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.
- 90 radios.
Consider the following daily production data for Caroline’s Cookies, Inc. Caroline’s sells cookies for $2.50 each and pays the workers a wage of $325 per day.
What is the fourth worker’s marginal product of labor?
- 120 cookies
- 140 cookies
c. 160 cookies
- 180 cookies
3. If the demand curve for beef shifts to the right, then the value of the marginal product of labor for butchers will
- remain unchanged.
- rise or fall; either is possible.
4. This figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D1 and D2 are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market.
Which of the following events would most likely explain a shift of the labor-demand curve from D2 back to D1?
- The price of automobiles decreased.
- A large number of immigrants entered the automobile-worker market.
c. A technological advance increased the marginal product of automobile workers.
d. The demand for automobiles increased.
The distinction between purchase price and rental price applies to which factor(s) of production?
a. land only
- capital only
- land and capital only
- land, capital, and labor
6. The Black Death in fourteenth-century Europe resulted in
a. a lower marginal product of labor of surviving workers.
- a higher marginal product of labor of surviving workers.
c. economic hardship for surviving peasants.
- economic prosperity for surviving landowners.
Working in a slaughterhouse is much riskier and more unpleasant than working in a bookstore. As a result, we’d expect a difference in wages between the two jobs. The difference is known as
a. an efficiency wage.
- a compensating differential.
c. a wage adjustment.
- a minimum wage.
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.
9. Which of the following would not be considered human capital?
a. the golf clubs a professional golfer uses to play golf
- the golf balls a professional golfer uses to play golf
- the device a golfer uses to accurately measure distances on a golf course
d. none of the above would be considered human capital
The time spent by students in college
a. leads to lower lifetime earnings because opportunity costs are high.
b. is an investment in human capital.
- decreases human capital by lowering work experience.
- increases as the wages paid to low-skilled workers rise.
According to proponents of the signaling theory of education,
a. schooling has no real productivity benefit.
- no one person finds it easier to earn a college degree than does any other person.
c. the human-capital view of education is entirely correct.
- employers send signals to young people to persuade them to expend whatever effort is necessary to earn college degrees.
12. How does the theory of efficiency wages explain above-equilibrium wages?
a. Employers are forced to pay higher wages in efficient markets.
b. Employers give their workers a higher wage in the hope that it will lead to increased productivity.
c. Workers get higher wages when they prove they are increasing their productivity.
d. Workers demand higher wages to compensate for poor fringe benefits.
13. Evidence of discrimination in labor markets
a. applies only to race and gender.
- is conclusively identified in large differences in average wages rates between men and women.
c. is difficult to verify by reference to differences in average wage rates.
d. is more easily identified on the basis of race than gender.
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
Which of the following groups has the lowest poverty rate?
- children (under age 18)
- female households, no spouse present