The slope of the production function while holding capital fixed is
A. the marginal product of labor.
B. the marginal product of capital.
C. the average product of labor.
D. the labor-capital ratio.
E. the capital-labor ratio.
In the United States from 1950 to 2005, it is most likely that an unemployed person will
A. be re-employed in less than 5 weeks.
B. be re-employed in 5 to 14 weeks.
C. be re-employed in 14 to 26 weeks.
D. be re-employed in more than 26 weeks.
E. exit the labor force.
The social rate of return to schooling
A. includes all private benefits to schooling.
B. includes the signaling benefits to schooling.
C. includes the increase in national income resulting from education.
D. does not take into account the costs of education.
E. are always well defined.
Higher values of the Gini coefficient are associated with
A. greater education inequality.
B. greater income inequality.
C. less income inequality.
D. greater labor mobility.
E. less labor mobility.
If the intertemporal substitution hypothesis is correct, then
A. the unemployment rate is artificially high.
B. the unemployment rate is artificially low.
C. discouraged workers should be included in the unemployed population because they
actually want a job at the going wage.
D. discouraged workers should not be included in the unemployed population because
they are optimally choosing more leisure during a time of low wages.
E. discouraged workers wont exist.
In order for the compensating differential associated with a risky job to be negative (so
that a risky job pays less than a non-risky job), it must be that
A. many workers are willing to work the risky job for free.
B. most workers prefer the risky job to the safe job when both wages are equal.
C. the number of risky jobs is less than the number of workers who prefer the risky job.
D. there is great demand for labor in both sectors.
E. the government mandates that the wages in the two sectors be equal.
If a two-person household moves from Miami to Atlanta, which of the following can
describe the household?
A. Both members of the households are tied movers.
B. One member of the household is a tied stayer.
C. One member of the household is a tied mover while the other is a tied stayer.
D. Neither member of the household is a tied mover.
E. Neither member of the household is a tied stayer.
The single most important phenomenon in the U.S. labor market in the second half of
the 20th century was
A. the drastic reduction in the labor force participation rate of males.
B. the drastic increase in the labor force participation rate of females.
C. the elimination of the glass ceiling.
D. the increase in the average number of hours worked each week.
E. the elimination of child poverty.
Ally owns a shoe store. The market wage is $10 per hour, and the cost of capital is $2
per week for every $1,000 of capital borrowed. Consider the isocost line associated
with spending $8,000 per week, and let the y-axis be the amount of capital borrowed in
$1,000s. Which of the following is not true?
A. If Ally borrows no capital, she can employ 800 hours of work.
B. If Ally employs no workers, she can borrow $4 million of capital.
C. If Ally employs 600 hours of work, she can borrow $1 million of capital.
D. If Ally employs 400 hours of work, she can borrow $3 million of capital.
E. The slope of the isocost line is -5.
All but which one of the following statements about the Gini coefficient is true?
A. The Gini coefficient reflects the data shown in the Lorenz curve.
B. The Gini coefficient equals zero when there is perfect equality.
C. The Gini coefficient increases as income inequality increases.
D. The Gini coefficient must fall when the amount of income in an economy increases.
E. The Gini coefficient equals one when there is perfect inequality.
In general terms, which of the following statements regarding changes in income
inequality in the United States is correct?
A. Inequality has increased over the last 30 years as witnessed by the Gini coefficient
increasing from about 0.1 in 1970 to about 0.7 in 2000.
B. Inequality has increased over the last 30 years as witnessed by the Gini coefficient
increasing from about 0.3 in 1970 to about 0.45 in 2000.
C. Inequality has decreased over the last 30 years as witnessed by the Gini coefficient
decreasing from about 0.5 in 1970 to about 0.05 in 2000.
D. Inequality has decreased over the last 30 years as witnessed by the Gini coefficient
decreasing from about 0.8 in 1970 to about 0.25 in 2000.
E. Inequality has stayed about the same over the last 30 years as witnessed by a Gini
coefficient that has hovered around 0.6.
Why is it that a firm will typically not pay for general training?
A. General training is free.
B. General training is too expensive.
C. The benefits of general training depreciate quickly.
D. General training usually doesnt increase worker productivity.
E. The skills gained from the general training are transferable to other firms.
If the supply of unskilled domestic labor and the supply of unskilled immigrant labor
are both perfectly inelastic, then the immigration surplus to the domestic economy can
be estimated by:
A. The number of immigrants times the new wage rate.
B. The total number of workers under immigration times the difference in the old and
new wage rates.
C. One half of the number of immigrants times the new wage rate.
D. One half of the number of immigrants times the difference in the old and new wage
rates.
E. National income minus government spending on immigration programs.
Spot labor markets are best described as
A. firms post a wage and workers decide how many hours of work to sell at that wage.
B. workers post a wage and firms sign long-term contracts specifying how many hours
of work to purchase at that wage.
C. a worker decides how many hours of work to supply in each time period given
expectations concerning his or her age-wage profile.
D. unions and firms negotiate wage contracts.
E. workers retire when the value of their marginal product starts to fall.
What is a likely explanation as to why workers who have been on the job for a long
time earn more than newly hired workers?
A. Because workers in bad job matches tend to stay on the job longer.
B. Because workers in long-lasting job matches accumulate specific training over time,
which increases the workers productivity.
C. Because the positive effects of general training on education erode over time.
D. Young workers are more productive than older workers.
E. U.S. law requires older workers to be paid more than younger workers.
Estimates of the compensating wage differentials associated with particular job
characteristics are valid only if
A. all other factors that influence workers wages are held constant.
B. non-wage characteristics of the job are allowed to vary by sector.
C. firms are willing to pay higher wages to more skilled workers.
D. the compensation wage equals the workers marginal cost.
E. the firm provides non-pecuniary compensation for risks that workers encounter on
the job.
Risk-averse workers
A. have shallow wage-risk indifference curves when risk is graphed on the x-axis.
B. are willing to work in riskier environments for a relatively low increase in the wage.
C. are willing to accept large wage decreases in exchange for a safer work environment.
D. never work in risky environments.
E. are more productive than risk-loving workers.
In the long run, a decrease in the competitive wage will be associated with which of the
following?
A. A substitution effect in favor of employing more capital.
B. A scale effect in favor of employing more labor.
C. More employment if the wage decrease was a result of a decrease in the demand for
labor.
D. Less employment if the wage decrease was a result of an increase in the supply of
labor.
E. An increase in the output price.
Suppose 40 percent of all potential workers are highly skilled and contribute $50,000 to
the firm each year. The remaining 60 percent of potential workers are less skilled and
contribute only $30,000 to the firm each year. When schooling is not used as a signaling
device, how much is the firm willing to pay a worker chosen at random?
A. $30,000
B. $34,000
C. $38,000
D. $42,000
E. $50,000
How would imposing a minimum wage above the market clearing wage affect
employment in a competitive labor market?
A. Employment would increase as previously unemployed workers would be more
encouraged to find a job.
B. Employment would increase because a higher minimum wage would create more
jobs for low-skilled workers.
C. Employment would increase as firms would illegally hire workers below the original
competitive wage.
D. Employment would be unchanged as workers are non-responsive to low wages.
E. Employment would decrease as some workers who are willing to work at the lower
competitive wage would no longer be able to find work.