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Balanced,across the board income growth characterizes the period of the


A) 1980's.
B) entire 20th century.
C) 1960's to 1990's.
D) mid 1940's to the early 1970's.

E) None of the above
F) A) and B)

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Technological advances shift the demand for labor


A) to the left.
B) to the right.
C) to the left if technology is a complement of labor,but to the right if it is a substitute.
D) to the right if technology is a complement of labor,but to the left if it is a substitute.

E) A) and C)
F) All of the above

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Acme Market increased wages for their cashiers from $7/hr to $9/hr.Pat,a cashier at Acme,now works 30hrs/week instead of the 25hrs/week hours Pat used to work before the wage increase.On the other hand Chris,also a cashier at Acme decreased his work time by 5hrs/week after the wage increase and started to spend more time watching TV. Pat's behavior can be best explained as the ________ of high wage rates.


A) demand effect
B) supply effect
C) income effect
D) substitution effect

E) B) and D)
F) None of the above

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The chart below describes the short run productivity of workers at Paper Pushers Inc. ,an office support firm that has no variable costs other than labor.  Workers  Pages per Hour 14027531054125514061507155\begin{array}{|l|l|}\hline \text { Workers } & \text { Pages per Hour } \\\hline 1 & 40 \\\hline 2 & 75 \\\hline 3 & 105 \\\hline 4 & 125 \\\hline 5 & 140 \\\hline 6 & 150 \\\hline 7 & 155 \\\hline\end{array} The VMP of the sixth worker is _____ than the VMP of the fourth worker because


A) less;the firm experiences economies of scale.
B) less;the sixth worker is less skilled than the fourth worker.
C) less;the firm experiences diminishing returns to inputs.
D) more;the workers can specialize and exploit comparative advantages.

E) All of the above
F) A) and B)

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Which of the following is not true of labor unions?


A) They seek to increase members' wages.
B) They seek to increase medical benefits paid to members.
C) They bargain for safer working conditions.
D) They encourage management to take steps to maximize profits.

E) A) and C)
F) A) and B)

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Demographers predict that the average age of the population of the U.S.will increase.One result will be an increase in the demand for nurses.Assume that the graph below describes the current nursing labor market in a mid-sized city,and that the market is a competitive one. Demographers predict that the average age of the population of the U.S.will increase.One result will be an increase in the demand for nurses.Assume that the graph below describes the current nursing labor market in a mid-sized city,and that the market is a competitive one. In the long run,if the nursing market is perfectly competitive,the demographic shift that increases the demand for nurses is likely to A) cause nurses' wages to increase,providing a greater incentive to choose nursing as a career. B) cause the working conditions of nurses to worsen,providing a disincentive to choose nursing as a career. C) cause a persistent shortage of nurses because the market undervalues nurses. D) shift back to the original demand as needs are unmet. In the long run,if the nursing market is perfectly competitive,the demographic shift that increases the demand for nurses is likely to


A) cause nurses' wages to increase,providing a greater incentive to choose nursing as a career.
B) cause the working conditions of nurses to worsen,providing a disincentive to choose nursing as a career.
C) cause a persistent shortage of nurses because the market undervalues nurses.
D) shift back to the original demand as needs are unmet.

E) C) and D)
F) B) and D)

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The value of marginal product for the last worker hired is $20 and the wage rate is $25.The firm


A) should reduce its labor usage.
B) should increase its labor usage.
C) should keep the last worker it hired.
D) is cost minimizing.

E) A) and B)
F) A) and C)

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Matt is offered a job driving the campus shuttle bus from 4 P.M.to 6 P.M.each Monday.His reservation wage for this job is $7/hour. Suppose the campus transportation director offers Matt $50/hour,and Matt doesn't have to share his income with anyone else.Will Matt accept this job?


A) Yes,accepting the job means a positive surplus for Matt.
B) No,accepting the job means a negative surplus for Matt.
C) Yes,although accepting the job means a negative surplus for Matt,still it's better than having no job.
D) No,although accepting the job means a positive surplus for Matt,still it's not the best option for him.

E) None of the above
F) B) and D)

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There are two separate labor markets in Toontown,illustrated by the graphs below.Both labor markets currently pay $6.00 per hour,and both require the same skills and qualifications.The Toontown City Council is considering enacting a $7.50 living wage ordinance,which would require all Toontown employers to pay wages of at least $7.50 per hour. There are two separate labor markets in Toontown,illustrated by the graphs below.Both labor markets currently pay $6.00 per hour,and both require the same skills and qualifications.The Toontown City Council is considering enacting a $7.50 living wage ordinance,which would require all Toontown employers to pay wages of at least $7.50 per hour. At the current wage of $6.00,employer surplus in Market A is ___ and in Market B is ___. A) 36;36 B) 9;9 C) 18;18 D) 36;9 At the current wage of $6.00,employer surplus in Market A is ___ and in Market B is ___.


