Deck 19: Labor and Entrepreneurship the Human Inputs

Question 1

All other things being equal, an increase in the supply of labor will lead to a fall in the wage.

Answer 1

True

Question 2

One of the most significant developments in labor supply in recent times is the increase in the labor force participation of married women.

Answer 2

True

Question 3

Average real wages have not risen significantly since approximately 1973.

Answer 3

True

Question 4

Rising productivity usually reduces workers' standards of living.

Question 5

A worker's marginal revenue product depends upon his average product.

Question 6

The demand for labor is a derived demand.

Question 7

Money spent on college tuition is considered human capital by economists.

Question 8

The relationship between the quantity of labor supplied and the wage is governed by an income effect and a substitution effect.

Question 9

The marginal revenue product is the extra revenue the firm receives by selling one more unit of output.

Question 10

Marginal revenue product is the extra revenue the firm receives by hiring one additional unit of input.

Question 11

History has shown that over the long run, labor-saving technology has actually not reduced employment.

Question 12

Over the last 30 years, the income gap between the rich and the poor has declined.

Question 13

If the MRP of labor is below the wage rate, the firm should lay off workers.

Question 14

A person's decision to supply a certain amount of labor in a week is simultaneously a decision to consume a certain amount of leisure per week.

Question 15

The majority of new jobs created in the service sector of the U.S.economy have been in the information sector.

Question 16

There is only a small difference in wages between college graduates and workers who did not attend college.

Question 17

Innovation that improves machinery, power sources and other capital equipment will increase the demand for labor in the short run.

Question 18

Labor markets are generally perfectly competitive markets.

Question 19

Agriculture is a sector of the economy where increased productivity has been accompanied by a significant decrease in employment.

Question 20

The income effect of higher wages leads workers to want to work more.

Question 21

The income effect is thought to offset the substitution effect among very high wage earners.

Question 22

If the income effect of a change in the wage dominates the substitution effect, then workers will want to work more when the wage increases.

Question 23

The substitution effect is thought to dominate the behavior of low-wage workers.

Question 24

Spending on an education is considered an investment because it involves a sacrifice of current income for higher expected future income.

Question 25

One implication of human capital theory is that college graduates should earn substantially less than high school graduates.

Question 26

The substitution effect makes workers want to work less when the wage increases.

Question 27

Expenditures for attending college can be viewed as an investment in human capital.

Question 28

In reality, there is not one labor market, but many.

Question 29

The monetary return on a college education is considered economic rent.

Question 30

The supply of workers in an industry is influenced by the available working population and the nonmonetary attractiveness of the job.

Question 31

The quantity of labor supplied is dependent on the size of the working population and the wage rate.

Question 32

Since women earn less on average than men, we would expect that the substitution effect of a wage change would be more likely to dominate for women and the income effect would be more likely to dominate for men.

Question 33

Earnings of some highly skilled or highly specialized persons can be classified as economic rents.

Question 34

An investment in yourself is an investment in what economists call human capital.

Question 35

Wages are comparatively low in markets where demand for labor is low and supply is high.

Question 36

Economic rents can lead to large wage differentials.

Question 37

Wages will tend to be high in labor markets where supply is relatively high and demand is relatively weak.

Question 38

Anything that influences a good's price or the marginal physical product of labor will influence wages.

Question 39

An individual's supply curve is backward bending.

Question 40

The salary of an athlete like Peyton Manning is in part a reward for his unique ability-something economists call economic rent.

Question 41

Union membership was relatively low during the Great Depression.

Question 42

Wages in American industry are very high because of wage laws.

Question 43

The argument that the minimum wage law has significantly increased teenage unemployment is not supported by recent statistical analysis.

Question 44

Over 50 percent of all U.S.workers now belong to unions.

Question 45

Recent data and analysis confirms that minimum wage laws have significantly increased teenage unemployment.

Question 46

Teenagers generally have high marginal revenue products because they have not completed their educations and have little job experience.

Question 47

Teenage unemployment rates tend to be substantially higher than the overall unemployment rate.

Question 48

College graduates now earn nearly five times as much as their high school-educated peers but the gap is falling.

Question 49

The primary reason unionization in the United States has been declining is the shift of the U.S.labor force into service industries and out of manufacturing.

Question 50

Less than 13 percent of U.S.workers belong to unions.

Question 51

College graduates now earn nearly twice as much as their high school-educated peers and that gap is increasing.

Question 52

Unionism is much more prevalent in the United States than in other industrialized countries.

Question 53

Recent studies suggest that a rise in the minimum wage results in a substantial cut in the demand for teen labor.

Question 54

The government enacted minimum wage legislation to protect skilled workers.

Question 55

In the view of human capital theorists, educational institutions are factories that take less productive workers as their raw materials and create more productive workers as output.

Question 56

A labor union is an organization representing workers in negotiations with employers over wages, benefits, and working conditions.

Question 57

Union membership in the United States has fallen compared to what it was in the 1950s.

Question 58

Teenage unemployment rates have consistently been much higher than the overall unemployment rate and black teenagers have fared worse than white teenagers.

Question 59

After Hurricane Katrina, construction wages in New Orleans rose partly because of the loss of a working population.

Question 60

The real minimum wage has increased significantly over the last 40 years.

Question 61

A bilateral monopoly is a market situation in which there is only one buyer and only one seller.

Question 62

A monopsony is a market situation in which there is only one seller.

Question 63

The increasing share of women in the labor force may have contributed to the decrease in unionization.

Question 64

In the U.S.the total amount of work time lost to strikes is less than the amount of work time lost for coffee breaks.

Question 65

Union members earn about the same wage level as nonunion members in the same industry.

Question 66

A monopsony is a market situation in which there is only one buyer.

Question 67

One effect of having access to cheap foreign goods can be to raise workers' real wages.

Question 68

In comparison to the U.S., Germany has a relatively low percentage of union membership.

Question 69

Unions can only achieve wage gains by sacrificing employment.

Question 70

The United Automobile Workers union can select the most favorable point on the demand curve for labor and the auto manufacturing companies can do nothing in response.

Question 71

Collective bargaining is a process used by unions and management to settle upon the terms of a labor contract.

Question 72

A union acts like a monopoly seller of labor.

Question 73

The relationship between professional basketball players and the owners' association is an example of a bilateral monopoly.

Question 74

Since a union represents individuals rather than firms, it cannot be considered a monopoly.

Question 75

Firms use collective bargaining to set higher market prices for their products.

Question 76

With a monopsony in the labor market, a union can often raise wages and the number of workers hired.

Question 77

Unions often have the power to push wages above competitive levels.

Question 78

Union leaders who focus on increasing the size of their union will be aggressive in demanding higher wages.

Question 79

American unions came under increasing pressure in the 1950s because of stronger competition both at home and abroad.

Question 80

Union leaders who focus on increasing the size of their union will generally accept a wage just above the competitive level.