Question 1

Scenario 18-5
Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada.
-Refer to Scenario 18-5.In the labor market in the northern United States,the equilibrium wage

Accepted Answer

With workers emigrating to southern Canada, the supply of labor in the northern United States decreases. This will lead to a rise in the equilibrium wage, as employers will have to offer higher wages to attract workers. However, the decrease in the supply of labor will also lead to a fall in the equilibrium quantity of labor, as there are now fewer workers available to be hired.

Question 2

Consider the market for university economics professors.Suppose the opportunity cost of going to graduate school to get a Ph.D.in economics decreases for many individuals.Suppose it generally takes about five years to get a Ph.D.in economics.Holding all else constant,in five years the equilibrium wage for university economics professors will

Accepted Answer

If the opportunity cost of going to graduate school decreases, more individuals will likely choose to pursue a Ph.D. in economics. This will increase the supply of potential university economics professors in the market. With more supply and holding all else constant, the equilibrium wage for university economics professors will decrease.

Question 3

Scenario 18-4
In 1997, Albania experienced a civil war. The civil unrest sent thousands of refugees across the Adriatic Sea to Italy where they sought relief from the fighting.
-Refer to Scenario 18-4.The Italian government started to patrol the Adriatic Sea and had a policy of returning all refugees to Albania.This policy would contribute to

Accepted Answer

The answer of Scenario 18-4
In 1997, Albania experienced a civil...

Question 4

Scenario 18-5
Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada.
-Refer to Scenario 18-5.In the labor market in southern Canada,the equilibrium wage

Accepted Answer

The answer of Scenario 18-5
Suppose that workers from northern Minnesota,...

Question 5

Figure 18-7
 
-Refer to Figure 18-7.Assume W₁ = $20 and W₂ = $18,and the market is always in equilibrium.A shift of the labor supply curve from S₁ to S₂ would

Accepted Answer

A shift of the labor supply curve from S₁ to S₂ would decrease the wage rate from W₁ to W₂, which would in turn decrease the value of the marginal product of labor by the amount of the wage cut, which is $2 in this case. Therefore, the correct answer is B.

Question 6

When a labor market experiences a surplus of labor,there is downward pressure on

Accepted Answer

When there is a surplus of labor (more people looking for jobs than available jobs), employers have more bargaining power and can offer lower wages. This downward pressure on wages is the result of the excess supply of labor.

Question 7

Figure 18-7
 
-Refer to Figure 18-7.When the relevant labor supply curve is S₁,and the labor market is in equilibrium,the

Accepted Answer

When the labor supply curve is S₁, the equilibrium wage is W1, which is the intersection point of the labor demand curve and labor supply curve. At this wage rate, the opportunity cost of leisure to workers is W1, meaning they are willing to forego leisure time in exchange for earning W1 in the labor market. Additionally, the value of the marginal product of labor to firms is also W1 since they are willing to pay that wage to attract workers who produce that much value for the firm. Therefore, all of the above statements are correct.

Question 8

When labor supply increases,

Accepted Answer

When the labor supply increases, the additional supply of workers tends to decrease the wage rate, assuming the demand for labor is downward sloping. This is because, with more workers available, employers can choose from a larger pool of candidates, reducing the need to offer higher wages to attract or retain employees.

Question 9

Figure 18-7
 
-Refer to Figure 18-7.Which of the following would shift the labor supply curve from S₁ to S₂?

Accepted Answer

A change in workers' attitudes towards the work-leisure tradeoff would cause a shift in the labor supply curve, as it would affect the number of hours workers are willing to work at each wage rate. Technological progress and changes in the price of the firm's output would affect labor demand and shift the labor demand curve, not the labor supply curve. An increase in the price of the firm's output would increase the demand for labor, leading to a movement along the labor supply curve rather than a shift.

Question 10

Suppose that the market for labor is initially in equilibrium.An increase in immigration will cause the equilibrium wage

Accepted Answer

An increase in immigration increases the supply of labor. According to basic economic principles, an increase in supply, with demand remaining constant, leads to a decrease in price (wage, in this case) and an increase in the quantity consumed (quantity of labor employed, in this case).

Question 11

Figure 18-7
 
-Refer to Figure 18-7.Which of the following would shift the labor supply curve from S₁ to S₂?

