Archives: Quiz

The short-run labor demand curve of a competitive firm is: a. its average revenue product curve b. its marginal revenue product curve, provided marginal product is below average product c. its marginal product curve d. stage II of the total […]

The shape of the indifference curves reflects: (All points along the ray 0P reflect a constant proportion of wages to fringe benefits.) a. a diminishing marginal rate of substitution of fringe benefits for wages b. increased utility as fringe benefits […]

Consider a proposed law to deregulate the hair-care industry. Barbers would be allowed to do work previously confined to stylists, and the latter would no longer be required to pass strict licensure exams. Which outcome would you expect to result […]

The inefficiencies of occupational segregation by gender arise because: a. women are paid less than their values of marginal product b. men are paid less than their values of marginal product c. both women and men are paid less than […]

Which of the following required equal treatment for all persons in hiring, firing, promotion and compensation decisions without regard to race, color, religion, sex, or nationality? a. Equal Pay Act of 1963 b. Civil Rights Act of 1964 c. A […]

Suppose an individual worker is on the backward-bending 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 […]

Mary’s employer is considering her for a firm-specific training program that will cost $3 per hour. Her current marginal revenue product is $15 per hour and will rise to $20 upon completion of the program. Of the following, Mary’s training […]

Compared to their counterparts in other developed countries, CEOs in the U. S. are paid: a. considerably less b. about the same c. considerably more d. a greater percentage of their compensation in the form of straight salary After all […]

The mode of this distribution is: a.10,000 workers b.between $20,000 and $30,000 c.between $30,000 and $40,000 d.between $40,000 and $50,000 If this person were now willing to supply only H1 hours of work at W3, we could conclude that: a. […]

Compared to a monopsonist that sells its output in a competitive product market, an otherwise identical monopsonist with monopoly power in the product market will pay: a. a lower wage b. a higher wage c. the same wage d. more […]

Given isoprofit line 1, this worker’s wage-fringe optimum is given by point: (All points along the ray 0P reflect a constant proportion of wages to fringe benefits.) a. A b. B c. C d. D Fuchs’ research suggests the most […]

Which of the following is not typically given as a reason the aggregate demand curve slopes downward and to the right? a.The real balances effect b.The foreign purchases effect c.The interest rate effect d.The substitution effect Compared to present-oriented people, […]

What is the value of the third worker’s marginal product? (the following table that shows the short-run production relationship and the product demand schedule for a firm.) a. $18 b. $57 c. $72 d. $342 Salaried workers can be considered […]

Compared to a conscripted military, an all-volunteer military: a.is likely to substitute labor for capital b.is likely to substitute capital for labor c.has a lower nominal cost and a lower real cost d.has a higher nominal cost and a higher […]

Relative to their monopsony levels, both the wage and the level of employment would increase in this market if a wage-setting union negotiates a wage: (the following diagram of a monopsonistic labor market.) a. anywhere between W1and W3 b. anywhere […]

The profit-maximizing level of job safety is a probability level of: (MBs and MCs are the marginal benefit and marginal cost of safety, respectively. Ps is the probability that a worker will not suffer an injury on the job during […]

With respect to workers’ compensation insurance, research by Moore and Viscusi indicates that job fatalities are: a.reduced because the positive incentive effect swamps the negative moral hazard effect of the law b.reduced because the negative moral hazard effect swamps the […]

The probability of accepting the next wage offer is: a.higher, the higher is the acceptance wage b.lower, the lower is the acceptance wage c.lower, the higher is the acceptance wage d.higher, the higher is unemployment compensation The aggregate labor force […]

Evidence suggests that unions reduce firm profitability and discourage investment, so that: a.the dynamic efficiency loss from unionization is smaller than the static efficiency loss b.the dynamic efficiency loss from unionization is greater than the static efficiency loss c.turnover in […]

Consider the impact of a general increase in real wages. Empirical evidence suggests that men will tend to work _____ hours and women will tend to work _____ hours. a. more; fewer b. more; about the same c. fewer; fewer […]

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 […]

The “law of diminishing marginal returns” begins to take effect at labor input level: a. 0 b. X c. Y d. Z If Wu is the union wage and Wn is the nonunion wage, the pure union wage advantage is: […]

Fringe benefits will tend to be a greater proportion of total compensation, the: a. more income elastic are fringe benefits b. more they increase worker turnover c. lower the employer’s share of the Social Security tax d. less there are […]

As a percentage of benefits, the largest share goes to: a. retirement and savings b. insurance c. paid leave d. legally required benefits Of the 3.8 million workers displaced from their jobs between 2003 and 2005, by 2006 most: a.were […]

The employer’s share of the Social Security and Medicare components of the payroll tax has increased, from 6.13% in 1980 to its current rate of 7.65%. Because employers pay no payroll tax on many fringe benefits, this change in tax […]

