Deck 19: Labor and Entrepreneurship: the Human Inputs

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

If wages are above the MRP, a firm should employ more labor.

Question 7

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

Question 8

Jenny should work until her MRP equals her wage.

Question 9

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

Question 10

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

Question 11

Labor markets are generally perfectly competitive markets.

Question 12

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

Question 13

The demand for labor is a derived demand.

Question 14

Rising productivity usually reduces workers' standards of living.

Question 15

Average real wages have not risen significantly since approximately 1973.

Question 16

A change in wages creates a substitution and income effect on the quantity of labor supplied.

Question 17

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 18

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

Question 19

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

Question 20

Innovation that increases the productivity of capital equipment will increase the demand for labor in the short run but decrease wages in the long run.

Question 21

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

Question 22

In the United States, because men on average earn more than women, the substitution effect tends to outweigh the income affect when wages increase.

Question 23

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

Question 24

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

Question 25

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

Question 26

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

Question 27

An individual's supply curve is backward bending when wages rise above a certain point.

Question 28

The wage increase from investments in human capital is called economic rents.

Question 29

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 30

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

Question 31

Landlords receive their wages in the form of rents.

Question 32

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

Question 33

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

Question 34

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

Question 35

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

Question 36

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

Question 37

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

Question 38

Economic rents can lead to large wage differentials.

Question 39

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

Question 40

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

Question 41

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 42

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

Question 43

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

Question 44

Increases in education are analogous to investments in capital.

Question 45

Teenage unemployment rates tend to be a little lower than the overall unemployment rate.

Question 46

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

Question 47

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

Question 48

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

Question 49

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

Question 50

Recent studies have shown increases in the minimum wage have significantly reduced employment of teenagers.

Question 51

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

Question 52

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

Question 53

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

Question 54

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

Question 55

Union membership was relatively low during the Great Depression.

Question 56

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

Question 57

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

Question 58

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

Question 59

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

Question 60

The U.S. government enacted minimum wage legislation to protect skilled workers.

Question 61

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

Question 62

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 63

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

Question 64

In comparison to the United States, Germany has a relatively low percentage of union membership.

Question 65

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

Question 66

Labor union membership, as a percent of workers, has steadily declined since the 1930s.

Question 67

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

Question 68

Unions can only achieve wage gains by sacrificing employment.

Question 69

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

Question 70

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

Question 71

Labor union membership, as a percent of workers, has steadily declined over the last several decades.

Question 72

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

Question 73

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

Question 74

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

Question 75

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

Question 76

A labor union acts as a monopsony seller of labor.

Question 77

A labor union can increase wages by exercising market power on behalf of workers.

Question 78

In the United States, the total amount of work time lost to strikes is less than the amount of work time lost for coffee breaks.

Question 79

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

Question 80

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