Question 1

The effect of unions tends to ____ output in the union sector and ____ output in the non-union sector.

Accepted Answer

A)   increase; increase.
B)   increase; decrease.
C)   decrease; increase.
D)   decrease; decrease.E) A) and B)
F) All of the above

Question 2

Discuss the factors behind the recent decline in labor union membership.

Accepted Answer

Several possible reasons explain the rec...

Question 3

Which of the following is true regarding labor legislation?

Accepted Answer

A)   The Taft-Hartley Act increased union power while the Wagner Act limited union power.
B)   The Wagner Act increased union power while the Taft-Hartley Act limited union power.
C)   Both the Wagner Act and the Taft-Hartley Act increased the power of unions.
D)   Both the Wagner Act and the Taft-Hartley Act limited the power of unions.E) None of the above
F) B) and C)

Question 4

For an individual's supply curve of labor to be backward bending:

Accepted Answer

A)   the substitution effect must be greater than the income effect.
B)   the substitution effect must be equal to the income effect.
C)   the substitution effect must be less than the income effect.
D)   is an impossibility.E) A) and B)
F) C) and D)

Question 5

An individual firm in a perfectly competitive labor market faces:

Accepted Answer

A)   a downward sloping labor demand curve and an upward sloping labor supply curve.
B)   a horizontal labor supply curve and a vertical labor demand curve.
C)   a horizontal labor supply curve and a downward sloping labor demand curve.
D)   an upward sloping labor supply curve and a horizontal labor demand curve.E) A) and C)
F) B) and C)

Question 6

Which of the following best illustrates the concept of "derived demand"?

Accepted Answer

A)   An increase in the wages of autoworkers leads to an increase in the demand for robots in automobile factories.
B)   An auto firm decides to supply more minivans when there is a decrease in the demand for station wagons.
C)   An increase in the price of gasoline leads to an increase in the demand for small cars.
D)   An automobile firm faces an increase in the demand for cars it supplies to the market, which leads to an increase in the demand for autoworkers.E) A) and B)
F) A) and C)

Question 7

The contribution of an additional worker to a firm's ____,is the worker's contribution to revenue minus the worker's ____.

Accepted Answer

A)   profits; wage
B)   output; wage
C)   profits; marginal productivity
D)   output; marginal productivityE) A) and C)
F) C) and D)

Question 8

Changes in the rental price of land is largely determined by:

Accepted Answer

A)   changes in the supply of land.
B)   changes in the demand for land.
C)   changes in the elasticity of supply of land.
D)   the creation of new landfills.E) B) and C)
F) A) and D)

Question 9

Featherbedding refers to the practice of:

Accepted Answer

A)   disallowing members from joining labor unions.
B)   hiring lesser number of laborers than what is required.
C)   terminating employment without notice.
D)   hiring more laborers than what is necessary.E) A) and C)
F) None of the above

Question 10

A change in technology that increases the marginal physical product of an input will:

Accepted Answer

A)   shift the input demand curve to the left.
B)   shift the input demand curve to the right.
C)   result in a movement down along the input demand curve.
D)   result in a movement up along the input demand curve.E) A) and B)
F) A) and C)

Question 11

A productivity slowdown could result from

Accepted Answer

A)   an increase in capital formation.
B)   an increase in the number of unskilled and inexperienced workers.
C)   a decrease in the relative size of the service sector.
D)   any of the above.E) B) and C)
F) A) and D)

Question 12

Mr.Calhoun owned land on which cotton could be grown,but which he had been unable to rent for years.Suddenly he was getting offers from cotton farmers to lease his land.Which of the following best explains this change in circumstances?

Accepted Answer

A)   The price of cotton decreased.
B)   The price of cotton increased.
C)   The productivity of the land increased.
D)   Property taxes on the land increased.E) None of the above
F) C) and D)

Question 13

If labor demand rises faster than labor supply,it is expected that real wages will ____.

