Question 1

A fall in the wage rate:&#10;A) Shifts the demand for labour.&#10;B) Shifts the supply of labour inwards.&#10;C) Leads to a movement along the demand for labour curve.&#10;D) Shifts the supply of labour outwards.

Accepted Answer

A fall in the wage rate does not shift the demand for labor curve but causes a movement along the demand for labor curve. This is because the demand curve for labor shows the relationship between the wage rate and the quantity of labor that employers are willing to hire at those wages. A change in the wage rate results in a movement along this curve, not a shift of the curve itself.

Question 2

The demand for labour is dependent on the demand for the final product. This means it is a _________ demand.&#10;A) Deranged&#10;B) Discovered&#10;C) Dependent&#10;D) Derived

Accepted Answer

The demand for labor is considered a derived demand because it is dependent on the demand for the final product that the labor helps to produce.

Question 3

Labour is a ___________ of production.&#10;A) Force&#10;B) Focus&#10;C) Filament&#10;D) Factor

Accepted Answer

Labour is considered a factor of production, along with land, capital, and entrepreneurship. These are the inputs used in the production of goods or services in the attempt to make an economic profit.

Question 4

An increase in the wage rate will lead to:&#10;A) An inward shift of the demand for labour&#10;B) An outward shift in the supply of labour&#10;C) A movement along the demand for labour&#10;D) A decrease in demand for the product

Accepted Answer

An increase in the wage rate will lead to a movement along the demand curve for labor, as firms will demand less labor at higher wage rates, rather than shifting the entire demand curve.

Question 5

Demand for labour is likely to be more wage inelastic if:&#10;A) Labour is a large proportion of total costs.&#10;B) Firms are labour intensive.&#10;C) It is difficult to replace labour with machines.&#10;D) Demand for the product is price elastic.

Accepted Answer

When it is difficult to replace labour with machines, firms have fewer alternatives to using labour, making the demand for labour more wage inelastic.

Question 6

An increase in the wage rate may be caused by:&#10;A) An outward shift of the supply of labour&#10;B) An inward shift of the demand of labour&#10;C) An outward shift of the demand of labour&#10;D) An increase in the number of employees wanting to work in this industry

Accepted Answer

An increase in the wage rate can be caused by an outward shift of the demand for labour. This means that employers are willing to hire more workers at each wage level, which can push wages up as they compete for employees.

Question 7

An increase in the demand for labour is likely to lead to:&#10;A) A higher wage rate and a lower quantity employed&#10;B) A lower wage rate and a higher quantity employed&#10;C) A higher wage rate and a higher quantity employed&#10;D) A lower wage rate and a lower quantity employed

Accepted Answer

An increase in the demand for labour typically results in a higher wage rate because employers are willing to pay more to attract or retain workers. Additionally, the higher demand usually means that more workers are employed, hence a higher quantity employed.

Question 8

An increase in the supply of labour in an industry is likely to lead to a lower wage and a higher number of people employed.

Accepted Answer

According to basic economic principles, if the supply of labor in an industry increases (all else being equal), this typically leads to lower wages because there are more workers available than jobs. Employers have more choices and can offer lower wages. At the same time, because labor is cheaper, employers might hire more workers, leading to a higher number of people employed.

Question 9

An increase in the wage rate may increase the total earnings of employees if the demand for employees is wage inelastic.

Accepted Answer

When the demand for employees is wage inelastic, it means that the percentage decrease in the quantity of labor demanded is less than the percentage increase in wages. Therefore, even though employers may hire fewer employees, the higher wage rate can lead to an increase in total earnings for the employees who are still employed.

Question 10

Sometimes employees form organizations to represent and protect them called trade ______.

Accepted Answer

The answer of Sometimes employees form organizations to represent and...

Question 11

In the labour market, equilibrium is achieved by adjustment in the:&#10;A) price level&#10;B) wage rate&#10;C) tax rate&#10;D) exchange rate

Accepted Answer

The answer of In the labour market, equilibrium is achieved...

Question 12

Which of the following would cause a movement along the labour supply curve?&#10;A) A change in the value of benefits paid&#10;B) A change in the period of training required&#10;C) A change in the wage rate&#10;D) A change in the overall appeal of the job

Accepted Answer

The answer of Which of the following would cause a...

Question 13

As the training period to qualify for a particular job increases:&#10;A) The labour supply curve will shift to the right.&#10;B) There will be a movement upwards along the labour supply curve.&#10;C) The labour supply curve will shift to the left.&#10;D) There will be a movement downwards along the supply curve.

Accepted Answer

The answer of As the training period to qualify for...

Question 14

A reduction in benefits will:&#10;A) Increase the incentive to work and shift the labour supply curve to the right.&#10;B) Increase the incentive to work and shift the labour supply curve to the left.&#10;C) Decrease the incentive to work and shift the labour supply curve to the left.&#10;D) Decrease the incentive to work and shift the labour supply curve to the right.

Accepted Answer

The answer of A reduction in benefits will:&#10;A) Increase the...

Deck 16: The Labour Market