Chapter 8 SmartBook

In the labor market, households and individuals ____ labor.

supply

Which of the following factors lead to a decrease in the demand for labor?

- A decrease in the price of workers' output - An decrease in the relative price of the product.

Which of the following factors lead to an increase in the demand for labor?

- An increase in the relative price of the product. - An increase in worker productivity

Which of the following are accurate statements about international trade?

- It hurts workers who produce goods and services that are imported from abroad. - It increases efficiency.

Which of the following factors account for the increase real wages in industrialized countries over the last 100 years?

- Large increases in capital - Technological progress

Skill-biased technological change will:

- create incentives for workers to acquire education and skills - increase wage inequality

Since WWII, the change in real wage rates:

- has been consistently positive. - has been positive, but has slowed down.

Over the last several decades, the labor supply has increased because of ______________.

- increases in women's labor force participation rates - immigration - baby boomers entering the workforce

Which of the following does international trade lead to for those workers in industries that face competition from imports?

- lower wages - lower employment

Consider the table below, the marginal product of the 3rd worker is ____

4

Consider the table below, if apple pies sell for $12, then the value of the marginal product of the 3rd worker is ____ dollars

48

Consider the table below, the marginal product of the 2nd worker is ____

5

Consider the table below, if apple pies sell for $10, then the value of the marginal product of the 2nd worker is ____ dollars

50

Which of the following is an example of frictional unemployment?

A worker who is unemployed while searching for a job that is a good match for her skill set.

Why might workers leave importing industries and seek skills/jobs in exporting industries?

International trade lowers the wages of workers in importing industries and increases the wages of workers in exporting industries.

The U.S. has experienced __________ in wage inequality in recent decades.

a substantial increase

The value of marginal product of labor is the _____ generated by hiring an additional worker.

additional revenue

The large increase in real wages in industrialized countries over the last 100 years is primarily the result of:

an increase in the demand for labor

As firms hire more workers, diminishing returns to labor implies that the marginal product of each additional worker a firm hires will Blank______ when capital and other inputs are held constant.

decrease

The demand for labor will decrease if the real price of workers' output _____.

decreases

International trade increases wage inequality by _____ the wages of workers who produce products that are imported and _____ the wages of workers who produce products that are exported.

decreasing; increasing

In the labor market, firms ________ labor; households and individuals _________ labor

demand; supply

International trade increases wage inequality by increasing the wages of workers in _____ industries and decreasing the wages of workers in _____ industries.

exporting; importing

The best way for governments to deal with the problems in the domestic labor market created by international trade is to try to limit international trade.

false

If a worker is unemployed because he has just quit his job in order to find another job that pays better, then this is a type of _____ unemployment.

frictional

One benefit of ______ unemployment is that job search may lead to better matches between workers and jobs, leading to higher output.

frictional

The type of unemployment that is associated with the process of matching workers to jobs is called ____ unemployment, while the unemployment that consists of workers who lack marketable skills is called ____ unemployment, and the type of unemployment that is caused by a decline in total spending is called ____ unemployment.

frictional; structural; cyclical

An individual is willing to supply labor whenever their real wage is _____ than their reservation price.

greater

Governments can best deal with the problems in the domestic labor market created by international trade by _____.

helping workers in negatively affected industries find new jobs

For workers who produce goods and services that are exported abroad, international trade leads to which of the following:

higher employment; higher wages

International trade will lead to _____ in exporting industries.

higher wages and higher employment

If the introduction of computers increases the marginal product of higher-skilled workers relative to that of lower-skilled workers, then the demand for _____ workers will increase relative to the demand for _____ workers.

higher-skilled; lower-skilled

Generally, if the value of the marginal product of labor is greater than the wage rate, the firm should _____.

hire additional workers

Even though international trade increases economic efficiency, it will tend to hurt workers who produce goods and services that are _____.

imported from abroad

International trade will decrease the demand for labor in _____ industries and increase the demand for labor in _____ industries

importing; exporting

An increase in the retirement age will _____ the supply of labor.

increase

If technological change increases the marginal product of higher-skilled workers relative to that of lower-skilled workers, then wage inequality will _____.

increase

If the real price of the output that workers produce increases, then the demand for labor will _____.

increase

Skill-biased technological change will _____ workers' incentives to acquire education and training, provided they are at the early stages of career development.

increase

International trade will ____ the demand for labor in exporting industries and _____ the demand for labor in importing industries.

increase; decrease

In 2009, the U.S. government extended the number of weeks that unemployed workers could receive unemployment benefits from 26 weeks to 99 weeks. This policy change is likely to have _____ the duration of unemployment spells.

increased

Over the last several decades, the rise in women's labor force participation rates, the entry of baby boomers into the workforce and the increase in immigration have _____ labor supply.

increased

Skilled-biased technological change _____ the demand for higher-skilled workers relative to the demand for lower-skilled workers.

increases

Skilled-biased technological change increases wage inequality by ______ the wages of higher-skilled workers relative to the wages of lower-skilled workers.

increasing

If international trade lowers the wages of workers in importing industries and increases the wages of workers in exporting industries then this creates an incentive for workers to _____.

leave importing industries and find jobs in exporting industries

In recent years, the rate of unemployment in the U.S. has been ____ than in western Europe.

lower

International trade will lead to _____ in importing industries.

lower wages and lower employment

Wage in equality in the U.S and high unemployment rates in Europe suggest that

many workers are not sharing in worldwide economic growth and prosperity.

History is replete with examples of workers who opposed ____ out of fear that their skills would become less valuable.

new technology

In England, in the early nineteenth century, rioting workers destroyed newly introduced labor-saving machinery. The name of the workers' reputed leader, Ned Ludd, has been preserved in the term Luddite, meaning a person who is opposed to the introduction of ____

new technology

The minimum level of compensation that leaves someone indifferent between working and not working is their _____.

reservation price

An increase in immigration will lead the labor supply curve to _____.

shift to the right

A glass blower who is unemployed because his skills are no longer marketable is an example of ______.

structural unemployment

Diminishing returns to labor refers to the tendency for _____ to decrease as firms hire additional workers when the amount of capital and other inputs is held constant.

the marginal product of labor

A firm will hire a worker if and only if ____

the value of the marginal product of labor is greater than or equal to the wage rate.

The extra revenue gained by hiring an additional worker is the _____.

value of the marginal product of labor