An arrangement that allows buyers and sellers to exchange things is called: A) a contract. B) a market. C) money. D) efficient. Which of the following statements about the gender gap in income is INCORRECT? A) Women are underrepresented in […]

If a product is a necessity and has no substitutes at all, demand for the product is most likely to be: A) very inelastic. B) inelastic. C) unitary elastic. D) elastic. The rational outcome of a guaranteed price matching or […]

Recall the Application about low-price guarantees and the prices of tires to answer the following question(s). Recall the Application. A study of the retail tire market suggests that prices are ________ in markets where firms offer low-price guarantees. A) generally […]

If supply is low relative to demand, then we can expect the equilibrium wage to be: A) demand-determined. B) relatively high. C) relatively low. D) neither high nor low, but very volatile. Which of the following is true for both […]

Diminishing marginal returns implies that: A) marginal costs are decreasing. B) marginal costs are increasing. C) marginal costs are constant. D) marginal costs may be increasing or decreasing. If a natural monopoly is forced to follow a policy of average-cost […]

If government sets a minimum price above the equilibrium price: A) some consumers gain at the expense of producers and the total surplus decreases. B) some consumers gain at the expense of producers and the total surplus increases. C) some […]

A U.S. company is attempting to cut costs by shifting some of its services to Thailand. This process of shifting production of products or services overseas to cut costs often results in: A) greater potential for market failure for those […]

The monopolistic competitive industry in Figure 11.5 will tend to: Figure 11.5 A) contract. B) remain the same size. C) expand. D) go out of business. An example of a public good is: A) a levee. B) a monopoly. C) […]

Since 1973, in the United States wages of skilled workers have: A) risen more slowly than those of unskilled workers. B) fallen due to foreign trade. C) remained constant. D) risen faster than those of unskilled workers. Producer surplus is […]

Refer to Figure 5.1. Using the initial-value method, if the price of a hamburger is decreased from $10 to $8, the price elasticity of demand equals: A) 1.5. B) 5.0. C) 1.0. D) 2.0. When it comes to pollution, economists […]

Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $7, we would expect that: A) demand will decrease until quantity demanded equals quantity supplied. B) supply will increase until quantity demanded equals quantity […]

Figure 10.6 shows prices, demands, and cost data for the only restaurant in a small town. What is its profit from senior customers under the senior discount policy of a $7 senior price and a $10 non-senior price? A) $1,200 […]

Prices below the free market equilibrium price are inefficient because the willingness to pay by someone to consume an additional unit ________ the marginal cost to someone for producing that unit. A) exceeds B) is less than C) equals D) […]

Figure 14.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. The insurance companies estimate that 40% […]

Suppose that the income elasticity of demand for new clothes is positive. Other things being equal, which of the following statements is correct? A) New clothes are a normal good. B) The quantity demanded of new clothes decreases as a […]

Because resources are limited: A) only the very wealthy can get everything they want. B) firms will be forced out of business. C) the availability of goods will be limited but the availability of services will not. D) people must […]

Refer to Figure 12.1. Six firms that produce chewing gum have formed a cartel. The cartel faces the market demand curve given by D. To maximize profits, the cartel should produce ________ packs of chewing gum and the price should […]

The ________ problem of public goods occurs because people can enjoy the benefits of these goods even when they do not have to pay for them. A) moral hazard B) free-hand C) free-rider D) external cost The threat of punishment […]

Which of the following statements is INCORRECT? A) A firm’s total economic cost is at least as large as the firm’s total accounting cost. B) A firm’s total economic cost includes both explicit cost and implicit cost of the firm. […]

Refer to Figure 10.6. The profit-maximizing (or loss-minimizing) level of output: A) is 10,000. B) is 0. C) is approximately 15,000. D) is approximately 25,000. A possible reason a nation might impose a protectionist policy such as a tariff is […]

The natural monopoly in Figure 13.3 wants to charge a price of: A) P1. B) P2. C) P3. D) P4. Refer to Figure 13.1. If the government regulates Armstrong Cable so they can earn only zero economic profit, the price […]

Table 14.5 Table 14.5 contains data on the marginal benefit of searching for a lower price for a digital camera. The price of the camera ranges from $100 at the lowest price store to $140 at the highest price store. […]

Refer to Table 7.2. The marginal utility of the fourth slice of pie per day is: Table 7.1 A) 20. B) 75. C) 15. D) 3. The price of apples increases from $1 to $1.10. At the same time, the […]

Refer to Figure 10.5. The profit-maximizing level of profit for the Memory Company is: A) -$1,800. B) -$1,200. C) -$800. D) $0. Additional Application The 2005-2006 Florida citrus harvest has been tallied and is over $1 billion. This is the […]

Deciding how products of a society are distributed among the citizens in an economy answers the economic question of: A) Who consumes the products produced? B) What will be produced? C) Where will the products produced be consumed? D) How […]