A) 36;36
B) 9;9
C) 18;18
D) 36;9

E) None of the above
F) A) and B)

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Imposing a minimum wage in the labor market


A) makes all workers better off.
B) lowers labor costs.
C) increases the size of the total wage bill.
D) makes some workers worse off.

E) B) and D)
F) None of the above

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Assume that this graph illustrates a perfectly competitive labor market. Assume that this graph illustrates a perfectly competitive labor market. Equilibrium in this labor market is at a wage of _______ and employment of approximately __________ worker hours. A) $30;100 B) $30;150 C) $20;175 D) $20;100 Equilibrium in this labor market is at a wage of _______ and employment of approximately __________ worker hours.


A) $30;100
B) $30;150
C) $20;175
D) $20;100

E) B) and C)
F) A) and B)

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Assume that this graph illustrates a perfectly competitive labor market. Assume that this graph illustrates a perfectly competitive labor market. If the supply of worker hours in this market shifted to the right A) the equilibrium wage would fall and the number of worker hours would increase. B) the equilibrium wage and the number of worker hours would increase. C) the equilibrium wage would stay the same,but the number of worker hours would increase. D) the equilibrium wage would fall and the number of worker hours would decrease. If the supply of worker hours in this market shifted to the right


A) the equilibrium wage would fall and the number of worker hours would increase.
B) the equilibrium wage and the number of worker hours would increase.
C) the equilibrium wage would stay the same,but the number of worker hours would increase.
D) the equilibrium wage would fall and the number of worker hours would decrease.

E) All of the above
F) A) and C)

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In a competitive labor market,the equilibrium wage rate is determined by


A) government regulation.
B) employers.
C) the intersection of labor demand and labor supply.
D) employees.

E) None of the above
F) B) and C)

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


A) labor monopsony.
B) labor union.
C) labor collective.
D) closed shop.

E) B) and D)
F) All of the above

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The relationship between labor usage and output at the local coffee shop is summarized in the table below.The price of a cup of espresso is $1.25 and no other inputs are required.  Labor  Input ‾ Cups of  espresso ‾0 0 125245360470575\begin{array}{cc}\begin{array}{c}\text { Labor } \\ \underline {\text { Input }}\end{array} & \begin{array}{c}\text { Cups of } \\ \underline {\text { espresso }}\end{array} \\ 0 & \text { 0 } \\1 & 25 \\2 & 45 \\3 & 60 \\4 & 70 \\5 & 75\end{array} The marginal product of the third worker is __________ than the marginal product of the second worker which means __________.


A) greater;diminishing returns are absent
B) less;diminishing returns are present
C) neither greater nor less;the third worker will be hired
D) less;the third worker will never be hired

E) C) and D)
F) All of the above

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A decrease in demand for a firm's output results in a(n)


A) increase in labor supply.
B) decrease in labor demand.
C) decrease in labor supply.
D) increase in labor demand.

E) A) and C)
F) C) and D)

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Curly just graduated from State U and has three job offers: teaching at a prestigious private high school nine months a year with summers off,working forty hours a week at a bank in a small city,and working more than sixty hours a week for a high-powered investment firm on Wall Street (in New York City) . The annual salary for each of these offers is probably:


A) lowest for the Wall Street job,middling for the bank job,and highest at the high school.
B) lowest for the bank job,middling on Wall Street,and highest at the high school.
C) lowest at the high school,middling on Wall Street,and highest for the bank job.
D) lowest at the high school,middling for the bank job,and highest on Wall Street.

E) B) and D)
F) B) and C)

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Pat works for a landscape contractor,generating gross revenues of $50 per hour.Non-labor variable costs total $10 per hour.Pat loves to garden,and would be willing to work for $15 per hour.Assume that the labor market is perfectly competitive. For each hour that Pat works,the landscape company's net benefits are


A) equal to Pat's reservation price.
B) $50 minus Pat's wage.
C) $40 minus Pat's wage.
D) zero,because non-labor variable costs and Pat's wage completely consume revenues.

E) B) and C)
F) None of the above

Correct Answer

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Means-tested welfare benefits provide an incentive to


A) leave welfare.
B) earn unreported or illegal income.
C) work.
D) accurately disclose earnings.

E) None of the above
F) A) and B)

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According to the textbook,the best possible solution to the problem of poverty would seem to be


A) a combination of a negative income tax and public employment.
B) maintaining the current system.
C) a negative income tax with the tax credit equal to the poverty threshold.
D) complete elimination of all efforts to assist the poor.

E) All of the above
F) B) and C)

Correct Answer

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Showing 41 - 60 of 145

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