Deck 7: The Labor Market: Workers, Wages, and Unemployment

Question 1

Compared to Western Europe, over the last three decades unemployment in United States has been ____ and the rate of job creation has been ______.

A) lower; slower
B) higher; faster
C) higher; slower
D) lower; faster

Answer 1

lower; faster

Question 2

The real purchasing power of the average worker's yearly earnings in the United States in 2014 was ____ as in 1960.

A) five times as large
B) more than twice as large
C) about the same
D) about half as much

Answer 2

more than twice as large

Question 3

Compared to the 1973 to 1995 period, average real earnings of workers ______ from 1960 to 1973.

A) grew more slowly
B) declined
C) grew at about the same rate
D) grew more rapidly

Answer 3

grew more rapidly

Question 4

Compared to the 1960 and 1973 period, average real earnings of workers ______ from 1973 to 1995 and then ______ from 1996 to 2010.

A) declined; grew more slowly
B) declined; declined even more
C) slowly; grew at about the same rate
D) grew more rapidly; declined

Question 5

In the period from 1996 to 2007, real wages in the United States _____ during the 1973 to 1995 period..

A) declined
B) declined more rapidly
C) grew at about the same rate
D) grew more rapidly

Question 6

All of the following describe trends in U.S. labor markets except:

A) growing wage equality in the United States in recent decades.
B) a slowdown in real wage growth since the 1970s.
C) substantial growth in the level of employment in the United States.
D) substantial growth in real ages during the last century.

Question 7

One trend in labor markets is:

A) a decrease in average real wages in the United States and other industrial countries.
B) decreasing wage inequality in the United States.
C) weak rates of job creation in the United States since 1980.
D) a slowdown in real wage growth in the United States since 1973.

Question 8

The increasing wage inequality in the United States is between _____ workers and ____ workers.

A) highly-skilled; unskilled
B) service-sector; industrial-sector
C) male; female
D) old; young

Question 9

In the United States between 1970 and 2000, employment:

A) was constant, while the over-sixteen population increased.
B) decreased, while the over-sixteen population increased.
C) grew more rapidly than the over-sixteen population.
D) grew at approximately the same rate as the over-sixteen population.

Question 10

All of the following describe trends in U.S. labor markets except:

A) growing wage inequality in the United States in recent decades.
B) a slowdown in real wage growth since the 1970s.
C) substantial growth in the level of employment in the United States since 2000.
D) substantial growth in real ages during the last century..

Question 11

The major labor market problem in the United States is ______ and in Western Europe the problem is _______.

A) high persistent unemployment; low average wages
B) high persistent unemployment; increasing wage inequality
C) increasing wage inequality; increasing wage inequality
D) increasing wage inequality; high persistent unemployment

Question 12

The real purchasing power of the average worker's yearly earnings in the United States in 2014 was ____ as in 1929.

A) five times as large
B) more than twice as large
C) about the same
D) about half as much

Question 13

In the United States there is evidence of:

A) an increase in in job creation since 2000.
B) increasing wage inequality.
C) increasing wage equality.
D) an increase in the proportion of the population over 16 employed since 2000.

Question 14

One trend in labor markets is:

A) a decrease in average real wages in the United States and other industrial countries.
B) increasing wage inequality in the United States.
C) weak rates of job creation in the United States since 1980.
D) an increase in the rate of real wage growth since the early 1970s.

Question 15

The growth rate of average annual earnings in the United States from 1973 to 1995 was:

A) higher than it was from 1960 to 1973.
B) lower than it was from 1960 to 1973.
C) the same as it was from 1960 to 1973.
D) roughly equal to zero.

Question 16

In the United Sates, the average annual rate of growth of real wages was fastest in the period:

A) 1960-1973.
B) 1960-1995.
C) 1996-2010.
D) 1973-1995.

Question 17

Compared to the United States, over the last three decades unemployment in Western Europe has been ____ and the rate of job creation has been ______.

A) lower; slower
B) higher; faster
C) higher; slower
D) lower; faster

Question 18

In the twentieth century, average real wages have risen substantially:

A) only in the United States.
B) in industrial countries excluding the United States.
C) in industrial countries including the United States.
D) in neither the United States nor other industrial countries.

Question 19

A "two-tier" labor market in the United States refers to plenty of jobs for ______ workers and few jobs for _____ workers.

A) highly-skilled; unskilled
B) southern; northern
C) unskilled; highly-skilled
D) old; young

Question 20

In the United States the real wages of the least-skilled, least educated workers have ______ and the wages of best-educated, highest skilled workers have ______.

