Question 1

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries in Northern Minnesota. If Northern Minnesota experiences an increase in immigration from Canada, what happens in the market for bakers?

Accepted Answer

An increase in immigration from Canada would likely increase the labor supply in Northern Minnesota, leading to an increase in the supply of bakers, shifting the supply curve from S1 to S2.

Question 2

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Accepted Answer

Opportunity cost of leisure is the potential income that one could have earned during that leisure time. Thus, the person with the highest hourly wage has the highest opportunity cost of leisure. In this case, the medical doctor who earns $210 per hour has the highest opportunity cost of leisure.

Question 3

If the wages of a CPA decrease, (i)
Her opportunity cost of leisure increases.
(ii)
Her opportunity cost of leisure decreases.
(iii)
Her hours of labor supply may increase.(iv)
Her hours of labor supply may decrease.

Accepted Answer

When wages decrease, the opportunity cost of leisure decreases, and her hours of labor supply may either increase or decrease depending on her preferences and income effect.

Question 4

If the wages of a dentist increase,

Accepted Answer

An increase in wages raises the opportunity cost of leisure, potentially increasing labor supply, but it might also lead to a decrease in labor supply if the dentist values leisure more with higher income.

Question 5

Miguel receives a pay raise at his part-time job from $7.50 to $9 per hour. He used to work 10 hours per week, but now he decides to work 12 hours per week. For this price range, his labor supply curve is

Accepted Answer

An upward sloping labor supply curve indicates that as the wage rate increases, the quantity of labor supplied also increases. Since Miguel has received a pay raise, he will likely be willing to supply more hours of work at the higher wage rate. Therefore, his labor supply curve is upward sloping.

Question 6

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers increase, what happens in the market for bread bakers?

Accepted Answer

The wages paid to wedding cake bakers is not directly related to the demand for breads and pastries. Therefore, there is no reason for demand to increase or decrease. However, if wedding cake bakers are paid higher wages, some bakers who make breads and pastries may switch to making wedding cakes instead. This would decrease the supply of bread bakers, shifting the supply curve to the left from S2 to S1.

Question 7

A household member's decision about how much labor to supply is most closely linked to

Accepted Answer

A household member's decision about how much labor to supply depends on the tradeoff between leisure and work. The more leisure time they prefer, the less labor they will supply, and vice versa. Factors of production, technological change, and immigration trends can affect the overall demand for labor, but they do not directly influence an individual's decision about how much labor to supply.

Question 8

An upward-sloping labor supply curve means that

Accepted Answer

An upward-sloping labor supply curve means that as the wage rate increases, the opportunity cost of leisure also increases. Therefore, workers increase the quantity of labor they supply, which implies that they supply more labor when wages are high. Option A is incorrect because it suggests that an increase in income leads to a decrease in labor supply, which is inconsistent with an upward-sloping labor supply curve. Option B is also incorrect because it implies that workers prefer to work less when wages are high, which contradicts the law of supply.

Question 9

Your college roommate receives a pay raise at her part-time job from $9 to $11 per hour. She used to work 10 hours per week, but now she decides to work 15 hours per week. For this price range, her labor supply curve is

Accepted Answer

An upward sloping labor supply curve implies that the higher the wage rate, the larger the quantity of labor supplied. In this case, the increase in pay from $9 to $11 per hour will likely cause the roommate to want to work more hours (from 10 to 15). This indicates an upward sloping labor supply curve.

Question 10

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the bakery profession becomes less attractive to young women and men because of news reports documenting health risks, what happens in the market for bakers?

Accepted Answer

The supply of bakers decreases from S2 to S1 because fewer people are willing to enter the profession due to perceived health risks.

Question 11

An upward-sloping labor-supply curve implies that an increase in the wage induces

Accepted Answer

An upward-sloping labor-supply curve implies that as the wage rate increases, workers are willing to work more hours and enjoy less leisure time. Therefore, the quantity of labor supplied increases. This does not directly affect the quantity of output produced or the quantity of labor hired by firms.

Question 12

An upward-sloping labor-supply curve implies that an increase in the wage induces

Accepted Answer

An upward-sloping labor-supply curve indicates that as wages increase, workers are willing to supply more labor, thus increasing the quantity of labor they supply.

Question 13

Among the people who are characterized below, who has the highest opportunity cost of leisure?

Accepted Answer

The opportunity cost of leisure is the potential income that can be earned during that time. Therefore, the CPA who earns $150 per hour has the highest opportunity cost of leisure compared to the other options listed.

