Chapter 16 ( the labor market)
For an individual, the opportunity cost of working is the:
O Value of leisure time that must be given up in order to work.
An increase in the "generosity" of welfare programs would cause:
A decrease in labor supply and an increase in the EQ wage rate
Democrats argue that labor demand is so jobs will be lost when the minimum wage is raised.
Inelastic: few
The willingness and ability to work specific amounts of time at alternative wage rates in a given time period, ceteris paribus, is what Economists refer to as:
Labor Supply
If the Income Effect dominates the Substitution Effect at all wage rates, then the individual's labor supply curve will be:
Negatively sloped
Suppose you are told that the MPP of an additional worker is 20 units of output per hour. The output produced by workers is sold to customers at a price of $6 per unit. The current wage rate for workers in this occupation is $100 per hour. The Marginal Revenue Product (MRP) of this worker is:
$120 per hour
This individual works how many hours when her wage rate is $10 per hour?
22 hours per week
Šuppose you are told that the MPP of an additional worker is 12 units of output per hour. The output produced by workers is sold to customers at a price of $3 per unit. The current market wage rate for workers in this occupation is $40 per hour. The Marginal Revenue Product (MRP) of this worker is:
$36 per hour
At the equilibrium wage rate, there are people who are unemployed.
0
When considering the supply of labor, the Income Effect claims that:
A higher wage rate allows people to reduce their hours worked without necessarily reducing the size of their paychecks.
The minimum wage impacts a competitive labor market by causing:
An increase in the quantity of labor supplied and a decrease in the quantity of labor demanded.
Suppose you are told that the MPP of an additional worker is 9 units of output per hour. The output produced by workers is sold to customers at a price of $2 per unit. The current wage rate for workers in this occupation is $18 per hour. The Marginal Revenue Product (MRP) of this worker is:
O $18 per hour
If the Substitution Effect dominates the Income Effect at all wage rates, then the individual's labor supply curve will be:
Positively sloped
Statement 1: The market supply of labor represents the sum of all individual labor supply decisions. Statement 2: Like individual labor supply curves, the market supply of labor curve can be negatively sloped.
Statement 1 is correct and Statement 2 is incorrect.
Households (groups of consumers) operate on the side of the Labor Market and on the - side of the Product Market.
Supply; Demand
The concept of Marginal Physical Product (MPP) is designed to measure:
The additional output produced when the firm adds the next worker to its production process
The term Cost Efficiency refers to the:
The amount of additional output produced when an extra dollar is spent on a resource.
The concept of Marginal Revenue Product (MRP) is designed to measure:
The value of the additional output produced when the firm adds the next worker to the production process
Which of the following is NOT a determinant of the Market Supply of Labor?
The wage rate
Which of the following is true about the equilibrium wage in the labor market?
There is no unemployment in this market at the equilibrium wage.
In competitive labor market, when labor productivity rises, wages for workers:
Can increase without a decrease in the number of jobs available
At the equilibrium wage rate, there are people who are employed.
2200
An increase in the labor productivity of these workers would cause:
An increase in labor demand and an increase in the EQ wage rate
Which of the following most clearly illustrates the concept of derived demand?
An increase in the demand for mental health counseling leads to an increase in the demand for people with college degrees in psychology and social work.
As an individual earns additional income, the marginal utility of income tends to:
Decrease
When a firm hires additional workers, the Marginal Physical Product (MPP) of labor will eventually:
Decrease because each worker now has less capital and other resources to work with
Firms (and their owners) operate on the side of the Labor Market and on the side of the Product Market.
Demand; Supply
In a competitive labor market, the Market Labor Demand curve is and the Market Labor Supply curve is sloping.
Downward; upward
As more hours are worked, the marginal utility of leisure time tends to:
Increase
How is the equilibrium wage rate determined in a competitive labor market?
It is determined by the interaction between Market Labor Demand and Market Labor Supply.
Suppose you are told that the MPP of an additional worker is 12 units of output per hour. The output produced by workers is sold to customers at a price of $3 per unit. The current market wage rate for workers in this occupation is $40 per hour. Under these conditions, should the firm employ an additional worker?
No, since the market wage rate is greater than the worker's MRP.
This individual works the greatest number of hours when her wage rate is:
O $20 per hour
The equilibrium wage rate in this competitive labor market is:
O $9 per hour
If a minimum vuge of $12 per hour was imposed on this labor market, business owners would be willing to hire people at this wage rate.