A) increased; increased
B) declined; increased
C) increased; declined
D) declined; remained constant

Question 21

The following table provides information about production at the XYZ-TV Company. How many workers will XYZ-TV Company hire if the going wage for TV production workers is $30,000?

A) 0
B) 1
C) 2
D) 3

Question 22

In the market for labor, the price of labor is the:

A) same as price of the product produced by the labor.
B) real wage.
C) marginal product of labor.
D) number of hours employed per year.

Question 23

The marginal product of labor is the additional:

A) wage paid for an additional hour of work.
B) wage paid for an additional worker employed.
C) labor employed to produce one more unit of output.
D) output produced by one more worker.

Question 24

High Tech, Inc. produces plastic chairs that sell for $10 each. The following table provides information about how many plastic chairs can be produced per hour. For simplicity, assume that labor is the only input. How many workers will be hired if the hourly wage for workers is $50?

A) 1
B) 3
C) 5
D) 2

Question 25

High Tech, Inc. produces plastic chairs that sell for $10 each. The following table provides information about how many plastic chairs can be produced per hour. For simplicity, assume that labor is the only input. How many workers will be hired if the hourly wage for workers is $120?

A) 0
B) 3
C) 5
D) More than 5

Question 26

High Tech, Inc. produces plastic chairs that sell for $10 each. The following table provides information about how many plastic chairs can be produced per hour. For simplicity, assume that labor is the only input. How many workers will be hired if the hourly wage for workers is $30?

A) 1
B) 2
C) 3
D) 4

Question 27

Firms will hire additional workers as long as the wage:

A) is less than the marginal product of labor.
B) equals the marginal product of labor.
C) is greater than the marginal product of labor.
D) is less than the value of the marginal product of labor.

Question 28

The marginal product of labor and the price of the output produced determine the:

A) the supply of labor
B) worker mobility
C) the price of labor
D) the demand for labor

Question 29

The following table provides information about production at the XYZ-TV Company. How many workers will XYZ-TV Company hire if the going wage for TV production workers is $60,000?

A) 0
B) 4
C) 5
D) More than 5

Question 30

The value of the marginal product of labor equals the marginal product of labor times the:

A) real wage.
B) nominal wage.
C) price of output.
D) quantity of labor.

Question 31

The extra production gained by employing one more worker is called the:

A) real wage of labor.
B) price of labor.
C) marginal product of labor.
D) opportunity cost of labor.

Question 32

The following table provides information about production at the XYZ-TV Company. How many workers will XYZ-TV Company hire if the going wage for TV production workers is $28,000?

A) 1
B) 2
C) 3
D) 4

Question 33

The real wage is the:

A) price of labor.
B) marginal product of labor .
C) supply of labor.
D) the ratio of wage of unskilled workers to the wage of skilled workers.

Question 34

The following table provides information about production at the XYZ-TV Company. How many workers will XYZ-TV Company hire if the going wage for TV production workers is $32,000?

A) 0
B) 1
C) 2
D) 3

Question 35

According to the principle of diminishing returns to labor, if the amount of capital and other inputs are held constant, employing additional workers:

A) increases output at an increasing rate.
B) increases output at a constant rate.
C) increases output at a decreasing rate.
D) decreases output at an increasing rate

Question 36

All of the following describe trends in the labor markets of the industrialized world EXCEPT:

A) growing wage inequality.
B) a slowdown in real wage growth since the 1970s.
C) low rates of unemployment in Western Europe.
D) substantial growth in real wages over the twentieth centaury

Question 37

Which of the following labor market trends have occurred in both the U.S. and in most Western European countries?

A) continuous and substantial growth in real wages and substantial job growth
B) a substantial growth in real wages and double digit rates of unemployment in the 1990s
C) a substantial growth in real wages over the twentieth centaury
D) a pronounced decrease in wage inequality and double digit rates of unemployment in the 1990s

Question 38

The demand for labor depends on ______ and _______.

A) the supply of labor; the marginal product of labor
B) the supply of labor; the price of output produced
C) the rate of price inflation; the price of the output produced
D) the marginal product of labor; the price of output produced

Question 39

High Tech, Inc. produces plastic chairs that sell for $10 each. The following table provides information about how many plastic chairs can be produced per hour. For simplicity, assume that labor is the only input. How many workers will be hired if the hourly wage for workers is $70?

A) 1
B) 2
C) 3
D) 4

Question 40

The principle of diminishing returns to labor is based on the:

A) scarcity principle.
B) cost-benefit principle.
C) principle of increasing opportunity cost.
D) equilibrium principle.

Question 41

An increase in number of foreign immigrants allowed into the country who wish to work will:

A) increases labor demand.
B) decreases labor demand.
C) increases labor supply.
D) decreases labor supply.

