If an economics professor moves from the University of California at Berkeley to the
University of Texas at Austin, that is an example of:
a.job change/no change in residence
b.occupational change/no change in residence
c.geographic change/no change in occupation
d.geographic change/change in occupation
Which one of the following union lobbying activities, if successful, would increase the
demand for union labor? Lobbying for legislation that:
a.raises the price of a substitute resource
b.raises the price of a product or service complementary to that produced by the union
c.repeals the Davis-Bacon Act
d.raises the price of a complementary resource
At the profit maximizing level of employment for a monopolist:
a. marginal revenue product equals the value of marginal product
b. marginal revenue product exceeds the value of marginal product
c. value of marginal product equals the marginal wage cost
d. marginal revenue product is less than the value of marginal product
Productivity appears to be:
a.procyclical; firms are reluctant to lay off workers in a recession, so output falls more
than employment
b.procyclical; firms are quick to lay off workers in a recession, so employment falls
more than output
c.countercyclical; firms are reluctant to lay off workers in a recession, so output falls
more than employment
d.countercyclical; firms are quick to lay off workers in a recession, so employment falls
more than output
The hedonic method of valuing a human life:
a. is based on the “price” of accepting risk as revealed in compensating wage
differentials
b. estimates the present value of the amount of wage and fringe benefits that would
have been made had the worker not been killed
c. typically results in a value of between $500,000 and $700,000 per life lost
d. typically yields lower estimates than does the human capital approach
Private loans to finance investments in human capital:
a. are difficult to obtain because the financial return to education has been decreasing
b. are difficult to obtain because a person cannot readily pledge collateral on human
capital
c. are granted by banks just as they are to finance investment in machinery or houses,
without regard to collateral
d. are rarely subsidized by government because they are granted readily by private
banks
For the 1948 ” 2011 period in the U.S., the rate of productivity growth in years of
declining real output was:
a.negative
b.positive
c.faster than in years of expanding real output
d.slower than in years of expanding real output
The prohibition of secondary boycotts:
a.reduced management’s bargaining power by reducing the union’s cost of disagreeing
b.reduced management’s bargaining power by reducing management’s cost of
disagreeing
c.increased management’s bargaining power by increasing the union’s cost of
disagreeing
d.increased management’s bargaining power by increasing management’s cost of
disagreeing
Migration causes the value of output in Country M to: .( Initially, wage rates are WM in
Country M and WU in Country U. Subsequent migration results in an equalization of
wage rates.)
a.fall by area bgc
b.fall by area ebcf
c.fall by area WMbcWe
d.rise by WM ” We
For income and leisure time, a higher level of utility is achieved by moving to the
_____ on an indifference _____.
a. northeast; curve
b. southwest; curve
c. northeast; map
d. southwest; map
Which of the following is not an explanation advanced to explain the increase in
earnings inequality?
a.Deindustrialization
b.Import competition and the decline of unionism
c.Demographic changes
d.A decreased demand for skilled labor
If all workers were to receive the same earnings:
a.the Gini coefficient of earnings would be 1
b.the Gini coefficient of earnings would be 0
c.the earnings distribution would have a normal bell-shaped appearance
d.the Lorenz curve would be skewed to the left
A 10% increase in the wage induces Margy to increase her desired work hours by 2%.
Over this range of wages, Margy’s wage elasticity of labor supply is:
a. elastic
b. unit elastic
c. inelastic
d. negative
Suppose that, as a result of a decrease in the market supply of labor, the wage rate has
risen 10%. After adjusting its employment level, a firm finds its total wage bill has
decreased. This occurrence indicates that the firm’s labor demand:
a. is inelastic over this range of wages
b.* is elastic over this range of wages
c. is unit elastic over this range of wages
d. was inelastic at the old wage, but is elastic at the new, higher wage
Cross-sectional data suggest that all else equal:
a. the male labor force participation rate varies inversely with education
b. the labor force participation rate of single women varies inversely with the
reservation wage
c. the labor force participation rate of married men varies inversely with the number of
children in the household
d. the labor force participation rate of married women varies inversely with the
husband’s income
Occupational segregation creates:
a. a redistribution of a larger national output
b. a redistribution of a smaller national output
c. a larger national output but no redistribution
d. a smaller national output but no redistribution
To pay for health care reforms, suppose a new payroll tax is levied on employers. The
economic burden of the new tax will fall:
a.on employers because the payroll tax is collected from them
b.more on workers the more elastic is the labor supply curve
c.more on workers the more inelastic is the labor supply curve
d.entirely on workers as long as the labor supply curve slopes upward
The authors suggest that unions developed primarily in response to:
a.purposeful mistreatment by employers
b.the inability of preindustrial workers to be self-sufficient
c.dependency of workers on factory owners as a result of industrialization
d.attempts by employers to achieve an eight-hour day
The largest increase in the female-male earning ratio occurred:
a. in the 1960s
b. in the 1970s
c. in the 1980s through the mid-1990s
d. none of the above: there has been no change in the female-male earning ratio for the
past 40 years
Legal immigration to the U.S.:
a.peaked early in the twentieth century
b.typically is less than illegal immigration
c.is heavily skewed towards northern and western European nations by law
d.is biased in favor of relatives of U.S. citizens and people who have specific job skills
In which industries does the Bureau of Labor Statistics project the fastest employment
growth over the next ten years?
a. Real estate and finance
b. Fast food preparation and legal services
c. Maintenance and law enforcement
d. Health care and computers
Internal labor markets may contribute to dynamic efficiency by:
a.paying younger workers more than their marginal revenue products
b.paying older workers more than their marginal revenue products
c.paying older workers less than their marginal revenue products
d.paying each worker a wage equal to her marginal revenue product
Data comparing income by gender and race:
a. provide proof of discrimination when differentials are observed
b. provide proof of no discrimination when average salaries are equal
c. must be interpreted with caution because efficiency loss may be the cause of
observed differentials
d. must be interpreted with caution because nondiscriminatory factors may explain all
or part of observed differentials
Of the following laws, which one contributed most to union membership?
a.Landrum-Griffin Act
b.Norris-LaGuardia Act
c.Sherman Act
d.Taft-Hartley Act
In 2011 the ratio of African American to white hourly wages was approximately:
a. 45%-55%
b. 60%-70%
c. 75%-85%
d. 90%-100%
Efficiency wage models are often criticized because:
a. other pay-for-performance plans could serve as a substitute for an efficiency wage
b. employees could be required to post a forfeitable bond instead
c. shirking could be reduced by deferred compensation plans
d. all of the above
Suppose an individual worker is on the upsloping portion of her labor supply curve.
Then for a wage increase the:
a. income and substitution effects both increase desired work hours
b. income and substitution effects are equal
c. income effect dominates the substitution effect
d. substitution effect dominates the income effect
The nonunion wage rate may fall as the result of a union wage increase because of the:
a.product-market effect
b.spillover effect
c.threat effect
d.compensating wage differential effect
Team bonuses:
a. solve the free-rider problem associated with individual bonuses
b. create a principal-agent problem by channeling effort toward team performance at the
expense of individual performance
c. typically comprise a large percentage of the total compensation of middle managers,
but almost none of the total pay of top executives
d. work best when targeted at relatively small groups of employees
High school completion rates are:
a. lower for both females and African Americans
b. lower for females, but about the same for African Americans and whites
c.* lower for African Americans, but about the same for males and females
d. about the same for males and females, African Americans and whites