ECON 202: PS11

Is the fact that one group in the population has higher earnings than other groups evidence of economic discrimination?

No. Differences in earnings between groups could be due to worker productivity. No. Differences in earnings between groups could be due to worker preferences.

As the wage increases,

the demand for labor curve does not shift, but the quantity demanded of labor decreases.

Which of the factors listed below does not cause the demand curve for labor to shift?

A change in the wage.

Which of the following is likely to lead to a left shift in the demand curve for labor in the petroleum extraction industry?

An increase in the price of cars.

Why is the supply curve of labor usually upward sloping?

As the wage increases, the opportunity cost of leisure increases, causing individuals to devote more time to working.

What happens as a firm increases the number of workers that it hires?

Both the marginal product of labor and the marginal revenue product of labor decrease.

The substitution effect of a wage increase

Causes a worker to supply a larger quantity of labor, and the income effect causes a worker to supply a smaller quantity of labor.

The economic penalty is not enough to eliminate discrimination because of the presence of all of the following except:

Compensating differentials

Define economic discrimination.

Economic discrimination is paying a person a lower wage or excluding a person from an occupation on the basis of an irrelevant characteristic such as gender.

Which of the following statements is true?

Lower wages are normally offered for jobs with better amenities.

One of their conclusions is that

Most of the differences in wages are due to factors other than discrimination.

If wages increase, will a worker supply more labor?

Only if the effect of the opportunity cost of leisure increasing is larger than that of the increase in purchasing power.

The condition to decide on the optimal amount of leisure is​ that:

The marginal benefit of leisure should be equal to the wage rate.

College football coaches often earn more than college professors because

The marginal revenue product of football coaches is higher.

What is the difference between the marginal product of labor and the marginal revenue product of labor for a firm in a perfectly competitive market?

The marginal revenue product of labor is equal to the marginal product of labor multiplied by the price.

The opportunity cost of leisure is

The wage rate

Ceteris paribus, which of the following is likely to happen if an industry introduces labor-saving technology?

There will be a decrease in both the wage rate and the employment levels in the industry.

Let MRP equal the marginal revenue product of labor and W equal the wage rate. When should a firm hire more workers to increase profit?

When MRP>W

A compensating differential is

When higher wages are paid to compensate a worker for unpleasant aspects of a job, such as when workers are paid higher wages for dangerous work.