Question 42

If the price of TVs produced by XYZ-TV Company falls from $1,000 to $750 per TV set, then the:

A) supply of labor to the XYZ-TV Company increases.
B) supply of labor to the XYZ-TV Company decreases.
C) demand for labor by the XYZ-TV Company increases.
D) demand for labor by the XYZ-TV Company decreases.

Question 43

The minimum payment you are willing to accept to do a job is your:

A) nominal wage.
B) real wage.
C) reservation price.
D) value of marginal product.

Question 44

Production data for Joe's Pizza Parlor are as follows. For simplicity assume that labor is the only input. Each pizza sells for $5. How many workers will Joe hire if he must pay each one $45 a day?

A) 1
B) 2
C) 3
D) 4

Question 45

An increase in the size of the working-age population:

A) increases labor demand.
B) decreases labor demand.
C) increases labor supply.
D) decreases labor supply.

Question 46

The demand for labor decreases when the:

A) real wage increases.
B) real wage decreases.
C) value of the marginal product of labor increases.
D) value of the marginal product of labor decreases.

Question 47

If the price of TVs produced by XYZ-TV Company falls from increases from $1,000 to $1,250 per TV set, then the:

A) supply of labor to the XYZ-TV Company increases.
B) supply of labor to the XYZ-TV Company decreases.
C) demand for labor by the XYZ-TV Company increases.
D) demand for labor by the XYZ-TV Company decreases.

Question 48

An increase in the price of the output produced by labor will:

A) increase the supply of labor.
B) decrease the supply of labor.
C) increase the demand for labor.
D) decrease the demand for labor.

Question 49

The demand for labor increases when the:

A) real wage increases.
B) real wage decreases.
C) value of the marginal product of labor increases.
D) value of the marginal product of labor decreases.

Question 50

As the real wage increases, the quantity of labor demanded ______ and the quantity of labor supplied _______.

A) increases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; increases

Question 51

Production data for Joe's Pizza Parlor are as follows. For simplicity assume that labor is the only input. Each pizza sells for $5. How many workers will Joe hire if he must pay each one $25 a day?

A) 1
B) 2
C) 4
D) 3

Question 52

Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages of agricultural workers will ______ and employment of agricultural workers will _____.

A) increase; increase
B) increase; decrease
C) decrease; not change
D) decrease; decrease

Question 53

A decrease in the price of the output produced by labor will:

A) increase the supply of labor.
B) decrease the supply of labor.
C) increase the demand for labor.
D) decrease the demand for labor.

Question 54

The decision whether to work at any given wage is an application of the

A) cost-benefit principle.
B) principle of increasing opportunity cost.
C) scarcity principle.
D) principle of comparative advantage.

Question 55

Holding other factors constant, if a larger proportion of the population enters the labor force as a result of a growing social acceptance of women working, then the real wages of workers will ______ and employment of workers will _____.

A) increase; increase
B) increase; decrease
C) decrease; not change
D) decrease; increase

Question 56

The introduction of a new technology that increases the productivity of labor will:

A) increase the supply of labor.
B) decrease the supply of labor.
C) increase the demand for labor.
D) decrease the demand for labor

Question 57

As the real wage decreases, the quantity of labor demanded ______ and the quantity of labor supplied _______.

A) increases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; increases

Question 58

Production data for Joe's Pizza Parlor are as follows. For simplicity assume that labor is the only input. Each pizza sells for $5. How many workers will Joe hire if he must pay each one $35 a day?

A) 1
B) 2
C) 3
D) 4

Question 59

If the price of tables sold by All-Oak Table Co. increases from $400 to $500, then the:

A) supply of labor to All-Oak Table Co. increases.
B) supply of labor to All-Oak Table Co. decreases.
C) demand for labor by All-Oak Table Co. decreases.
D) demand for labor by All-Oak Table Co. increases.

Question 60

Holding other factors constant, if 3D-printing technology allows factory workers to manufacture more products per hour, then the real wages of factory workers will ______ and employment of factory workers will _____.

A) increase; increase
B) increase; decrease
C) decrease; not change
D) decrease; increase

Question 61

If the existence of alternative opportunities makes people become less willing to work in poultry processing plants, then the real wage of unskilled workers in poultry processing plants is predicted to ______ and the employment of unskilled workers in poultry processing plants is predicted to ______.

A) increase; increase
B) increase; decrease
C) increase; not change
D) decrease; decrease

Question 62

If the introduction of industrial robots in the poultry industry means that robots will now do most of the tasks in poultry processing plants, thereby replacing most of the unskilled workers. Then the real wage of unskilled workers in poultry processing plants is predicted to ______ and the employment of unskilled workers in poultry processing plants is predicted to ______.