Accepted Answer

All of the options provided can cause the labor supply curve to shift from S₁ to S₂. A change in workers' attitudes can affect their willingness to work, decreases in wages in other markets can make this market more attractive, and immigration increases the number of available workers.

Question 12

Suppose that the market for labor is initially in equilibrium.Suppose that workers' tastes change so that they choose to retire at age 55 rather than age 67.Then the equilibrium wage

Accepted Answer

With workers retiring at age 55, there will be a decrease in the supply of labor. As a result, the equilibrium wage will rise due to the shortage of labor. However, the equilibrium quantity of labor will fall as fewer workers participate in the labor market. Hence, the correct option is C.

Question 13

Scenario 18-4
In 1997, Albania experienced a civil war. The civil unrest sent thousands of refugees across the Adriatic Sea to Italy where they sought relief from the fighting.
-Refer to Scenario 18-4.The Albanian civil war probably affected Italian labor markets by causing

Accepted Answer

The answer of Scenario 18-4
In 1997, Albania experienced a civil...

Question 14

Figure 18-7
 
-Refer to Figure 18-7.If the relevant labor supply curve is S₂ and the current wage is W₁,

Accepted Answer

If the labor supply curve is S₂ and the current wage is W₁, the wage is above the equilibrium level, leading to a surplus of labor.

Question 15

Consider the market for medical doctors.Suppose the opportunity cost of going to medical school decreases for many individuals.Suppose it generally takes about ten years to become a practicing doctor.Holding all else constant,in ten years the equilibrium wage for doctors will

Accepted Answer

If the opportunity cost of going to medical school decreases for many individuals, more people are likely to pursue this career path. This increase in the supply of doctors will shift the supply curve to the right, causing a decrease in the equilibrium wage. Therefore, in ten years, the equilibrium wage for doctors will decrease.

Question 16

Consider the market for medical doctors.Suppose the opportunity cost of going to medical school decreases for many individuals.Suppose it generally takes about ten years to become a practicing doctor.Holding all else constant,in ten years the equilibrium quantity of doctors will

Accepted Answer

If the opportunity cost of going to medical school decreases, more individuals will choose to pursue a career in medicine, leading to an increase in the supply of doctors in the long run. As a result, the equilibrium quantity of doctors is likely to increase.

Question 17

Suppose that workers immigrate to Minnesota from Canada.Which of the following correctly describes what would happen in the market for labor in Minnesota?

Accepted Answer

An increase in the supply of labor (due to immigration) would lead to a decrease in the equilibrium wage because of the higher availability of workers. The quantity of labor would increase because more workers are available for employment. The added output from an extra worker is smaller due to the law of diminishing returns.

Question 18

Consider the market for university economics professors.Suppose the opportunity cost of going to graduate school to get a Ph.D.in economics decreases for many individuals.Suppose it generally takes about five years to get a Ph.D.in economics.Holding all else constant,in five years the equilibrium quantity of university economics professors will

Accepted Answer

If the opportunity cost of getting a Ph.D. in economics decreases, more individuals are likely to choose to pursue a career as a university economics professor. This will shift the supply curve to the right, leading to an increase in the equilibrium quantity of university economics professors in the market.

Question 19

An increase in the supply of labor has the effect of decreasing the

Accepted Answer

The answer of An increase in the supply of labor...

Question 20

Consider the labor market for short-order cooks.An increase in immigration will cause

Accepted Answer

An increase in immigration will increase the supply of labor in the short-order cook market, shifting the supply curve to the right. This will cause the equilibrium wages to decrease and the equilibrium employment to increase.

Quiz 18: The Market For the Factors of Production.

Scenario 18-5 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. -Refer to Scenario 18-5.In the labor market in the northern United States,the equilibrium wage

Scenario 18-5 Suppose that workers from northern Minnesota, North Dakota, and Montana decide to emigrate to southern Canada. -Refer to Scenario 18-5.In the labor market in southern Canada,the equilibrium wage

Figure 18-7 -Refer to Figure 18-7.Assume W₁ = $20 and W₂ = $18,and the market is always in equilibrium.A shift of the labor supply curve from S₁ to S₂ would