Econ Ch 14 Quiz

The most important factor contributing to wage differences in the labor market is differences in the level of education and training among workers.

True

The marginal product of labor is

the additional output a firm produces as a result of hiring one more worker.

A firm is unlikely to hire a worker if:

the additional revenue generated by hiring the worker is less than his or her wage. (A firm will not hire a worker if the revenue generated by hiring the worker is less than the cost of hiring the worker.)

The firm's gain in profit from hiring another worker is

the difference between marginal revenue product and the wage of the worker.

Assume that this graph illustrates a perfectly competitive labor market. Equilibrium in this labor market is at a wage of ______ per hour and an employment level of ______ person-hours per day.

$30; 150 (The labor demand and labor supply curves intersect at a wage of $30 and an employment level of 150 person-hours per day.)

In recent years, most immigrants to the United States have come from Latin America and Asia.

True

An organization of employees that has the legal right to bargain with employers about wages and working conditions is called a

Labor union

In competitive labor markets, _____ demand labor and ______ supply labor.

firms, workers (Firms demand labor supplied by workers.)

In competitive labor markets, ________ demand labor and ________ supply labor.

firms; workers (Firms demand labor supplied by workers.)

The demand for labor is described as a derived demand because

it is derived from the demand for products that use labor in the production process.

A group of workers who bargain collectively with employers for higher wages and better working conditions is called a:

labor union. (A labor union is a group of workers who bargain collectively with employers for better wages and working conditions.)

Imposing a minimum wage above the equilibrium wage:

makes some workers worse off. (Imposing a minimum wage above the equilibrium wage will lower employment, making some workers worse off.)

The additional output a firm gets from hiring an additional unit of labor is the

marginal product of labor (The marginal product labor is defined as the additional a firm gets by employing one additional unit of labor.)

Assume that this graph illustrates a perfectly competitive labor market. Suppose a minimum wage law required the wage to be at least $20 per hour in this market. If that happened, then:

there would be no change the equilibrium number of person-hours. (Nothing would be different because the equilibrium wage is above $20.)