Question 1

Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages of agricultural workers will ________ and employment of agricultural workers will ________.

Accepted Answer

If food prices decline then the producers of food will be less inclined to hire workers, so the demand for labor shifts left wages and employment will decrease.

Question 2

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

Accepted Answer

A slowdown in productivity gains will reduce (or even reverse)the growth in the demand for labor. Slower increases in the demand for labor will reduce the growth in real wages and a decrease in the demand for labor will reduce real wages as demand shifts left.

Question 3

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

Accepted Answer

The expanded role of women in the labor force and huge numbers in the baby-boom generation shifted labor supply out greatly. That shift put downward pressure on wage rates in the U.S.

Question 4

Holding other factors constant, if computers allow factory workers to manufacture more products per hour, then the real wages of factory workers will ________ and employment of factory workers will ________.

Accepted Answer

If workers become more productive, then producers of computers will be more inclined to hire workers so the demand for labor shifts right. Wages and employment will increase.

Question 5

Holding other factors constant, if oil prices rise relative to the prices of other products, then the real wages of oil workers will ________ and employment of oil workers will ________.

Accepted Answer

If oil prices rise, then producers of oil will be more inclined to hire workers and there will be more demand for oil workers (demand shifts right). As a result, wages and employment will increase.

Question 6

If the existence of alternative opportunities makes people become less willing to work in poultry processing plants, then the real wage of unskilled workers in poultry processing plants is predicted to ________ and the employment of unskilled workers in poultry processing plants is predicted to ________.

Accepted Answer

If the work setting becomes more favorable outside of poultry processing plants, then the supply of workers will shift left and there will be more competition for the remaining poultry processing workers, causing wages will increase and employment to decrease.

Question 7

An increase in the size of the working-age population:

Accepted Answer

When the working-age population increases, the potential labor supply increases.

Question 8

As the real wage decreases, the quantity of labor demanded ________ and the quantity of labor supplied ________.

Accepted Answer

As real wages decrease, firms desire more employees. Conversely, as real wages decrease, fewer people find it worthwhile to work or workers desire fewer hours.

Question 9

Production data for Joe's Pizza Parlor are as follows. For simplicity assume that labor is the only input. Each pizza sells for $5. $$\begin{array} { | c | c r } 
\hline \text { Number of Warkers } & \text { Pizzas Baked Per Day } \
\hline 0 & & 0 \
\hline 1 & & 10 \
\hline 2 & & 18\
\hline 3 & & 24 \
\hline 4 & & 30 \
\hline 5 & &32 \
\hline
\end{array}$$  
How many workers will Joe hire if he must pay each one $45 a day?

Accepted Answer

The answer of Production data for Joe's Pizza Parlor are...

Question 10

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 smaller capital stock in Omega causes workers to be less productive, which decreases the demand for labor and puts downward pressure on wages. With lower wages, workers desire fewer hours of work and employment decreases too.

Question 11

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 12

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

Accepted Answer

Technical progress almost always increases worker productivity, which makes workers more desirable to employers. The demand for labor will shift right and therefore puts upward pressure on wages and increase employment too.

Question 13

Long-term increases in productivity that have increased the demand for labor, and raised real wages, have resulted primarily from ________ and ________.

Accepted Answer

Technological progress and a modernized capital stock will increase worker efficiency, which increases the demand for labor and puts upward pressure on wages.

Question 14

Holding other factors constant, if the education and skills of the typical worker in an economy increases, then the real wages of workers will ________ and employment of workers will ________.

Accepted Answer

If worker quality increases, then more workers are desired because they are more productive. Demand for labor will shift right, increasing wages and employment.

Question 15

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 16

The minimum payment you are willing to accept to do a job is your:

Accepted Answer

The minimum payment you are willing to accept to do a job is your reservation price.

Question 17

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

Accepted Answer

Industrial countries invested heavily in human and physical capital in the twentieth century. These investments greatly increased productivity.

Question 18

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

Accepted Answer

Labor markets follow the same principles as goods and services markets: when both supply and demand rise at the same time, it is certain that quantity will increase but uncertain whether price will rise or fall. When wages rose in this case, the demand shift was greater than the supply shift.

Question 19

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

Accepted Answer

Increases in the capital stock make workers more productive, which increases the demand for labor and puts upward pressure on wages and increases employment.

Question 20

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

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 wages rise, we know the demand shift was larger than the supply shift.

Quiz 20: The Labor Market: Workers, Wages, and Unemployment

Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages of agricultural workers will and employment of agricultural workers will .

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

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

Holding other factors constant, if computers allow factory workers to manufacture more products per hour, then the real wages of factory workers will and employment of factory workers will .

Holding other factors constant, if oil prices rise relative to the prices of other products, then the real wages of oil workers will and employment of oil workers will .

If the existence of alternative opportunities makes people become less willing to work in poultry processing plants, then the real wage of unskilled workers in poultry processing plants is predicted to and the employment of unskilled workers in poultry processing plants is predicted to .

An increase in the size of the working-age population:

As the real wage decreases, the quantity of labor demanded and the quantity of labor supplied .

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 .

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

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

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

Holding other factors constant, if the education and skills of the typical worker in an economy increases, then the real wages of workers will and employment of workers will .

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.

The minimum payment you are willing to accept to do a job is your:

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

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

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

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