Question 1

In equilibrium, when a competitive firm hires labour up to the point at which the value of the marginal product of labour equals the wage, it also produces up to the point at which the price equals marginal cost.

Accepted Answer

A) True 
 B)False

Question 2

Competition will tend to eliminate discrimination in the labour market if employers and employees are not biased and if government does not require discrimination.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following could result in women being paid less than men?

Accepted Answer

A)   women obtaining less human capital because they don't plan to work continuously to the age of retirement
B)   women entering and leaving the labour force to care for children
C)   customers preferring to deal with men
D)   women preferring to work in pleasant clean safe work places
E)   all of these answersF) A) and C)
G) A) and B)

Question 4

A wage differential among groups may not by itself be evidence of discrimination in the labour market because different groups have

Accepted Answer

A)   different preferences for the type of work they are willing to do.
B)   different levels of job experience.
C)   all of these answers are correct.
D)   different levels of education.E) A) and C)
F) A) and D)

Question 5

In a competitive market, which of the following is least likely to be the source of a persistent discriminatory wage differential?

Accepted Answer

A)   All of these answers could be the source of a persistent discriminatory wage differential.
B)   the customer
C)   the government
D)   the employerE) C) and D)
F) B) and C)

Question 6

Which of the following is not true with regard to workers who have a high value of marginal product? These workers

Accepted Answer

A)   have skills that are in relatively scarce supply.
B)   produce output for which there is great demand.
C)   usually have little capital with which to work.
D)   are usually highly paid.E) B) and C)
F) A) and B)

Question 7

A recent study of the determinants of wages for clerical staff at a university found that years of schooling, years of experience, age and job characteristics only explained about one-half of the difference in wages. Describe other factors that may be important in explaining wages differences for clerical staff.

Accepted Answer

Other factors may include job ...

Question 8

If a factor exhibits diminishing marginal product, hiring additional units of the factor will

Accepted Answer

A)   cause a reduction in output.
B)   have no effect on output.
C)   increase the marginal product of the factor.
D)   generate ever smaller amounts of output.E) B) and C)
F) C) and D)

Question 9

After graduating from college, you receive job offers from five different accounting firms. All job offers have a different compensation package. Is it irrational for you to accept an offer that doesn't provide the highest level of monetary compensation? Use the concept of compensating differentials to explain your answer.

Accepted Answer

Compensating differentials refer to diff...

Question 10

A compensating differential is the difference in wages paid to workers who are discriminated against and those who are not discriminated against.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements regarding discrimination is true?

Accepted Answer

A)   The existence of a wage differential among groups is strong evidence of discrimination in the labour market.
B)   Discrimination can only persist in a competitive labour market if customers are willing to pay to maintain the discriminatory practice or the government requires discrimination.
C)   Bigoted employers are the main source of a persistent discriminatory wage differential in a competitive market.
D)   Discrimination cannot exist in a competitive labour market.E) B) and C)
F) A) and D)

Question 12

An increase in the price of automobiles shifts the demand for autoworkers to the

Accepted Answer

A)   right and increases the wage.
B)   right and decreases the wage.
C)   left and decreases the wage.
D)   left and increases the wage.E) None of the above
F) A) and D)

Question 13

Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low.

Accepted Answer

Wages are determined by the value of wor...

Question 14

In order for a market to support superstars it must have which of the following characteristics?

Accepted Answer

A)   It must be involved in professional athletics.
B)   Every customer must be indifferent to the price they pay and the seller must be a competitor in the market for the product.
C)   Every customer must be willing to pay an enormous amount for the product and the product must be a necessity.
D)   Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low cost.E) A) and C)
F) None of the above

Question 15

An increase in the demand for apples will cause all but which of the following?

Accepted Answer

A)   a decrease in the number of apple pickers employed
B)   an increase in the value of the marginal product of apple pickers
C)   an increase in the price of apples
D)   an increase in the wage of apple pickersE) None of the above
F) All of the above

Question 16

Explain why the following situation is likely to persist: football players in Europe are the highest paid athletes but in the US they are paid much less than many other athletes.

Accepted Answer

Consumers use personal preferences when ...

Question 17

An increase in the supply of labour

Accepted Answer

A)   increases the value of the marginal product of labour and decreases the wage.
B)   decreases the value of the marginal product of labour and decreases the wage.
C)   decreases the value of the marginal product of labour and increases the wage.
D)   increases the value of the marginal product of labour and increases the wage.E) A) and B)
F) C) and D)

Question 18

What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry?

