What is an example of the scale effect?
A. Workers choose to provide more hours of labor when the wage rate decreases.
B. Hiring more labor as long as the marginal product of labor is positive.
C. The firm expands output when production costs fall.
D. The firm expands output when production costs increase.
E. The firm hires more labor when the wage falls because labor has become relatively
cheaper compared to the price of other factors of production.
What is the general relationship between race and unemployment rates in the United
States?
A. Whites have the lowest rate of unemployment; Hispanics have the highest rate of
unemployment.
B. Whites have the lowest rate of unemployment; blacks have the highest rate of
unemployment.
C. Hispanics have the lowest rate of unemployment; whites have the highest rate of
unemployment.
D. Hispanics have the lowest rate of unemployment; blacks have the highest rate of
unemployment.
E. Blacks have the lowest rate of unemployment; Hispanics have the highest rate of
unemployment.
The production function relates
A. factor prices to output prices.
B. wages to labor employed.
C. factors of production to total output.
D. factors of production to profit.
E. the output price to factors of production.
Marissa owns a small lunch shop. The shops kitchen is small, so it can only
accommodate one worker at any one time. The shop is only open from 11:30am –
1:30pm each day. Which of the following options is Marissa the most likely to pursue if
economic pressures lower the competitive wage she pays her worker by 5 percent?
A. Borrow capital to triple the size of her kitchen.
B. Hire a second worker.
C. Extend her business hours.
D. Shut down her shop.
E. Raise her prices.
According to the income effect, an increase in the wage rate will lead the worker to
A. work more hours if leisure is a normal good.
B. work fewer hours if leisure is a normal good.
C. work fewer hours if leisure is an inferior good.
D. work more hours and leisure more hours.
E. not change hours worked.
How does the asking wage depend on the unemployment insurance system in the
United States?
A. The asking wage is constant regardless of the unemployment insurance system.
B. The asking wage will fall as the unemployed worker gets closer to exhausting his or
her UI benefits.
C. The asking wage is lower while receiving UI benefits than it is when not receiving
UI benefits.
D. The asking wage is lower the more likely it is to receive a job offer.
E. The asking wage is lower the more skills the unemployed worker has.
A perfectly discriminating monopsonist pays each worker his or her reservation wage.
This results in
A. the firm receiving zero profit.
B. the firm substituting capital for labor.
C. the firm receiving all of the surplus.
D. the firm avoiding payroll taxes.
E. workers being unwilling to work at the offered wage.
Which of the following does not measure inequality?
A. The 90-10 wage gap.
B. The 50-10 wage gap.
C. The Gini coefficient.
D. The actual Lorenz curve.
E. The perfect-equality Lorenz curve.
What does not enter into the present value calculation of a college degree?
A. The cost of college tuition.
B. The cost of books.
C. Wages of college graduates.
D. Lifetime wages of non-college graduates.
E. The value of ones scholarships.
Right- to-work laws
A. give workers the right to be represented by a union.
B. give workers the right to not join a union.
C. give a non-union worker the right to enjoy union benefits without paying union dues.
D. give firms the right to hire replacement labor when the union strikes.
E. give the firm the right to permanently fire anyone who strikes.
What is an example of specific job training?
A. Learning word-processing skills.
B. Learning how to use the firms payroll system.
C. Obtaining a GED.
D. Becoming stronger.
E. Passing the CPA exam.