Question Points

04 Jun Question Points

Question
Question Points

1. If the U.S. government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is:

a. $10,400.

b. $15,600.

c. $20,800.

d. $26,000.

2. Which of the following would not be considered human capital?

a. The golf clubs a professional golfer uses to play golf.

b. The golf balls a professional golfer uses to play golf.

c. The device a golfer uses to accurately measure distances on a golf course.

d. None of the choices apply.

3. Suppose that eight workers can manufacture 70 radios per day and that nine workers can manufacture 90 radios per day. If radios can be sold for $10 each, the value of marginal product of the ninth worker is:

a. 20 radios.

b. 90 radios.

c. $200.

d. $900.

4. If men’s preferences for work change such that more men want to be stay-at-home fathers, the wages paid to men who remain in the workplace would rise, all else equal.

a. True

b. False

5. Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that labor is the only input that varies for the firm. If the firm pays a wage of $700 per week and the marginal product of labor equals 100 units per week, then the marginal cost of producing an additional unit of output is:

a. $7.

b. $70.

c. $700.

d. We do not have enough information to answer this question.

6. It is illegal in the United States for firms to pay different employees different wages for doing the same job.

a. True

b. False

7. Suppose that Jake and Abby each win $1,000 in a state lottery . Jake spends his winnings on a new television. Abby saves her winnings for a “rainy day.” Which of the following is correct?

a. Both Jake’s and Abby’s behavior suggest that they base their purchasing decisions on transitory income.

b. Jake’s behavior suggests that he bases his purchasing decisions on transitory income rather than permanent income. Abby’s behavior suggest that she bases her purchasing decisions on permanent income rather than transitory income.

c. Jake’s behavior suggests that he bases his purchasing decisions on permanent income rather than transitory income. Abby’s behavior suggests that she bases her purchasing decisions on transitory income rather than permanent income.

d. Both Jake’s and Abby’s behavior suggest that they base their purchasing decisions on permanent income.

8. In general, less productive workers are paid less than more productive workers.

a. True

b. False

9. In order to calculate the value of the marginal product of labor, a manager must know the marginal product of labor and the wage rate of the worker.

a. True

b. False

10. Which of the following is an example of a compensating differential?

a. Two workers with different levels of on-the-job training earn different salaries.

b. Two workers whose jobs entail different working conditions earn different salaries.

c. Two workers whose jobs require different levels of technical expertise earn different salaries.

d. Two workers with different levels of natural ability earn different salaries.

11. The signaling theory of education maintains that workers who complete specific levels of education signal their high productivity to potential to employers.

a. True

b. False

12. A disadvantage associated with an Earned Income Tax Credit (EITC) program to reduce poverty is that it:

a. encourages illegitimate births because single women with children receive higher payments.

b. rewards laziness because it provides payments to those with low incomes regardless of their work effort.

c. does not help the poor who are unemployed.

d. creates unemployment by increasing the wage paid to unskilled workers above the equilibrium wage.

13. When comparing average wages for male and female workers in the United States, wages paid to females have been about 40 percent less than those paid to male workers.

a. True