Accepted Answer

A)   increase the demand for fishing boats and decrease rental rates on fishing boats
B)   decrease the demand for fishing boats and increase rental rates on fishing boats
C)   decrease the demand for fishing boats and decrease rental rates on fishing boats
D)   increase the demand for fishing boats and increase rental rates on fishing boatsE) A) and D)
F) None of the above

Question 19

According to the signalling view of education, education

Accepted Answer

A)   can make any worker into a superstar.
B)   increases human capital and the wages of workers.
C)   only helps firm's sort workers into high-ability and low-ability workers.
D)   reduces the wage gap between high-skill and low-skill workers.E) B) and D)
F) A) and B)

Question 20

Figure 1 Labour (number of workers)

Labour (number of  Output  Marginal Product  Value of MPL  workers)  per hour  of Labour (MPL)  001529312414515 \begin{array}{cccc} 	ext { Labour (number of } & 	ext {  Output } & 	ext { Marginal Product } & 	ext { Value of MPL } \ 	ext { workers)  } & 	ext {per hour  } & 	ext {  of Labour (MPL)  } \\hline0 & 0 \ 1 & 5 \ 2 & 9 \ 3 & 12 \ 4 & 14 \ 5 & 15\end{array}  Labour (number of  workers)  012345​ Output per hour 059121415​ Marginal Product  of Labour (MPL)   Value of MPL ​ 
-Refer to Figure 1. If the price of output is €4 per unit, what is the value of the marginal product of labour as the firm moves from using four workers to using five workers?

Accepted Answer

A)   €4
B)   €8
C)   €12
D)   €56
E)   €60 F) B) and D)
G) A) and E)

Exam 17: The Economics of Factor Markets

An increase in the price of automobiles shifts the demand for autoworkers to the

Correct Answer
verified

Correct Answer
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Which of the following statements regarding discrimination is true?

Correct Answer
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If a factor exhibits diminishing marginal product, hiring additional units of the factor will

Correct Answer
verified

Competition will tend to eliminate discrimination in the labour market if employers and employees are not biased and if government does not require discrimination.

Correct Answer
verified

An increase in the supply of labour

Correct Answer
verified

Explain why the following situation is likely to persist: football players in Europe are the highest paid athletes but in the US they are paid much less than many other athletes.

Correct Answer
verified
Consumers use personal preferences when ...
View Answer

What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry?

Correct Answer
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In a competitive market, which of the following is least likely to be the source of a persistent discriminatory wage differential?

Correct Answer
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In order for a market to support superstars it must have which of the following characteristics?

Correct Answer
verified

Correct Answer
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Other factors may include job ...
View Answer

In equilibrium, when a competitive firm hires labour up to the point at which the value of the marginal product of labour equals the wage, it also produces up to the point at which the price equals marginal cost.

Correct Answer
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Which of the following could result in women being paid less than men?

Correct Answer
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An increase in the demand for apples will cause all but which of the following?

Correct Answer
verified

Correct Answer
verified
Compensating differentials refer to diff...
View Answer

Which of the following is not true with regard to workers who have a high value of marginal product? These workers

Correct Answer
verified

A compensating differential is the difference in wages paid to workers who are discriminated against and those who are not discriminated against.

Correct Answer
verified

Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low.

Correct Answer
verified
Wages are determined by the value of wor...
View Answer

A wage differential among groups may not by itself be evidence of discrimination in the labour market because different groups have

Correct Answer
verified

According to the signalling view of education, education

Correct Answer
verified

Exam 17: The Economics of Factor Markets

An increase in the price of automobiles shifts the demand for autoworkers to the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements regarding discrimination is true?

Correct AnswerverifiedShow Answer

If a factor exhibits diminishing marginal product, hiring additional units of the factor will

Correct AnswerverifiedShow Answer

Competition will tend to eliminate discrimination in the labour market if employers and employees are not biased and if government does not require discrimination.

Correct AnswerverifiedShow Answer

An increase in the supply of labour

Correct AnswerverifiedShow Answer

Explain why the following situation is likely to persist: football players in Europe are the highest paid athletes but in the US they are paid much less than many other athletes.

Correct AnswerverifiedConsumers use personal preferences when ...View AnswerShow Answer

What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry?

Correct AnswerverifiedShow Answer

In a competitive market, which of the following is least likely to be the source of a persistent discriminatory wage differential?

Correct AnswerverifiedShow Answer

In order for a market to support superstars it must have which of the following characteristics?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedOther factors may include job ...View AnswerShow Answer

In equilibrium, when a competitive firm hires labour up to the point at which the value of the marginal product of labour equals the wage, it also produces up to the point at which the price equals marginal cost.

Correct AnswerverifiedShow Answer

Which of the following could result in women being paid less than men?

Correct AnswerverifiedShow Answer

An increase in the demand for apples will cause all but which of the following?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedCompensating differentials refer to diff...View AnswerShow Answer

Which of the following is not true with regard to workers who have a high value of marginal product? These workers

Correct AnswerverifiedShow Answer

A compensating differential is the difference in wages paid to workers who are discriminated against and those who are not discriminated against.

Correct AnswerverifiedShow Answer

Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low.

Correct AnswerverifiedWages are determined by the value of wor...View AnswerShow Answer

A wage differential among groups may not by itself be evidence of discrimination in the labour market because different groups have

Correct AnswerverifiedShow Answer

According to the signalling view of education, education

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Consumers use personal preferences when ...
View Answer

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Other factors may include job ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Compensating differentials refer to diff...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Wages are determined by the value of wor...
View Answer

Correct Answer
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Correct Answer
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