(Complete) Chapter 13: Local markets, poverty, and Income Distribution
The set of worker characteristics such as education, experience and work habits that affect the value of a worker's marginal product is referred to as a worker's:
Human capital
An amalgam of factors such as education, training, experience Intelligence, energy, work habits, trustworthiness, and Initiative that affects the value of a worker's marginal
human capltal
True or False: Two workers with the same amount of human capital may earn different wages if one of them belongs to a labor union and the other does not.
True
In a competitive labor market, a worker's wage will be ________ the value of the marginal product of labor.
equal to
In a competitive labor market, a worker's wage will be, of labor the value of the marginal product
equal to
A theory of pay determination that says a worker's wage will be proportional to his or her stock of human capital product
human capital theory
As wages rise, the _____ effect will lead people to consume more leisure.
income
If the wages in a given occupation increase, you would generally expect the quantity of labor supplied in that occupation to
increase
Winner-take-all markets are likely to occur in situations in which:
technology allows the most talented individuals to serve broad markets.
The marginal product of labor is
the additional output a firm gets by employing one additional unit of labor.
A poverty threshold is
the level of income below which the government classifies a family as poor.
A _____ labor market is one in which small differences in human capital translate into large differences in pay.
winner-take-all
One in which small differences in ability or other dimensions of human capital translate into large differences in pay
winner-take-all market
According to human capital theory, jobs that require more human capital will tend to pay _______ otherwise similar jobs.
More than
Since 1980, the growth in real earnings has been the largest for the top:
1 percent of U.S. earners
Given the numbers in the table below, if the net price of each unit of output is $10, and the competitive market wage is $125 per week, then the firm should hire ______ workers. #of Workers Total output/wk 0 0 1 20 2 35 3 45 4 50
2
A system under which the government would grant every citizen a cash payment each year, financed by an additional tax on earned income is known as
A negative income tax
An in-kind transfer is
A payment made in the form of a good or service
One concern economists have about the minimum wage is that it:
Could lower employment
Means-tested welfare programs typically _______ people's incentives to work.
Decrease
A payment made not in the form of cash but in the form of a good or service
In-kind transfer
Since 1980, Income inequality in the United States has:
Increased sharply
The earned-income tax credit (EITC) is a policy under which
Low-income workers receive credits on their federal income tax
The additional output a firm gets by employing one additional unit of labor is known as
Marginal product of Labor (MP)
federal law that transferred responsibility for welfare programs from the federal level to the state level and placed a five-year lifetime limit on payment of AFDC benefits to any given recipient
Personal Responsibility Act the 1996
Labor unions ______ the value of total output.
Reduce
What is an employer's reservation price for a worker?
The most the employer could pay without suffering a decline in profit
A worker's marginal product is the extra output the firm gets as a result of hiring that worker. When we multiply a workers marginal product by the net price for which each unit of the product sells, we get that worker's _________
Value of marginal product of labor (VMP)
The dollar value of the additional output a firm gets by employing one additional unit of labor is known as
Value of marginal product of labor (VMP)
The value of the marginal product of labor is the dollar value of the _____ output a firm gets by employing one additional unit of labor.
additional
As wages rise, the number of hours people choose to work:
could increase or decrease
In the short-run, as firms hire additional workers, the marginal product of labor
decreases
A means-tested benefit program is one in which the benefit level
decreases as the recipient earns additional income
Differences in _______ can result in some kinds of human capital being more valuable than others
demand
A decrease in the price of beer will lead the number of workers employed in beer manufacturing to:
fall
If the demand for car mechanics falls, the equilibrium wage of car mechanics will tend to:
fall
If the value of the marginal product of labor is greater than the market wage, the firm should
hire additional workers
In the short run, the value of the marginal product of labor decreases as the quantity of labor employed by a firm _______.
increases
A ________ is a group of workers who bargain collectively with employers for better wages and working conditions
labor union
A group of workers who bargain collectively with employers for better wages and working conditions
labor union
Discriminatory employers who pay men more than women simply because they prefer working with men are likely to earn ______ employers who do not discriminate.
lower profits than
The additional output a firm gets by employing one additional unit of labor is the
marginal product of labor
A benefit program whose benefit level declines as the recipient earns additional income
means-tested
Suppose Ellen and Suzanne are both nurses at the same hospital. Their jobs are identical, but Ellen works the night shift and Suzanne works the day shift. We would expect Ellen to earn ______ Suzanne.
more than
If the value of the marginal product of labor is $16 per hour, and the equilibrium wage rate is $12 per hour, then the firm should hire
more workers
A compensating wage differential is a difference in the wage rate that
reflects the attractiveness of a job
The _______ effect leads people to consume less leisure as wages rise.
substitution
A firm's labor demand curve is its
value of marginal product of labor curve.
