Question 1

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

Accepted Answer

Technological progress and increases in the capital stock were the two most important factors contributing to increased productivity in industrialized countries in the twentieth century. Technological progress allowed for advances in production processes and efficiency, while increases in the capital stock (i.e. more machinery and equipment) allowed for greater output per worker. A larger labor supply or higher relative prices may have had some influence, but were not as crucial to productivity growth.

Question 2

In recent decades,slower growth in the demand for labor accompanied by an accelerated growth in the supply of labor in the U.S.explains:

Accepted Answer

The answer of In recent decades,slower growth in the demand...

Question 3

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.

Accepted Answer

The work force in Alpha has increased, which increases the supply of labor and puts downward pressure on real wages but increases employment levels in Alpha.

Question 4

Two explanations for increasing wage inequality are ______ and ________.

Accepted Answer

Globalization and skill-biased technological change are two explanations for increasing wage inequality.

Question 5

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

Accepted Answer

Increased labor force participation by women and the coming-of-age of the baby-boom generation increased the labor supply and contributed to the slowdown in real-wage growth that began in the 1970s. Skill-biased technological change and globalization have also played a role, but are not listed as choices in combination with the two factors listed in Option B. Technological progress could lead to an increase in labor productivity and higher wages, rather than contributing to a slowdown in real-wage growth. Increasing wage inequality and diminishing returns to labor may also be factors, but they are not listed as combinations in any of the options.

Question 6

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

Accepted Answer

Real wages increased in industrialized countries in the twentieth century because the demand for labor increased more rapidly than the supply of labor increased. This means that as the demand for workers increased, employers had to offer higher wages to attract and retain workers. As a result, real wages (adjusted for inflation) increased over time.

Question 7

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

Accepted Answer

When both labor supply and labor demand rise at the same time, it is certain that quantity will increase but uncertain whether wages will rise or fall. If the demand shift was smaller than the supply shift there is downward pressure on real wages but an increase in employment.

Question 8

Increasing wage inequality results when international trade leads to ______ wages for workers in exporting industries and ______ wages for workers in importing industries.

Accepted Answer

International trade often leads to higher wages in exporting industries due to increased demand for their products and services, while importing industries may see lower wages due to increased competition and possibly outsourcing to lower-wage countries. This creates a wage gap between the two sectors, resulting in increasing wage inequality.

Question 9

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

Accepted Answer

An increase in the capital stock will lead to an increase in productivity, resulting in an increase in demand for labor and an increase in the marginal product of labor. This increase in demand for labor will lead to an increase in the real wage and an increase in employment. Therefore, option A is the correct answer.

Question 10

Globalization ______ the wages of workers in the exporting industries and ______ the wages of workers in the import-competing industries.

Accepted Answer

Globalization can lead to increased competition, which can lead to lower wages in the import-competing industries as companies seek to cut costs. However, in the exporting industries, increased demand and access to more markets can lead to higher wages. Therefore, globalization raises the wages of workers in the exporting industries and lowers the wages of workers in the import-competing industries, making B the best answer.

Question 11

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

Accepted Answer

Technological progress and a modernized capital stock have been the primary drivers of long-term increases in productivity, which have in turn increased the demand for labor and real wages. While an increased labor supply can contribute to short-term increases in productivity, it is not a sustainable driver of long-term growth. Skill-biased technological change can also contribute to increases in productivity, but it is a specific subset of technological progress rather than a separate factor.

Question 12

An increase in the demand for workers producing computers for export versus producing agricultural products that can be imported more cheaply from abroad is an example of how increasing wage inequality can result from:

Accepted Answer

The increase in demand for workers producing computers for export is a result of globalization, as countries specialize in the production of goods for which they have a comparative advantage. This specialization can lead to wage inequality as some industries become more lucrative than others. Therefore, increasing globalization is the reason why wage inequality can result from a shift in demand towards the computer industry.

Question 13

Initially,workers in the shoe industry and the computer industry earn the same wage.Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad,so domestic shoe prices fall.At the same time,foreign consumers purchase more computers,raising the relative price of computers.As a result of these changes,wages in the shoe industry ______ and wages in the computer industry ______.

