Chapter 8

Which of the following factors lead to decrease in the demand for labor?

- a decrease in the price of worker's output - a decrease in the relative price of the product

Which of the following factors are likely to lead to an increase in the supply of labor.

- an increase in immigration - an increase in the population - an increase in the fraction of women who want to work

For workers who produce goods and services that are exported abroad, international trade leads to which of the following:

- higher wages - higher employment

Over the last several decades, the labor supply has increased because of

- increases in women's labor force participation rates - immigration - baby boomers entering the workforce

Which of the following does international trade lead to for those workers in industries that face competition from imports?

- lower employment - lower wages

Supposed that with one worker, you produce 100 bagels per day. With two workers, you produces 210 bagels per day. And with three workers, you produce 300 bagels per day. The addition of the third worker

- suggest diminishing marginal product of labor - adds a positive amount to total product

Which of the following factors account for the increase real wages in industrialized countries over the last 100 years?

- technological progress; technological progress has increased worker productivity leading to an increase in the demand for labor and higher equilibrium wages - large increases in capital; increase in capital have improved worker productivity leading to an increase in the demand for labor and higher equilibrium wages

Select the five recent trends of the labor market

- the rate of job growth has slowed - Western Europe has experienced higher unemployment that the U.S. - increased U.S. wage inequality - the real wage growth rate has slowed - substantial growth in the real wages in industrialized countries

Skill-biased technological change will

-create incentives for workers to acquire education and skills - increase wage inequality

Which of the following is an example of frictional unemployment?

A worker who is unemployed while searching for a job that is a good match for her skill set

The increase in unemployment in the United States that accompanied the recession that started in December 2007 is an example of

Cyclical unemployment

As firms hire more workers, diminishing returns to labor implies that the marginal product of each additional worker a firm hires will ___ when capital and other inputs are held constant

Decrease

International trade increases wage inequality by ____ the wages of workers who produce products that are imported and ____ the wages of workers who produce products that are exported

Decreasing; increasing

In the labor market, firms

Demand labor

True or false: the best way for government to deal with the problems in the domestic labor market created by international trade is to try to limit international trade

False; there are clear efficiency gains to international trade. Thus, for example, it would be better for governments allow international trade and help displaced workers find new jobs or provide government payments to workers who are unable to find new jobs

One benefit of ___ unemployment is that job search may lead to better matchers between workers and jobs, leading to higher output.

Frictional

Short-term unemployment associated with the process of matching workers with jobs is known as

Frictional unemployment

The type of unemployment that is associated with the process of matching workers to jobs is called ___ unemployment, while the unemployment that consists of workers who lack marketable skills is called ___ unemployment, and the type of unemployment that is caused by a decline in total spending is called ___ unemployment

Frictional; structural; cyclical

An individual is willing to supply labor whenever their real wage is ___ than their reservation price

Greater

Government can best deal with problems in the domestic labor market created by international trade by

Helping workers in negatively affected industries find new jobs

government can best deal with the problems in the domestic labor market created by international trade by

Helping workers in negatively affected industries find new jobs

Even though international trade increases economic efficiency, it will tend to hurt workers who produce goods and services that are

Imported from abroad

International trade will decrease the demand for labor in ___ industries and increase the demand for labor in ___ industries

Importing; exporting

International trade will decrease the demand for labor in ___ industries and increase the demand of labor in __ industries.

Importing; exporting

During the twentieth century, a measurable, substantial growth in real wages has occureed

In all industialized countries

According to economic theory, an increase in the minimum wage will lead unemployment to

Increase

According to economic theory, an increase in the minimum wage will lead unemployment to ___

Increase

By reducing worker's incentives to look for jobs, unemployment insurance is typically thought to ____ the duration of unemployment spells

Increase

The demand for labor will increase if the real price of workers' output

Increase

International trade will ____ the demand for labor in exporting industries and ___ the demand for labor in importing industries

Increase; decrease

Skilled-biased technological change ____ the demand for higher-skilled workers relative to the demand for lower-skilled workers

Increases

Skilled-biased technological change increases wage inequality by ___ the wages of higher-skilled workers relative to the wages of lower-skilled workers

Increasing

Why might workers leave importing industries and seek skills/jobs in exporting industries?

International trade lowers the wage of workers in importuning industries and increase the wages of workers in exporting industries

Which of the following are the accurate statements about international trade?

It hurts workers who produce goods and services that are imported from abroad - it increases efficiency

Which of the following factors account for the increase real wages in industrialized countries over the last 100 years?

Large increases in capital; increases in capital have improved worker productivity leading to an increase in the demand for labor and higher equilibrium wages Technological progress; technological progress has increases worker productivity leading to an increase in the demand for labor and higher equilibrium wages

In recent years, the rate of unemployment in the U.S. has been ___ than in western Europe

Less

In recent years, the rate of unemployment in the U.S. has been ___ than in Western Europe

Lower

The extra output gained by hiring an additional worker is the

Marginal product of labor

The minimum level of compensation tha leaves someone indifferent between working and not working is their

Reservation price

If worker productivity increase, the labor demand curve will

Shift to the right

_______________ technological change is technological change that affects the marginal products of higher-skilled workers differently from those of lower-skilled workers

Skill-biased

Sluggish productivity growth since the 1970s combined with rapid increases in the supply of labor help explain the

Slowdown in real wage growth since the 1970s despite rapid employment growth

An auto workers in Michigan who loses his job because the company relocated the plant to another country is an example of

Structural unemployment

Long-term unemployment that arises due to lack of skills, language barriers, discrimination, skill mismatch, and structural features of the labor market such as union and minimum wage laws is ________

Structural unemployment

A firm will hire a worker if and only if

The value of the marginal product of labor is greater than or equal to the wage rate

European labor markets tend to be more regulated than those in the US. As a results,

Unemployment is higher in Europe

___ will reserve some of the inequality caused by international trade

Worker mobility between Industries

The value of marginal product of labor is the _____ generated by hiring an additional worker

additional revenue

Cyclical unemployment is

the extra unemployment that occurs during periods of recession