Question 14

If a worker responds to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is

Accepted Answer

When the opportunity cost of leisure increases, a worker will be incentivized to work more and take less leisure time, resulting in an upward sloping labor supply curve. This means that as the wage rate increases, the worker will supply more labor hours.

Question 15

Which of the following statements is correct? An individual worker's labor supply curve

Accepted Answer

An individual's labor supply curve can slope backward if they choose to work fewer hours as wages increase, indicating that the income effect outweighs the substitution effect, leading them to value leisure more as their income rises.

Question 16

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers decrease, what happens in the market for bread bakers?

Accepted Answer

If the wages for wedding cake bakers decrease, some bakers might switch to making wedding cakes instead, reducing the supply of bread bakers. However, if the context implies that lower wages in a related field make bread baking more attractive, then supply could increase as more bakers enter the bread market.

Question 17

If a worker responds to an increase in the opportunity cost of leisure by taking more leisure, then her labor supply curve is

Accepted Answer

According to the law of demand, the quantity demanded of a good or service decreases as the price of that good or service increases. Similarly, as the opportunity cost of leisure increases, the quantity supplied of labor (i.e., the amount of time a worker is willing to work) should also increase. Therefore, the labor supply curve should be upward sloping. However, if a worker responds to an increase in the opportunity cost of leisure by taking more leisure, then her labor supply curve actually slopes backward (i.e., it is upward sloping at low wages and downward sloping at high wages). This occurs because at low wages, the worker is not earning enough to make it worthwhile to work more and thus will choose more leisure. At high wages, the worker is earning enough to make it worthwhile to work more and thus will choose less leisure.

Question 18

If Ernie's individual labor supply curve is upward sloping, then Ernie responds to an increase in the

Accepted Answer

If Ernie's individual labor supply curve is upward sloping, it means that Ernie is willing to work more hours at a higher wage rate, indicating a positive relationship between wage and labor supply. Therefore, Ernie responds to an increase in the wage by working more hours per week.

Question 19

The labor supply curve reflects how

Accepted Answer

The labor supply curve reflects how workers' decisions about the labor-leisure tradeoff respond to a change in the wage. As the wage increases, workers are more likely to supply more labor hours as the opportunity cost of leisure time becomes higher. Conversely, as the wage decreases, workers may choose to work fewer hours and enjoy more leisure time. Therefore, the labor supply curve shows the relationship between the quantity of labor supplied and the wage rate.

Question 20

Figure 18-6 
-Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the bakery profession becomes more attractive to young women and men because of a new reality television show, what happens in the market for bakers?

Accepted Answer

The attractiveness of the bakery profession would likely increase the number of individuals willing to become bakers, thus increasing the supply of bakers from S1 to S2.

Quiz 18: The Markets for the Factors of Production

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries in Northern Minnesota. If Northern Minnesota experiences an increase in immigration from Canada, what happens in the market for bakers?

Among the people who are characterized below, who has the highest opportunity cost of leisure?

If the wages of a CPA decrease, (i) Her opportunity cost of leisure increases. (ii) Her opportunity cost of leisure decreases. (iii) Her hours of labor supply may increase.(iv) Her hours of labor supply may decrease.

If the wages of a dentist increase,

Miguel receives a pay raise at his part-time job from $7.50 to $9 per hour. He used to work 10 hours per week, but now he decides to work 12 hours per week. For this price range, his labor supply curve is

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers increase, what happens in the market for bread bakers?

A household member's decision about how much labor to supply is most closely linked to

An upward-sloping labor supply curve means that

Your college roommate receives a pay raise at her part-time job from $9 to $11 per hour. She used to work 10 hours per week, but now she decides to work 15 hours per week. For this price range, her labor supply curve is

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the bakery profession becomes less attractive to young women and men because of news reports documenting health risks, what happens in the market for bakers?

An upward-sloping labor-supply curve implies that an increase in the wage induces

An upward-sloping labor-supply curve implies that an increase in the wage induces

Among the people who are characterized below, who has the highest opportunity cost of leisure?

If a worker responds to an increase in the opportunity cost of leisure by taking less leisure, then his labor supply curve is

Which of the following statements is correct? An individual worker's labor supply curve

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers decrease, what happens in the market for bread bakers?

If a worker responds to an increase in the opportunity cost of leisure by taking more leisure, then her labor supply curve is

If Ernie's individual labor supply curve is upward sloping, then Ernie responds to an increase in the

The labor supply curve reflects how

Figure 18-6 -Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the bakery profession becomes more attractive to young women and men because of a new reality television show, what happens in the market for bakers?