Question Question 1 of 20 5.0 Points

04 Jun Question Question 1 of 20 5.0 Points

Question
Question 1 of 20

5.0 Points

Which of the following is the most important reason for growing inequality in the income distribution in the United States?

A. inheritances

B. an increase in demand for highly educated workers

C. discrimination

D. a steady increase in tuition and fees for a college education

Question 2 of 20

5.0 Points

The poverty rate in the United States is highest for:

A. married couples.

B. childless households.

C. single people.

D. female headed households.

Question 3 of 20

5.0 Points

When wages increase, the income effect ________ the supply of labor and the substitution effect ________ the supply of labor.

A. increases; decreases

B. decreases; increases

C. decreases; decreases

D. increases; increases

Question 4 of 20

5.0 Points

If Jerry’s demand for leisure increases as the wage increases:

A. the substitution effect dominates the income effect.

B. the income effect dominates the substitution effect.

C. the income effect is completely offset by the substitution effect.

D. There is insufficient information.

Question 5 of 20

5.0 Points

According to the income effect of labor supply, if leisure is a normal good, then an increase in the wage rate will ________ the quantity of labor ________.

A. increase; demanded

B. decrease; supplied

C. decrease; demanded

D. increase; supplied

Question 6 of 20

5.0 Points

When a firm hires a worker for one hour, the marginal cost to that firm equals the:

A. average total cost of production at the quantity produced.

B. diminishing marginal productivity of that worker.

C. hourly wage of that worker.

D. price of each item that the worker produces in that hour.

Question 7 of 20

5.0 Points

A decrease in the supply of musicians ________ the number of musicians employed, and ________ the wages paid to musicians.

A. increases; increases

B. increases; decreases

C. decreases; increases

D. decreases; decreases

Question 8 of 20

5.0 Points

If the price of output increases the labor ________ curve shifts to the ________.

A. supply; left

B. demand; left

C. demand; right

D. supply; right

Question 9 of 20

5.0 Points

When the wage falls:

A. all workers will work more hours.

B. all workers will work fewer hours.

C. some workers will work more hours and some workers will work fewer hours, but we don’t know whether average hours will increase or decrease.

D. some workers will work more hours and some workers will work fewer hours, but on average, hours worked will fall.

Question 10 of 20

5.0 Points

According to the substitution effect of labor supply, when the wage rate goes up:

A. it becomes more costly to consume leisure, so people will work more.

B. the opportunity cost of enjoying leisure goes down.

C. firms will hire more workers since people are more willing to work.

D. it becomes less costly to consume leisure, so people will work more.

Question 11 of 20

5.0 Points

If the equilibrium wage is above the actual wage:

A. the wage rate will rise.

B. the demand for labor will increase.

C. the wage rate will fall.

D. the demand for labor will decrease.

Question 12 of 20

5.0 Points

The marginal revenue product of labor is the:

A. change in revenue resulting from adding an additional unit of labor.

B. cost of additional labor necessary to produce an additional unit of output.

C. change in labor necessary to produce an additional unit of output.

D. change in output resulting from adding an additional unit of labor.

Question 13 of 20

5.0 Points

An equilibrium in the labor market is a situation in which:

A. there is no unemployment.

B. marginal revenue product equals the wage.

C. there is no pressure for wages to change.

D. wages exceed minimum wage.