Some economists argue that selective withdrawal has caused:
a. an increase in the observed average relative wages of those Black men who remain
employed.
b. White men to leave the labor market if they cannot find a job that offers at least their
reservation wage.
c. the labor force participation rate of men to be higher than the labor force participation
rate of women.
d. the rate of unemployment to be higher for Black women than for Black men.
e. the wages of Black men to rise quickly relative to those of White men from
1963″1973.
Which of the following is a condition that will result in the demand for labor being
inelastic?
a. The task can be performed easily using capital or labor.
b. The demand for the good is elastic.
c. Capital is a small share of the firm’s total costs.
d. Labor is a small share of the firm’s total costs.
e. The supply of capital is inelastic.
In the last 15 years, ______ has become the primary weapon in the war on poverty.
a. AFDC
b. TANF
c. SNAP
d. the Food Stamp program
e. EITC
Let $B denote the maximum combined amount that a group of workers is willing to
pay to implement safety policy X. What is the formula for calculating the value of a
statistical life, as defined by these workers?
a. VSL = $B/S where S is the number of workers whose lives will be saved by policy X
b. VSL = $B/S where S is the number of workers considering the adoption of policy X
c. VSL = $B*S where S is the number of workers whose lives will be saved by policy X
d. VSL = $B*S where S is the number of workers considering the adoption of policy X
e. VSL = $B+S where S is the number of workers considering the adoption of policy X
Until 1967 the benefit reduction rate of the AFDC program was set to ______, which
______.
a. unity; provided terrible work incentives
b. unity; doubled workers’ wages for each additional hour worker
c. 33 percent; provided terrible work incentives
d. 33 percent; gave workers the incentive to increase their work hours in order to gain
greater utility
e. 50 percent; provided adequate assistance for needy families
The compensating wage differential is:
a. the pay a worker receives for working overtime.
b. health insurance and other non pecuniary benefits all workers receive.
c. the extra wage given to compensate workers for bad working conditions.
d. the extra wage that will cause all workers to accept bad working conditions.
e. the higher wage caused by government interventions such as the minimum wage.
Suppose the firm wants to manufacture an additional 500 units of output and can use
either capital or labor. Each additional unit of capital costs $50, while each additional
worker demands a wage of $10 an hour. Capital will generate 25 units of output, while
a worker will generate 2 units of output per hour. What will the firm do?
a. The firm will employ 250 workers.
b. The firm will purchase 20 units of capital.
c. The firm will purchase 30 units of capital.
d. The firm will employ 20 workers.
e. The firm will employ 250 workers and 20 units of capital.
Suppose the price of capital increases to $11. Which of the following will occur?
a. The amount of capital used will increase to 6.
b. The amount of labor used will remain the same.
c. The level of output will increase to 36.
d. The amount of labor used will increase to 1 unit.
e. The level of output will remain the same.
Suppose time periods are denoted t=1,2,3, . . . ,T, where t=1 is the beginning and t=T is
the end. The discount rate is 1/2. Each period the firm can hire a worker (who is
employed for a single period). If no worker is hired, profits are zero. The worker’s
reservation utility is $30. Upon employment, the worker chooses whether to exert effort
e=1 or e=0. His utility is where $c is his consumption and $30 is the
value of shirking. The level of effort is soft information. In each of the periods, the firm
produces output valued at $y(e) where and y(1)=$1 Which of the
following is NOT a credible bonus payment with which workers will be motivated?
a. $30
b. $40
c. $45
d. $50
e. $55
For a nonparticipant, the substitution effect is and the income effect is.
a. zero, zero
b. zero, negative
c. zero, positive
d. negative, zero
e. positive, zero
What is the equilibrium wage?
a. $5
b. $7
c. $10
d. $13
e. $15
In a monopsony environment, an increase in the minimum wage ______ employment.
a. can increase or decrease
b. if the labor market is closed will increase
c. if the labor market is open will increase
d. will decrease
e. will not change
The canonical welfare programs are ______ and the usual recipients are ______.
a. AFDC and TANF; children under 18
b. AFDC and TANF; mothers of dependent children
c. AFDC and Food Stamps; the unemployed
d. Medicare and Medicaid; children under 18
e. Medicare and Medicaid; mothers of dependent children
In practice, the ______ of the minimum wage is usually ______.
a. coverage; incomplete
b. coverage; complete
c. enforcement; complete
d. effect; trivial
e. enforcement; trivial
A decrease in an individual’s wage causes the budget set to experience
a. a parallel shift outward.
b. a parallel shift inward.
c. no change.
d. a pivot upward.
e. a pivot downward.
The ______ provides low income workers with a tax credit. The program was greatly
expanded with the Tax Reform Act of 1986, which ______.
a. AFDC/TANF; extended coverage to children under 18
b. TANF; extended coverage to working parents with dependent children
c. AFDC; extended coverage to working parents with dependent children
d. EITC; extended coverage to children under 18
e. EITC; extended coverage to working parents with dependent children