Accepted Answer

A)   stay the same
B)   decrease
C)   increase
D)   Not enough information is available to determine the impact on real wage rates.E) A) and B)
F) A) and C)

Question 14

The demand for labor is a derived demand.Employers hire workers until the:

Accepted Answer

A)   wage rate equals the average product of labor.
B)   wage rate equals the marginal revenue product of labor.
C)   average product of labor is zero.
D)   marginal product of labor is zero.E) A) and D)
F) All of the above

Question 15

The supply curve for land is perfectly elastic.

Accepted Answer

A) True 
 B)False

Question 16

If unions are successful at increasing union wages,it will

Accepted Answer

A)   increase wages and employment in the union sector.
B)   increase wages and decrease employment in the union sector.
C)   increase wages and employment in the non-union sector.
D)   increase wages and decrease employment in the non-union sector.E) A) and D)
F) B) and D)

Question 17

A decrease in the interest rate will:

Accepted Answer

A)   increase the amount of money borrowed by firms.
B)   decrease the amount of money borrowed by firms.
C)   have an ambiguous effect on the amount of money borrowed by firms.
D)   have no effect on the amount of money borrowed by firms.E) None of the above
F) A) and B)

Question 18

The additional revenue a firm obtains from hiring one more unit of input is called the marginal revenue product.

Accepted Answer

A) True 
 B)False

Question 19

Lower wages will

Accepted Answer

A)   decrease the demand for labor.
B)   decrease the quantity of labor demanded.
C)   increase the demand for labor.
D)   increase the quantity of labor demanded.E) A) and B)
F) A) and C)

Question 20

Collective bargaining refers to negotiations between:

Accepted Answer

A)   representatives of employers and unions.
B)   unions and government regulators.
C)   consumers and producers.
D)   employers and consumers.E) None of the above
F) A) and B)

Exam 16: The Markets for Labor, Capital, and Land

Discuss the factors behind the recent decline in labor union membership.

Correct AnswerverifiedSeveral possible reasons explain the rec...View AnswerShow Answer

For an individual's supply curve of labor to be backward bending:

Correct AnswerverifiedShow Answer

Which of the following best illustrates the concept of "derived demand"?

Correct AnswerverifiedShow Answer

Changes in the rental price of land is largely determined by:

Correct AnswerverifiedShow Answer

A change in technology that increases the marginal physical product of an input will:

Correct AnswerverifiedShow Answer

The demand for labor is a derived demand.Employers hire workers until the:

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An individual firm in a perfectly competitive labor market faces:

Correct AnswerverifiedShow Answer

Collective bargaining refers to negotiations between:

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A productivity slowdown could result from

Correct AnswerverifiedShow Answer

The contribution of an additional worker to a firm's ____,is the worker's contribution to revenue minus the worker's ____.

Correct AnswerverifiedShow Answer

If labor demand rises faster than labor supply,it is expected that real wages will ____.

Correct AnswerverifiedShow Answer

A decrease in the interest rate will:

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The effect of unions tends to ____ output in the union sector and ____ output in the non-union sector.

Correct AnswerverifiedShow Answer

The additional revenue a firm obtains from hiring one more unit of input is called the marginal revenue product.

Correct AnswerverifiedShow Answer

Which of the following is true regarding labor legislation?

Correct AnswerverifiedShow Answer

If unions are successful at increasing union wages,it will

Correct AnswerverifiedShow Answer

Featherbedding refers to the practice of:

Correct AnswerverifiedShow Answer

Lower wages will

Correct AnswerverifiedShow Answer

The supply curve for land is perfectly elastic.

Correct AnswerverifiedShow Answer

Mr.Calhoun owned land on which cotton could be grown,but which he had been unable to rent for years.Suddenly he was getting offers from cotton farmers to lease his land.Which of the following best explains this change in circumstances?

Correct AnswerverifiedShow Answer

Correct Answer
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Several possible reasons explain the rec...
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The contribution of an additional worker to a firm's ,is the worker's contribution to revenue minus the worker's .

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The effect of unions tends to output in the union sector and output in the non-union sector.

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