Mirco Exam 3 review questions

Which of the following is an example of statistical discrimination?

An employer relies on stereotypes in making hiring decisions.

Which of the following is consistent with current U.S. law on monopolies?

Gaining monopoly or market power through specified exclusionary business practices is illegal.

The market power of a firm is its

Oligopoly

Which of the following is an example of a labor market characterized by compensating differentials?

Outside window washers of skyscrapers earn higher salaries than outside window washers of single family homes.

The government increases the training requirements to obtain an electrician's license. What impact will this have in the labor market for electricians?

The supply of electricians will decrease, resulting in a higher wage and lower quantity of labor

Workers on the night shift at a factory earn more per hour than workers on the day shift, although their human capital and productivity are the same. This is an example of:

a compensating differential

A tax designed to induce people to take account of the negative externalities that they cause is referred to as _____ tax.

a corrective

Walmart has a large aisle that displays many different types of shampoos. This observation indicates that the shampoo market is

a monopolistically competitive market.

When a good is nonrival and nonexcludable, the good is referred to as:

a public good

An externality is defined as:

a side-effect of an activity that affects bystanders thats whose interest are not taken into account

A characteristic of oligopoly that is not present in any other market structure is that there

are a small number of sellers with considerable market power.

The marginal private benefit curve is also the:

demand curve

The labor demand is a/an _____________ demand

derived

When a seller is able to differentiate its product successfully, the seller

gains market power.

Companies with market power face a trade-off between

having a higher profit margin and selling a larger quantity.

The accumulated knowledge and skills that make a worker more productive are known as:

human capital

There is evidence that, despite antidiscrimination laws, discrimination _____ in labor markets.

impacts wages

When someone can enjoy the benefits of a good without bearing the cost, the good:

is subject to the free-rider problem

A corrective tax designed to resolve a negative externality problem is typically set at an amount equal to the _____ cost.

marginal external

Which of the following is the amount of a corrective tax that would resolve a negative externality problem?

marginal external cost

An employer's labor demand curve is equal to the

marginal revenue product curve

The marginal private benefit plus the marginal external benefit equals the ____ benefit.

marginal social

When a company has market power, it is _____ in its market.

not a price-taker

What type of relationship exists between the level of a company's market power and the price that its owner is able to charge for its product?

positive

Marginal social cost equals marginal _____ cost plus marginal _____ cost.

private, external

In a market, when a company's owner tries to make its product slightly different from the output of other companies so that it is more attractive to buyers, the company is engaged in

product differentiation.

When the income effect dominates, an individual's labor supply curve

slopes downward

With a _____ number of sellers in a market, _____ market power tends to exist in the market.

smaller; more

The _________________ measures how people respond to a change in relative prices when the wage rises.

substitution effects

In a labor market, workers _____ labor, and employers _____ labor.

supply, demand

An efficiency wage improves efficiency when:

the increase in worker effort and reduced turnover cover the cost of the higher wage

An employer should hire one more worker if

the marginal benefit exceeds the marginal cost

Imperfect competition stems from _____ and whether or not the product is _____.

the number of sellers; differentiated

When making labor supply decisions, your options are

working or leisure