Economics Chapter 13 Quiz

nonpecuniary benefits.

The nonmoney benefits a person may receive in a job are sometimes referred to by economists as nonpayment benefits. pecuniary benefits. nonpecuniary benefits. internal payments.

firms try to increase the probability of hiring good employees.

"Screening" is the process by which wages tend to be equalized as workers move from one labor market to another. firms calculate the point of MRP = MFC. firms try to increase the probability of hiring good employees. discrimination is claimed to be an "information problem."

all the firms in a specific labor market.

A market demand curve for labor shows the quantities of labor demanded by a particular firm in a specific labor market. all the firms in a specific labor market. a particular firm in various labor markets. all the firms in various labor markets.

marginal

A measure of the value that one unit of a factor adds to the firm's output is value __________ product. average marginal variable fixed

horizontal

A firm that is a price taker in a factor market faces a(n) __________ supply curve of factors. upward-sloping horizontal downward-sloping vertical

True

Employers use screening mechanisms, such as GPA, because they lack complete information about job applicants. True False

it can hire all the workers it wants to at the going wage rate.

If a firm is a factor price taker in the labor market, it must pay higher wages in order to hire additional workers. it can hire all the workers it wants to at the going wage rate. it must hire all workers who apply for a job. it will continue to hire workers as long as MFC > MRP.

True

Labor supply is a reflection of the number of persons who can actually do a job. True False

the additional cost generated by employing an additional factor unit.

Marginal factor cost (MFC) is the additional cost generated by producing an additional unit of output. the additional revenue generated by employing an additional factor unit. the additional cost generated by employing an additional factor unit. total cost from the production of a product divided by the total number of factor units used.

additional revenue generated by employing an additional factor unit.

Marginal revenue product (MRP) is the additional output generated by employing an additional factor unit. additional profit generated by employing an additional factor unit. additional revenue generated by employing an additional factor unit minus the additional cost. additional revenue generated by employing an additional factor unit. total revenue from the sale of a product divided by the total output of the product.

marginal physical product.

Marginal revenue product is equal to marginal revenue multiplied by average physical product. marginal physical product. average total cost. marginal cost.

derived

The demand for factors (which arises from the demand for the products that the factors help produce) is called a(n) __________ demand. derived indirect secondary expressed

the lower the elasticity of demand for the labor that produces the product.

The lower the elasticity of demand for a product, the higher the ratio of labor costs to total costs. the lower the ratio of labor costs to total costs. the lower the elasticity of demand for the labor that produces the product. the higher the elasticity of demand for the labor that produces the product.

horizontal.

The marginal factor cost (MFC) curve for a factor price taker is vertical. horizontal. downward sloping. upward sloping.

demand for a good will affect the demand for the factors used to produce that good.

The term "derived demand" refers to the idea that a change in the demand for one good, say, tennis racquets, will affect the demand for related goods, say, tennis balls. demand for a good is affected by the supply of that good. demand for a good will affect the demand for the factors used to produce that good. supply of a factor will affect the demand for that factor.

False

What looks like discrimination in the labor markets is always just a problem of the high cost of information. True False

True

When a firm decides whether or not to relocate its production to another country, they must consider both the pay of the workers and the marginal productivity of the workers. True False

screening the graduating senior.

When a prospective employer asks a graduating college senior for evidence of his grade point average (GPA), the employer is discriminating against the graduating senior. screening the graduating senior. probably just trying to intimidate the graduating senior. b and c

a and b

Which of the following can bring about an increase in the demand for labor? an increase in the demand for the product that labor produces an increase in the marginal physical product of labor a decrease in the price of labor (wage rate) a and b

In the short run, demand conditions are not the same in all labor markets.

Which of the following is a reason why wage rates differ? In the short run, demand conditions are not the same in all labor markets. Some jobs have special nonpecuniary aspects. Labor is not homogeneous. b and c a, b, and c