Microecon Exam 3
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
When a good is nonrival and nonexcludable, the good is referred to as:
a public good
An efficiency wage is NOT _____ but rather _____.
a reward; an incentive
An externality is defined as:
a side-effect of an activity that affects bystanders whose interests are not taken into account
The marginal revenue product of labor is equal to:
MP(L) x P
A signal is:
an action taken to credibly convey information that is hard for someone else to verify
What is an example of statistical discrimination?
an employer relies on stereotypes in making hiring decisions
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
When a company has market power, it is _____ in its market.
not a price-taker
The marginal private benefit curve is also the:
demand curve
The labor demand is a/an _____________ demand
derived
A compensating differential is a:
difference in wages that offsets the desirable or undesirable aspects of a job
What is a higher wage paid to encourage greater worker productivity?
efficiency wage
The marginal product of labor is the
extra production that occurs from hiring an extra worker
When a seller is able to differentiate its product successfully, the seller
gains market power
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
The supply curve of a firm is also its _____ cost curve.
marginal private
Marginal revenue product is the
marginal revenue from hiring an additional worker
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
Marginal social cost equals marginal _____ cost plus marginal _____ cost.
private; external
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 effect
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
What is the amount of a corrective tax that would resolve a negative externality problem?
the marginal external cost
In a natural monopoly, what deters new sellers from entering the market?
the new seller would have much higher costs than the existing large seller in the market
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
When making labor supply decisions, your options are
working or leisure
