Question 1

The proportionality rule states that

Accepted Answer

The proportionality rule states that the optimal combination of factors occurs when the marginal physical products are proportional to factor prices, ensuring cost minimization in production.

Question 2

The substitution effect

Accepted Answer

The substitution effect represents a movement along a given isoquant when relative factor prices change, as firms substitute one factor for another while maintaining the same level of output.

Question 3

Manning

Accepted Answer

In a steady state, the number of employees leaving an organization (separations) must be equal to the number of new employees entering the organization (recruits). This maintains a constant employment level and ensures that the organization does not grow or decrease in size. Choices B, C, and D do not apply to the concept of steady state in this context.

Question 4

The Marshallian rules of derived demand

Accepted Answer

The answer of The Marshallian rules of derived demand
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Question 5

Employers may prefer a standard workweek plus overtime at a premium wage rate to a fixed hourly rate producing the same wage costs because

Accepted Answer

Offering overtime at a premium wage rate can serve as an incentive for employees to work longer hours, which may benefit the employer in terms of productivity or meeting deadlines. Additionally, employers may only need to pay overtime wages when they have a specific workload, rather than having fixed hourly rates regardless of workload. This can save the employer money in times of decreased demand or economic downturns. While trade unions may support such arrangements, it is not the primary reason why an employer may prefer it.

Question 6

Capital utilisation will increase if

Accepted Answer

The answer of Capital utilisation will increase if
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Question 7

Walter Oi regarded labour as a quasi fixed factor because

Accepted Answer

The answer of Walter Oi regarded labour as a quasi...

Question 8

Labour hoarding

Accepted Answer

Labour hoarding is a situation where employers retain excess workers, even during times of decreased demand, rather than laying them off. This can be a natural response to a downturn in demand, as firms may want to maintain a sense of stability and retain skilled workers for when demand recovers. It can result in a sub-optimal use of labour, but it is not necessarily caused by an increase in productivity or technological change.

Question 9

The reservation wage is

Accepted Answer

The reservation wage is the lowest wage that is acceptable to a worker given his or her circumstances. This can include factors such as education level, experience, family situation, and financial needs. If an offered wage is below a worker's reservation wage, he or she may choose to continue searching for a higher-paying job.

Question 10

The matching function

Accepted Answer

The matching function relates the number of workers hired to the unemployment/vacancy ratio, indicating how quickly vacancies are being filled in relation to the available labor pool.

Question 11

The optimal stopping rule in job search suggests that

Accepted Answer

The optimal stopping rule in job search suggests that individuals should continue to search until the expected marginal benefits from continued search equal the expected marginal costs from further search. This means that individuals should keep searching until the cost of searching (time, effort, etc.) is not worth the potential benefit of finding a better job offer. It is not a fixed number of firms or a specific wage offer that determines the end of job search.

Question 12

Regional migration only takes place

Accepted Answer

The answer of Regional migration only takes place
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Question 13

International migration studies suggest

Accepted Answer

Migrants are often a self-selected group, meaning those who choose to migrate may have certain characteristics, such as higher motivation or ambition, that differentiate them from those who choose to stay in their home countries. This selection bias is a well-documented phenomenon in migration studies.

Quiz 4: The Demand for Labour; Changing Jobs: The Economics of Job Search