Accepted Answer

The reduction in trade barriers leads to an influx of cheaper shoes produced abroad, which decreases the demand for domestic shoes and puts downward pressure on wages in the shoe industry. On the other hand, an increase in foreign demand for computers puts upward pressure on wages in the computer industry. Therefore, wages in the shoe industry decrease while wages in the computer industry increase.

Question 14

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

Accepted Answer

When demand for labor outpaces supply, employers compete for workers by offering higher wages, leading to a substantial increase in real wages.

Question 15

Slower real wage growth since the 1970s accompanied by rapid job growth can be explained by:

Accepted Answer

The answer of Slower real wage growth since the 1970s...

Question 16

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 ______.

Accepted Answer

A war that destroys much of the capital stock in a country will lead to a decrease in the productive capacity of the economy. This will result in a decrease in output and a decrease in the demand for labor. As a result, the real wage in Omega will decrease and employment in Omega will also decrease.

Question 17

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

Accepted Answer

Technological progress increases the productivity of labor, which in turn leads to an increase in output. This increase in output creates an increase in demand for labor, which raises wages and employment levels. Therefore, holding other factors constant, technological progress increases the real wage and employment levels.

Question 18

Macroland produces dishes and glassware.Before trade,a set of dishes sells for $100 and a set of glasses sells for $50.When Macroland opens to trade,foreign demand for domestically produced china is strong,raising the price of a set of dishes to $125.But foreign competition reduces the demand for domestically produced glasses,so that they now sell for $25 a set.Assuming workers cannot move between industries,the wages of workers producing dishes will ______ and the wages of workers producing glasses will ____.

Accepted Answer

When the price of dishes increases, Macroland will produce more dishes and hire more workers in the dish industry. This will increase the demand for labor in the dish industry and drive up wages in the short run. Therefore, the wages of workers producing dishes will increase.

On the other hand, when the price of glasses decreases, the demand for labor in the glass industry will decrease and fewer workers will be needed. This will decrease the demand for labor in the glass industry and drive down wages in the short run. Therefore, the wages of workers producing glasses will decrease.

Overall, the wages of workers producing dishes will increase and the wages of workers producing glasses will decrease. Therefore, the best choice is C.

Question 19

The slowdown in the growth of real wages in the United States since 1973 is consistent with a concurrent:

Accepted Answer

The slowdown in real wage growth since 1973 is consistent with a concurrent slowdown in productivity gains. As productivity gains have slowed, employers have less room to increase wages without cutting into profits. This has contributed to stagnant or slow-growing wages for many workers.

Question 20

Initially,workers in the shoe industry and the computer industry earn the same wage.Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad,so domestic shoe prices fall.At the same time,foreign consumers purchase more computers,raising the relative price of computers.As a result of these changes,the demand for labor in the shoe industry ______ and the demand for labor in the computer industry ______.

Accepted Answer

As domestic shoe prices fall due to cheaper imports, the demand for labor in the shoe industry decreases. On the other hand, the foreign demand for computers increases, causing an increase in the demand for labor in the computer industry. Therefore, the correct answer is "decreases; increases."

Quiz 17: Wages and Unemployment

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

In recent decades,slower growth in the demand for labor accompanied by an accelerated growth in the supply of labor in the U.S.explains:

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.

Two explanations for increasing wage inequality are and __.

Factors increasing the labor supply and thereby contributing to the slowdown in real-wage growth that began in the 1970s include __ and _.

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

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

Increasing wage inequality results when international trade leads to wages for workers in exporting industries and wages for workers in importing industries.

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

Globalization the wages of workers in the exporting industries and the wages of workers in the import-competing industries.

Long-term increases in productivity that have increased the demand for labor and the real wages of labor have resulted primarily from __ and _.

An increase in the demand for workers producing computers for export versus producing agricultural products that can be imported more cheaply from abroad is an example of how increasing wage inequality can result from:

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

Slower real wage growth since the 1970s accompanied by rapid job growth can be explained by:

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 .

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

The slowdown in the growth of real wages in the United States since 1973 is consistent with a concurrent: