Econ 202 Module 11 quizzes
Most economists believe that a small amount of the gap between the wages of white males and the wages of other groups is due to discrimination. Which of the following factors is not another factor that explains part of this gap? geographic location differing preferences for jobs differences in education differences in experience
A
The demand for labor is described as a derived demand because... it is derived by workers seeking to earn income to fund the consumption of goods and services. it is derived from the demand for products that use labor in the production process. it is derived by producers seeking to make profits by starting new businesses. it is derived from government institutions which rely on labor markets for the purpose of raising tax revenue.
B
Employers engaging in ________ try to enhance their profits.
statistical discrimination
An increase in the price of grape juice causes an increase in the marginal revenue product of labor used to produce grape juice. t f
true
An increase in the supply of capital, which is a substitute to labor, will lead to a decrease in the demand for labor. t f
true
An increase in wages raises the opportunity cost of leisure and leads to an increase in the quantity of labor supplied. t f
true
Increases in population shift the market supply curve for labor to the right. t f
true
If a worker can produce 20 units of output which can be sold for $4 per unit, what is the maximum wage that firm should pay to hire this worker?
$80
A reason why a perfectly competitive firm's demand for labor curve slopes downward is that... in the short run, as more labor is hired, labor's marginal product falls because of the law of diminishing returns. the firm's demand curve for the product that uses labor is downward sloping. the extra cost of hiring additional units of labor increases as a firm hires more units of labor. each additional unit of labor hired is less efficient than previously hired units.
A
An increase in a perfectly competitive firm's demand for labor could be caused by... an increase in the market demand for the firm's product. a decrease in the market wage rate. a decrease in the marginal product of workers. an increase in the quantity of labor supplied.
A
An increase in the supply of capital, which is a complement to labor, will lead to... an increase in the demand for labor. a decrease in the quantity of labor demanded. a decrease in the demand for labor. an increase in the quantity of labor demanded.
A
At low wages, the labor supply curve for most people slopes upward because... as wages increase the opportunity cost of leisure increases. the supply of labor is perfectly inelastic at low wages. the demand for labor is perfectly elastic at low wages. as wages increase income also increases unless hours worked decrease.
A
Compensating differentials are... higher wages that compensate workers for unpleasant aspects of a job. higher wages that compensate the more experienced workers in a field. wages paid to workers where the supply of labor is great relative to demand. non-monetary benefits from being employed, such as health-care benefits.
A
Consider the market for opticians. What is likely to happen to the equilibrium wage and quantity of opticians if more and more people turn to laser eye surgery instead of wearing glasses or contact lens? The equilibrium wage and the equilibrium quantity of opticians fall. The equilibrium wage rises and the equilibrium quantity of opticians falls. The equilibrium wage and the equilibrium quantity of opticians rise. The equilibrium wage falls and the equilibrium quantity of opticians rises.
A
If Alan Shaw reduces his work hours when his salary increases, then... the income effect of his salary increase dominates the substitution effect. the substitution effect of his salary increase dominates the income effect. the income effect of his salary increase is completely offset by the substitution effect. leisure is an inferior good to Alan.
A
Other things remaining the same, which of the following is likely to happen if there is a decrease in the price of flour products? There will be a decrease in both the wage rate and the employment levels in the flour industry. There will be a decrease in the wage rate and an increase in the employment levels in the flour industry. There will be an increase in both the wage rate and the employment levels in the flour industry. There will be an increase in the wage rate and a decrease in the employment levels in the flour industry.
A
Sarah is a high school graduate and James is a college graduate. Which of the following statements is true? James is likely to have more human capital than Sara. Both Sara and James are likely to earn the same wage in the labor market. Sara is likely to have more human capital than James. Both Sara and James are likely to have the same amount of human capital.
A
Some superstar athletes in the sports industry earn very high levels of income relative to other occupations, and over time the wage differential has been increasing. What could have caused this? Technological advances such as cable television has increased the demand for sports entertainment. The market power of athletes' unions has increased. The supply of star athletes has increased due to college athletic programs. The supply of star athletes has decrease
A
The firm's gain in profit from hiring another worker is... the difference between marginal revenue product and the wage of the worker. the reduction in costs from hiring another worker. the marginal revenue product of the extra worker. the extra output of the extra worker.
A
Marginal revenue product of labor for a competitive seller is... the marginal revenue of the product multiplied by the output price. equal to the marginal product of labor multiplied by the output price. the change in total product from hiring one more worker. the output price multiplied by the quantity sold.
B
What is the difference between labor's marginal product and marginal revenue product? The marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firm's total sales revenue. Labor's marginal product is a measure of labor's productivity while labor's marginal revenue product is a measure of labor's ability to sell the firm's products. The marginal revenue product of labor is the dollar value of hiring an additional worker while the marginal product of labor is the increase in the firm's physical output as a result of hiring an additional worker. The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker.
A
Which of the following factors will not cause the labor demand curve to shift? the wage rate changes in technology increases in human capital a change in the price of the product produced with labor
A
Other things remaining the same, which of the following is likely to cause a decrease in both the wage rate and the number of workers hired in a glass factory? A decrease in the population in the region where the factory is located The introduction of labor-saving technology in the factory An increase in the population in the region where the factory is located The introduction of labor-complementary technology in the factory
B
Other things remaining the same, which of the following is likely to cause a left shift in the supply curve for labor? An increase in population A decrease in population An increase in the demand for the final product that the labor is used to produce A decrease in the demand for the final product that the labor is used to produce
B
A firm's primary interest when it hires an additional worker is... the cost of hiring the additional worker. the extra revenue the firm realizes from hiring that worker. how the average output of the firm will be affected by this new worker. whether or not the new worker gets along with the firm's existing workers.
B
In the legal sector, some practice areas have declined in recent years. For example, personal-injury and medical-malpractice cases have been undercut by state laws limiting class-action suits, out-of-state plaintiffs, and payouts on damages, and securities class-action litigation has declined in part because of a buoyant stock market. How does this affect the market for lawyers? The supply of lawyers shifts to the left. The demand for lawyers shifts to the left. The quantity of lawyers demanded decreases and this is represented by a movement along the demand curve. Both the demand and supply curves decrease.
B
The difference between the salaries paid to movie stars and to actors who play supporting roles is much greater today than it was in the 1930s and 1940s. What factor explains this increase in relative salaries over time? Agents of movies stars are effective in obtaining large salaries for their clients today. Few movie stars had agents to negotiate for them in the 1930s and 1940s. Technological advances in the entertainment industry increase the revenue that successful movies can earn. This has increased the movie studios' willingness to pay high salaries to movie stars. The studio system that dominated the industry in the 1930s and 1940s no longer exists. The studio system allowed movie studios to sign actors to long-term contracts that kept salaries down. There was no actors' union in the 1930s and 1940s. The rise of strong actors' unions has caused salaries of movies stars to be greater today than in previous years.
B
The typical labor supply curve is upward sloping but it is possible for the curve to be backward bending — negatively sloped — at very high wage levels. Which of the following would cause a backward-bending supply curve? This would occur when the substitution effect from an increase in the wage becomes larger than the income effect. This would occur when the income effect from an increase in the wage becomes larger than the substitution effect. This would occur if leisure is an inferior good. This would occur when a large number of workers choose leisure rather than employment at low wages; only a very large increase in the wage will lead these workers to prefer employment to leisure.
B
Which of the following statements is true? Employers are willing to forego profits when engaging in special interest group discrimination. Employers are willing to forego profits when engaging in taste-based discrimination. Employers are willing to forego profits when engaging in statistical discrimination. Employers are willing to forego profits when engaging in cultural discrimination.
B
A decrease in the wage rate causes... a leftward shift of the firm's labor demand curve. a decrease in labor's productivity. an increase in the quantity of labor demanded. a rightward shift of the firm's labor demand curve.
C
A firm's demand for labor curve is also called its... marginal benefit of labor curve. marginal valuation curve. marginal revenue product of labor curve. marginal factor cost of labor curve.
C
Customer discrimination occurs when... workers refuse to serve customers of a different race. a firm pays workers different wages based on irrelevant factors. customers refuse to buy products produced by a racially diverse workforce. customers refuse to buy products they believe to be of poor quality.
C
If Molly Bee increases her work hours when her wage increases, then... the income effect of the wage increase outweighs the substitution effect. leisure is an inferior good to Molly. the substitution effect of the wage increase outweighs the income effect. Molly is spending beyond her means.
C
Suppose the government grants child care subsidies to mothers entering the labor force. What is likely to happen to the equilibrium wage and quantity of labor? The equilibrium wage and the equilibrium quantity of labor rise. The equilibrium wage rises and the equilibrium quantity of labor falls. The equilibrium wage falls and the equilibrium quantity of labor rises. The equilibrium wage and the equilibrium quantity of labor fall.
C
The total value to society of having garbage removed is greater than the value of baseball games. Why, then, are baseball players paid more than garbage collectors? Although the total value of garbage removal is greater than the total value of baseball, wages are determined by average values. There is greater competition in the garbage collection industry than there is in Major League Baseball. Wages do not depend on total values but marginal values. The marginal revenue product of baseball players exceeds the marginal revenue product of garbage collectors. Garbage removal results in significant external benefits that are not captured in the price paid for garbage removal. As a result, wages of garbage collectors do not reflect their social benefits.
C
When expectations cause people to discriminate against a certain group, it is referred to as: implicit discrimination. preferential bias. statistical discrimination. taste-based discrimination.
C
Which of the following correctly identifies a difference between taste-based discrimination and statistical discrimination? Employers engaging in statistical discrimination are willing to forego profit, whereas employers engaging in taste-based discrimination are trying to enhance profits. Taste-based discrimination is observed in the service sector, whereas statistical discrimination is observed in the manufacturing sector. Employers engaging in taste-based discrimination are willing to forego profits, whereas employers engaging in statistical discrimination are trying to enhance profits. Taste-based discrimination is observed in the manufacturing sector, whereas statistical discrimination is observed in the service sector.
C
Which of the following explains why talented major league baseball players command much higher salaries than neurosurgeons? because it takes far more skill and training to be a major league baseball player than to be a neurosurgeon because the total value of baseball games is much higher than the total value of neurosurgery because the supply of talented major league baseball players is low relative to its demand compared to the supply of neurosurgeons. Therefore, adding another player yields far greater marginal benefit than adding another neurosurgeon. because the supply of talented major league baseball players is relatively low compared to the supply of neurosurgeons. Therefore, major league baseball players exert far more market power than neurosurgeons
C
Which of the following is a likely reason for wage inequality between men and women? Men generally tend to have higher education qualifications than women. Men tend to spend more time out of the labor force as compared to women. Women tend to spend more time out of the labor force as compared to men. Women generally tend to have higher educational qualifications than men.
C
Which of the following is likely to lead to a left shift in the supply curve for labor to a firm? The introduction of labor-complementary technology The introduction of labor-saving technology The establishment of a new firm nearby that offers higher wages An increase in the opportunity cost of leisure
C
Which of the following statements is true? The slope of the labor supply curve depends only on the income effect of a wage rate change. The slope of the labor supply curve depends only on the substitution effect of a wage rate change. The income effect and the substitution effect of a wage rate change work in opposite directions. The income effect and the substitution effect of a wage rate change work in the same direction.
C
Worker discrimination occurs when... workers refuse to perform risky tasks. customers refuse to buy products produced by a racially diverse workforce. workers refuse to work with persons of a different race. employers pay different employees different wages based on race.
