases, but the demand for labor curve does not shift.
Tim works 51 hours per week, and his wage is $35 per hour. If his wage increases to $70 per hour:
the substitution effect implies that he will work more.
If the wage rate rises, firms will find that:
they move upward and to the left along the labor demand curve.
The individual producer's labor demand curve is the:
value of the marginal product of labor curve.