O 1700
This individual works how many hours when her wage rate is $28 per hour?
O 18 hours per week
In the US the federal minimum wage was instituted in the year in order to ensure:
O 1938; a basic standard of living for workers.
If a minimum wage of $12 per hour was imposed on this labor market, there would be people who would be willing and able to work at this wage rate.
O 2700
A decrease in the demand for the output produced by these workers would cause:
O A decrease in labor demand and a decrease in the EQ wage rate
When considering the supply of labor, the Substitution Effect claims that:
O A higher wage rate encourages people to work more hours.
If a minimum wage of $12 per hour were imposed on this labor market:
O A surplus of 1,000 workers would emerge
The removal of restrictions on immigration to the United States would cause:
O An increase in labor supply and a decrease in the EO wage rate
Statement 1: Marginal Revenue Product (MRP) is a reflection of the economic value of a worker to the firm. Statement 2: Marginal Revenue Product (MRP) establishes an upper limit to the wage rate that a firm will pay to a worker.
O Both statements are correct.
Assume the apple market is competitive. If citizens want wages and the number of available jobs for apple pickers to increase, the best strategy would be to:
O Buy more apples.
An individual firm operating in a competitive labor market:
O Can hire all the workers it desires at the market wage rate
If a worker's contribution to the output of a firm is difficult to measure (like with a college professor or corporate CEO), an appropriate wage rate can be determined by:
O Documenting the wage rate the person could receive in his best alternative job.
Republicans argue that labor demand is so jobs will be lost when the minimum wage is raised.
O Elastic: many
The quantities of labor employers are willing and able to hire at alternative wages in a given time period, ceteris paribus, is what Economists refer to as:
O Labor Demand
For this individual, over which wage rate range does the Substitution Effect dominate her labor supply choice?
O Over the $0 to $20 per hour wage rate range
For this individual, over which wage rate range does the Income Effect dominate her labor supply choice?
O Over the $20 to $32 per hour wage rate range
When Economists say that the demand for labor is a derived demand, they mean that it is:
O Related to the demand for the good or service that labor is producing.
When the minimum wage is raised in a competitive labor market:
O Some workers are better off and some are worse off.
In a competitive labor market, the firm's demand curve for labor is:
O The marginal revenue product curve
In a competitive labor market, an individual firm should continue to hire workers up to the point where:
O The next worker's Marginal Revenue Product = the market wage rate.
What's more valuable: more money or more time to enjoy your life? According to the survey on page 338 of your textbook, a majority people who live in and would prefer more money, and a majority of people who live in and would prefer more time to enjoy life.
O US and Japan; Mexico and India
What will happen to wages and the level of employment in a competitive market when the government LIMINATES a minimum wage, ceteris paribus?
O Wages will fall but employment will rise.
Suppose you are told that the MPP of an additional worker is 20 units of output per hour. The output produced by workers is sold to customers at a price of $6 per unit. The current wage rate for workers in this occupation is $100 per hour. Under these conditions, should the firm employ an additional worker?
O Yes, since the worker's MRP is greater than or equal to the market wage rate.
According to the textbook, the reward from working comes in two forms. They are:
OA paycheck and satisfaction from working
Suppose a U.S. automotive manufacturer was considering moving to Mexico to take advantage of the lower wage rates for unskilled Mexican labor. The typical Mexican worker could produce twenty cars per day, while the firm's typical U.S. worker can produce fifty cars per day. If the firm currently pays its U.S. workers an hourly wage of $25, economic theory suggests that
The firm should move to Mexico only if the Mexican hourly wage is less than $10.
In 1890, the average worker in the US was employed for 60 hours per week at an average hourly wage rate of $0.20. Today, the typical worker in the US is employed for approximately 34 hours per week at an average hourly wage rate of $18.00. According to the Required Course Textbook, what explains this interesting observation?
The growth of income transfer programs has made is less costly to be a non-working American.
Suppose you are told that the MPP of an additional worker is 9 units of output per hour. The output produced by workers is sold to customers at a price of $2 per unit. The current market wage rate for workers in this occupation is $18 per hour. Under these conditions, should the firm employ an additional worker?
Yes, since the worker's MRP is greater than or equal to the market wage rate.