CH 4

If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages __________.

will increase

6. On April 1, 2009, in the middle of a recession, the government of the province of Ontario, Canada increased the provincial minimum wage from $8.75 to $9.50. What will the likely effect of this policy be?

Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate.

The supply curve of textbooks (which are produced using paper made from trees) will shift to the left in response to:

a sharp increase in the demand for and construction of wood-frame homes.

Which of the following results in a rightward shift of the market demand curve for labor?

an increase in demand for the firm's product

Which of the following will not result in a leftward shift of the market demand curve for labor?

an increase in wage rate

Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine:

both the equilibrium price and quantity will rise.

any who borrows contributes to the?

demand for financial capital

in the labor market, firms and other employers who hire labor are?

demanders for labor

what factors affect supply?

demograhic changes, required education, government policies

Improvements in the productivity of labor will tend to:

increase wages

If the demand for software engineers __________ slower than does supply, then wages of software engineers will __________.

increases; fall

Other things being equal, a __________ supply of workers tends to __________ real wages.

larger; decrease

. A straightforward example of a _______________, often used for simplicity, is the interest rate.

rate of return

The imposition of a price ceiling on a market often results in:

shortage

In labor market job seekers are what?

suppliers of labor

In financial markets, any individual or firm who saves contributes to the?

supply of financial capital

As the _____________ complement for high-skill labor becomes cheaper, the demand curve for high-skill labor will shift to the right.

technology

Derived Demand

the demand for labor is based on the demand for the good or service that is being produced with labor.

When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________.

the quantity demanded of financial capital at any given interest rate will shift to the right

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

the quantity supplied at that price.

Many states do have ____________, which impose an upper limit on the interest rate that lenders can charge.

usury laws

Are markets always in equilibrium?

No, but if there is no outside interference, they tend to move toward equilibrium.

The "law of supply" functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied.

price