C
Women typically earn less than men, even in the same occupation. Which of the following is an explanation for this discrepancy? Women are, on average, less motivated than men and therefore tend to avoid taking on more responsibilities. Women tend to take riskier jobs and earn compensating wage differentials. Women do not work as hard as men because of cultural influences. Women have, on average, less workforce experience than men of the same age.
D
An individual's labor supply curve shows... the relationship between the quantity of hours worked and total income earned by that individual. the maximum wage rates offered to that individual by various potential employers. the relationship between wages and the quantity of labor that a firm is willing to employ. the relationship between wages and the quantity of labor that she is willing to supply.
D
As more output is produced, the marginal product of labor declines... if the firm's output supply curve is inelastic. because the firm's marginal revenue declines. if firms reduce the wage paid to labor. because of the law of diminishing returns.
D
Compensating differentials are associated most closely with which of the following? differences in education comparable worth economic discrimination hazardous jobs
D
Firms use information on labor's marginal revenue product to determine... how much marginal product to produce at each wage rate. how much labor services to supply at each wage rate. how much to produce at each output price. how many workers to hire at each wage rate.
D
One reason why the average salary of Major League Baseball players is higher than the average salary of college professors is... the careers of most baseball players are much shorter than the careers of most college professors. college professors accept lower salaries in exchange for better working conditions. competition among baseball club owners forces player salaries to be much higher than the players' marginal revenue products. the marginal revenue product of baseball players is greater than the marginal revenue product of college professors.
D
Painters who paint water towers earn higher wages relative to painters who paint houses because... the demand for tower painters is greater than the demand for residential painters. the tower painters' union is probably more powerful than the house painters' union. the supply of water tower painters exceeds the supply of house painters. painting water towers is more risky than painting houses.
D
The demand for labor depends primarily on the additional output produced as a result of hiring an additional worker and... the number of workers willing to produce the additional output. the payment made to the worker for producing the additional output. the elasticity of demand for the output produced by the worker. the additional revenue received from selling the output produced as a result of hiring an additional worker.
D
The dollar value of the marginal product of labor is the: amount of output produced by the first unit of labor hired by a firm. extra output that is produced by hiring an additional unit of labor. value of the output produced by all the workers in a firm. contribution of an additional unit of labor to a firm's revenue.
D
The labor supply for an industry would decrease if... the wage rate falls. the government welcomes foreign workers into the country. a greater percentage of women want to work outside the home. the percentage of the population from age 16 to 65 decreases.
D
The term "derived demand" refers to... a demand curve that derives from the availability of resources. the demand for financial products called derivatives. a firm's estimated demand curve derived from sales data. the demand for a factor of production that is derived from the demand for the good the factor produces.
D
Which of the following is a reason why it is difficult to estimate the extent of economic discrimination in the labor market? Employers who discriminate are likely to do so in overt ways such as awarding some workers with benefits-in-kind. Employers who discriminate pay an economic penalty. Ultimately, employers who discriminate cannot remain profitable. Differences in wages can be attributed to many other factors as well, such as differences in productivity and preferences.
D
Which of the following is likely to cause a decrease in the wage rate and an increase in the employment level of a country? A left shift in the demand curve for labor, without any change in the supply curve for labor A left shift in the supply curve for labor, without any change in the demand curve for labor A right shift in the demand curve for labor, without any change in the supply curve for labor A right shift in the supply curve for labor, without any change in the demand curve for labor
D
Larry and Mike are equally skilled construction workers employed by the Brown and Root Company. Larry's job is riskier because he typically works on a scaffold 1,000 feet above ground. Larry's higher wage rate is the result of a...
compensating differential
In situations where new technologies are considered substitutes for workers, demand for these workers will ________, resulting in ________ in the equilibrium wage.
decreases, decrease
If the demand for labor is unchanged, population growth will increase the supply of labor and increase the equilibrium wage. t f
false
The substitution effect of a wage decrease examines the effect of the decrease in wage income on a worker's ability to consume goods and services t f
false
In situations where new technologies are considered complementary to workers, demand for these workers will ________, resulting in ________ in the equilibrium wage.
increase, increase