A) increase; increase
B) increase; decrease
C) increase; not change
D) decrease; decrease

Question 63

Larger increases in the demand for labor than in the supply of labor explain:

A) the substantial increase in real wages.
B) the slowdown in real wage growth.
C) increasing wage inequality.
D) skill-biased technological change.

Question 64

Holding other factors constant, an increase in the capital stock ______ the real wage and ______ employment.

A) increases; increases
B) increases; decreases
C) increases; does not change
D) decreases; increases

Question 65

A sharp increase in the price of beef that causes consumers to switch to chicken is predicted to ____ the real wage and ____ employment of unskilled workers in a poultry processing plant.

A) increase; increase
B) increase; decrease
C) increase; not change
D) decrease; decrease

Question 66

The two most important factors contributing to increased productivity in industrialized countries in the twentieth century were:

A) higher relative prices and a larger labor supply.
B) higher relative prices and technological progress.
C) technological progress and increases in the capital stock.
D) technological progress and increases in the labor supply.

Question 67

Holding other factors constant, if oil prices rise relative to the prices of other products, then the real wages of oil workers will ______ and employment of oil workers will _____.

A) increase; increase
B) increase; decrease
C) decrease; not change
D) decrease; increase

Question 68

Holding other factors constant, if the retirement of many in people in the post-war baby boom generation reduces the portion of the population is the labor force, then the real wages of workers will ______ and employment of workers will _____.

A) increase; increase
B) increase; decrease
C) decrease; not change
D) decrease; increase

Question 69

A pandemic causes the deaths of a large proportion of the working-age population in the country of Alpha. As a result the real wage in Alpha _____ and employment in Alpha ____..

A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; increase

Question 70

Slower growth in labor demand in combination with increases in labor supply explains ____________ accompanied by __________.

A) a slowdown in real wage growth; a decline in employment
B) a slowdown in real wage growth; rapid employment growth
C) a slowdown in real wage growth; increasing wage inequality
D) accelerated real wage growth; a decline in employment

Question 71

Long-term increases in productivity that have increased the demand for labor, and raised real wages, have resulted primarily from ______ and _____.

A) technological progress; a modernized capital stock
B) technological progress; an increased labor supply
C) a modernized capital stock; skill-biased technological change
D) a modernized capital stock; an increased labor supply

Question 72

Holding other factors constant, if the education and skills of the typical worker in an economy increases, then the real wages of workers will ______ and employment of workers will _____.

A) increase; increase
B) increase; decrease
C) decrease; not change
D) decrease; increase

Question 73

If new production technology is put into practice that allows workers to increase their productivity and process more chickens per hour, then the real wage of unskilled workers in poultry processing plants is predicted to _____ and the employment of unskilled workers in poultry processing plants is predicted to _____.

A) increase; increase
B) increase; decrease
C) increase; not change
D) decrease; decrease

Question 74

As a result of a war in the country of Omega, refugees flee to the country of Alpha to seek employment. Holding other factors constant, the influx of refugees will ______ the real wage in Alpha and ______ employment in Alpha.

A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; increase

Question 75

Real wages increased in industrialized countries in the twentieth century because the demand for labor:

A) increased more rapidly than the supply of labor increased.
B) increased more slowly than the supply of labor increased.
C) increased, while the supply of labor decreased.
D) decreased, while the supply of labor increased.

Question 76

Factors increasing the U.S. labor supply and thereby contributing to the slowdown in real-wage growth that began in the 1970s include ______ and _____.

A) skill-biased technological change; globalization
B) increased labor force participation by women; the coming-of-age of the baby-boom generation
C) technological progress; diminishing returns to labor
D) increasing wage inequality; globalization

Question 77

An increase in the demand for chicken is predicted to ______ the real wage and ______ employment of unskilled workers in a poultry processing plant.

A) increase; increase
B) increase; decrease
C) increase; not change
D) decrease; decrease

Question 78

Large productivity gains explain:

A) increasing wage inequality
B) high unemployment in Western Europe.
C) skill-based technological change.
D) the long-term increase in real wages

Question 79

A war destroys much of the capital stock in the country of Omega. As a result, holding other factors constant, the real wage in Omega will ______ and employment in Omega will ______.

A) increase; increase
B) increase; decrease
C) increase; not change
D) decrease; decrease

Question 80

Holding other factors constant, technological progress ______ the real wage and ______ employment.

A) increases; increases
B) increases; decreases
C) increases; does not change
D) decreases; increases