Question 1

A bilateral monopoly is a market in which there are:

Accepted Answer

A)   many sellers but only a single buyer.
B)   many buyers but only a single seller.
C)   only a single seller and a single buyer.
D)   many sellers and many buyers.E) B) and D)
F) All of the above

Question 2

A monopolist will hire workers up to the point at which the wage equals the marginal:

Accepted Answer

A)   physical product of labor.
B)   physical product of labor times the price of output.
C)   physical product of labor times marginal revenue.
D)   cost of labor.E) All of the above
F) None of the above

Question 3

A single union that supplies all the labor in a particular market is an example of:

Accepted Answer

A)   a monopsony.
B)   a monopoly.
C)   a bilateral monopoly.
D)   an oligopoly.E) C) and D)
F) B) and C)

Question 4

Among jobs that you like, you would be wise to choose a job in a field in which:

Accepted Answer

A)   labor demand and labor supply are both increasing.
B)   labor supply and labor demand are both decreasing.
C)   labor supply is decreasing while labor demand is increasing.
D)   labor supply is increasing while labor demand is decreasing.E) A) and D)
F) C) and D)

Question 5

When wages rise:

Accepted Answer

A)   the quantity of labor supplied always declines.
B)   neither the opportunity cost of an hour of leisure nor the quantity of labor supplied is likely to change.
C)   the opportunity cost of an hour of leisure declines.
D)   the opportunity cost of an hour of leisure increases.E) A) and D)
F) B) and D)

Question 6

Efficiency wages are above-market wages that are paid to workers to keep them productive.

Accepted Answer

A) True 
 B)False

Question 7

The supply of labor generally is considered to be downward-sloping because the opportunity cost of leisure decreases as wages increase.

Accepted Answer

A) True 
 B)False

Question 8

Efficiency wages tend to:

Accepted Answer

A)   increase costs in the short run but reduce them in the long run.
B)   raise costs in both the long run and the short run.
C)   reduce costs in both the long run and the short run.
D)   reduce costs in the short run but increase them in the long run.E) B) and D)
F) A) and D)

Question 9

Which of the following is most likely to reduce the supply of labor?

Accepted Answer

A)   An increase in population
B)   An increase in the value placed on leisure by workers
C)   A decrease in the value placed on leisure by workers
D)   A decrease in labor productivityE) All of the above
F) None of the above

Question 10

How wages are determined is best described by:

Accepted Answer

A)   economic factors only.
B)   political and social forces only.
C)   economic factors, with strong influences by political and social forces.
D)   government regulation only.E) All of the above
F) None of the above

Question 11

The labor demand curve:

Accepted Answer

A)   shifts out when wages fall.
B)   shifts in when wages rise.
C)   slopes up because of the law of demand.
D)   slopes down because of the law of demand.E) All of the above
F) A) and B)

Question 12

The marginal factor cost curve for a monopsony:

Accepted Answer

A)   lies above the labor supply curve.
B)   lies below the labor supply curve.
C)   is the labor supply curve.
D)   is unrelated to the labor supply curve.E) A) and D)
F) None of the above

Question 13

If there are a number of inexpensive substitutes for labor in the production process, labor:

Accepted Answer

A)   demand will most likely be elastic.
B)   demand will most likely be inelastic.
C)   supply will most likely be elastic.
D)   supply will most likely be inelastic.E) A) and B)
F) C) and D)

Question 14

If the demand for widgets decreases, this will:

Accepted Answer

A)   increase the supply of inputs used to produce widgets.
B)   decrease the supply of inputs used to produce widgets.
C)   increase the demand for inputs used to produce widgets.
D)   decrease the demand for inputs used to produce widgets.E) B) and C)
F) A) and D)

Question 15

Discrimination based on institutional factors occurs when:

Accepted Answer

A)   employers pay women less than men for doing the same job.
B)   women remain in low-paying jobs because of family responsibilities.
C)   employers hire a man who is more qualified than a woman.
D)   women postpone having children in order to succeed professionally.E) B) and C)
F) All of the above

Question 16

A reduction in the demand for labor will cause wages to:

Accepted Answer

A)   decrease and employment to increase.
B)   decrease and employment to decrease.
C)   increase and employment to decrease.
D)   increase and employment to increase.E) A) and D)
F) B) and C)

Question 17

The elasticity of labor supply:

Accepted Answer

A)   should be greater for a state than for a town because people can travel more easily between states than between towns.
B)   should be greater for a town than for a state because people are more likely to consider work in a neighboring town than in another state.
C)   for a town should equal the elasticity of labor supply for a state.
D)   for a town is not related to the elasticity of labor supply for a state.E) A) and B)
F) None of the above

Question 18

If robotics and factory automation become more widespread in an industry and all else is held constant:

Accepted Answer

A)   both the demand for labor in that industry and the wage rate should increase.
B)   both the demand for labor in that industry and the wage rate should decrease.
C)   the demand for labor should decrease in that industry and the wage rate should increase.
D)   the demand for labor should increase in that industry and the wage rate should decrease.E) None of the above
F) A) and B)

Question 19

Existing employees prefer:

Accepted Answer

A)   inelastic supplies of labor.
B)   elastic supplies of labor.
C)   unit-elastic supplies of labor.
D)   negative elastic supplies of labor.E) C) and D)
F) B) and C)

Question 20

Discrimination based on individual characteristics that don't affect job performance:

Accepted Answer

A)   is the hardest kind of discrimination to eliminate.
B)   is costly to a firm, and so market forces will work toward eliminating it.
C)   is not costly to a firm and thus is easy to eliminate.
D)   may be profit-maximizing in some cases.E) A) and B)
F) A) and C)

Exam 17: Work and the Labor Market

The labor demand curve:

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The supply of labor generally is considered to be downward-sloping because the opportunity cost of leisure decreases as wages increase.

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The marginal factor cost curve for a monopsony:

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The elasticity of labor supply:

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A single union that supplies all the labor in a particular market is an example of:

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When wages rise:

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How wages are determined is best described by:

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Among jobs that you like, you would be wise to choose a job in a field in which:

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A monopolist will hire workers up to the point at which the wage equals the marginal:

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Existing employees prefer:

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Efficiency wages tend to:

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If the demand for widgets decreases, this will:

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If there are a number of inexpensive substitutes for labor in the production process, labor:

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Efficiency wages are above-market wages that are paid to workers to keep them productive.

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A bilateral monopoly is a market in which there are:

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If robotics and factory automation become more widespread in an industry and all else is held constant:

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Discrimination based on individual characteristics that don't affect job performance:

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A reduction in the demand for labor will cause wages to:

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Discrimination based on institutional factors occurs when:

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Which of the following is most likely to reduce the supply of labor?

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