Economics 4

if the labor demand curve shifts to the left, then real wages

decrease; the number of people employed decreases

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

demand; supply

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

The demand for labor will increase if worker productivity

increases

The unemployment that consists of workers who lack marketable skills is and tends to be long-term and chronic is called

structural

In 2016, U.S. real wages were more than _______ (one word) as large as they were in 1960 and more than ____ (one word) times as large as they were in 1929.

twice: five

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

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

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 is/are true

- In recent decades, there has been a pronounced increase in wage inequality in the United States. - Until the economic downturn that began in 2008, total employment in the United States had been increasing substantially for several decades.

Select the five recent trends of the labor market

- Increased U.S. wage inequality - The real wage growth rate has slowed - Substantial growth in the real wages in industrialized countries - Western Europe has experienced higher unemployment than the U.S. - The rate of job growth has slowed.

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

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

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

Consider the table below, if apple pies sell for $8, and the real wage is $35, then how many workers will this firm hire?

2

Consider the table below, if apple pies sell for $10, and the real wage is $35, then how many workers will this firm hire?

3

Consider the table below, if apple pies sell for $5, and the real wage is $16, then how many workers will this firm hire?

3

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

4

Consider the table below, if apple pies sell for $10, then the value of marginal product of the 3rd worker is

40

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

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

50

· Consider the table below, if apple pies sell for $12, then the value of the marginal product of the 2nd worker

60

True or false: 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

Which of the following are accurate statements about international trade?

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

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

Lower wages Lower employment

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

Marginal Price of Labor

_____ will reverse some of the inequality caused by international trade.

Worker mobility between industries

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

additional revenue

the quanitity of the commodity being traded in the labor market is the

amount of labor services

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

Worker mobility between industries will _____ the wage inequality caused by international trade.

decrease some of

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

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

exporting; importing

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

frictional unemployment.

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

the labor supply curve is positively sloped because the higher the real wages the

higher the quantity of labor supplied

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

Skilled-biased technological change increases wage inequality by increasing the wages of _____ workers relative to the wages of _____ 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

According to economic theory, an increase in the minimum wage will lead unemployment to _____.

increase

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

increase

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

increase

Over the last 100 years, technological progress and large increases in the capital stock have led real wages to _____.

increase

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

increase

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

increase

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

increase

Skill-biased technological change will:

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

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

increase; decrease

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

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

large increase in capital technological progress

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

the labor demand curve is negatively sloped because the higher the real wages the

lower the quantity of labor demanded

International trade will lead to _____ in importing industries.

lower wages and lower employment

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 price at which exchange takes place in the labor market is the

real wage rate

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

reservation price

If the real price of workers' output falls, then the labor demand curve will

shift to the left

An increase in immigration will lead the labor supply curve to

shift to the right

If worker productivity increases, the labor demand curve will

shift to the right

Sluggish productivity growth since the 1970s combined with rapid increases in the supply of labor help explain the:

slowdown in real wage growth since the 1970s despite rapid employment growth

The best explanation for the slowdown in real wage growth starting in the early 1970s despite rapid employment growth is _____ productivity growth combined with _____ in the supply of labor.

slower; an increase

what happens in the labor market when employers are optimistic about the economy

the labor demand curve shifts right

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