Question 1

If the number of employees who quit,are fired,or retire increases while the hiring of new employees declines,this indicates that the

Accepted Answer

An increase in employees quitting, being fired, or retiring while hiring declines indicates that there is less demand for labor, therefore the labor demand curve is shifting to the left.

Question 2

If the demand for labor is unchanged,population growth will increase the supply of labor and increase the equilibrium wage.

Accepted Answer

If the demand for labor is unchanged, an increase in the supply of labor due to population growth will lead to an excess supply of labor, causing a decrease in the equilibrium wage.

Question 3

Compared to high school graduates,what is likely to happen to employment and wages for college graduates during a recession?

Accepted Answer

The answer of Compared to high school graduates,what is likely...

Question 4

If the labor demand curve shifts to the left and the labor supply curve remains unchanged,what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.

Accepted Answer

The answer of If the labor demand curve shifts to...

Question 5

The success of Walt Disney's animated film The Lion King in 1994 increased production of animated films,increasing the demand for animators much faster than the supply of animators was increasing.As a result,in the market for animators,the equilibrium wage fell and the equilibrium quantity increased.

Accepted Answer

An increase in demand for animators would typically result in an increase in equilibrium wage and quantity, not a decrease in wage. This is because the increase in demand would lead to firms offering higher wages to attract more animators, which would in turn increase the quantity of animators supplied.

Question 6

Consider the market for blackjack dealers in Las Vegas.In each of the following cases,explain what happens to the equilibrium wage rate and the quantity of blackjack dealers hired.
a.Three new large resort casinos open in Las Vegas.
b.Fewer students are attending classes to learn to become blackjack dealers.
c.Traditionally,blackjack dealing is a field that attracts foreign workers.However,changes in immigration laws have made it more difficult for foreign workers to come to Las Vegas to obtain jobs.The demand for blackjack dealers,however,does not change.
d.Advances in technology have increased the popularity of electronic blackjack machines and decreased the popularity of live table games which require the use of a dealer.

Accepted Answer

The answer of Consider the market for blackjack dealers in...

Question 7

Some superstar athletes in the sports industry earn very high levels of income relative to other occupations,and over time the wage differential has been increasing.What could have caused this?

Accepted Answer

The increase in technological advances such as cable television has greatly increased the demand for sports entertainment, leading to more revenue being generated in the sports industry. This increased revenue can be attributed to the high income levels earned by superstar athletes who are key contributors to the entertainment value of sports.

Question 8

If the labor demand curve shifts to the right and the labor supply curve remains unchanged,what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.

Accepted Answer

The answer of If the labor demand curve shifts to...

Question 9

Painters who paint water towers earn higher wages relative to painters who paint houses because

Accepted Answer

The answer of Painters who paint water towers earn higher...

Question 10

If the labor supply curve shifts to the left and the labor demand curve remains unchanged,what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.

Accepted Answer

The answer of If the labor supply curve shifts to...

Question 11

During recessions,economics majors earn about 35 percent more than the typical college graduate.

Accepted Answer

According to a 2011 study by the National Bureau of Economic Research, economics majors earn about 35 percent more than the typical college graduate during recessions.

Question 12

According to the U.S.Bureau of Labor Statistics,between 2000 and 2005,real wages in concrete work fell by 16.5%,despite a soaring demand for workers.This implies that the supply of workers in this field increased faster than the demand for workers.

Accepted Answer

The statement is true. The decrease in real wages despite a growing demand for workers implies an increase in the supply of workers in concrete work, leading to a decrease in wages.

Question 13

If the labor supply curve shifts to the right and the labor demand curve remains unchanged,what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.

Accepted Answer

The answer of If the labor supply curve shifts to...

Question 14

Wage differentials between occupations can be explained by all of the following except

Accepted Answer

While wage differentials between occupations can be explained by factors like differences in required human capital, desirability, and demand and supply, the market power of different employers is not a significant factor in determining wages in the absence of other competitive forces.

Question 15

All else equal,a decrease in the supply of labor will shift the labor supply curve to the left and decrease the equilibrium wage.

Accepted Answer

The answer of All else equal,a decrease in the supply...

Question 16

Which of the following explains why talented major league baseball players command much higher salaries than neurosurgeons?

Accepted Answer

The reason talented major league baseball players command much higher salaries than neurosurgeons is because the supply of talented major league baseball players is low relative to its demand compared to the supply of neurosurgeons. This means that adding another player yields far greater marginal benefit than adding another neurosurgeon.

Question 17

Compensating differentials are

Accepted Answer

Compensating differentials refer to the extra pay or benefits provided to workers to compensate for the unpleasant, undesirable or risky aspects of a job. For example, a worker may receive higher pay for working in dangerous or uncomfortable conditions, or may receive extra vacation time for working on holidays. Choice A refers to fringe benefits, which are not considered compensating differentials. Choice B refers to the concept of a buyer's market for labor, where there is an excess supply of workers leading to lower wages, and is not related to compensating differentials. Choice D refers to pay based on experience, which is not necessarily considered a compensating differential.

Question 18

Consider the market for nurses in a given city.In each of the following cases,explain what happens to the equilibrium wage rate and the quantity of nurses hired.
a.One of the major hospitals in the city closes.
b.A record number of students graduate with bachelor's degrees in nursing.
c.Traditionally,nursing is a field that attracts women.However,changes in access to education and to the labor force participation rate by women have led to a greater demand for the services of women in a wide range of occupations.The demand for nurses,however,does not change.
d.Advances in medical technology reduce the amount of time physicians must spend with patients in intensive care and increase the time that nurses spend with patients.

Accepted Answer

The answer of Consider the market for nurses in a...

Question 19

A study by Price Fishback and Shawn Kantor of the University of Arizona shows that after the passage of workers' compensation laws,wages received by workers in the coal and lumber industries fell. Source: Price V.Fishback and Shawn Everett Kantor,"Did Workers Pay for the Passage of Workers' Compensation Laws?" Quarterly Journal of Economics,Vol.100,No.3,August 1995,pp.713-742.
Which of the following could explain why passage of workers' compensation laws led to a fall in wages in some industries?

Accepted Answer

Option B is the best choice as it suggests that employers in hazardous industries reduced compensating differentials, which are additional payments made to workers to compensate them for the risks involved in their jobs. With the workers' compensation laws in place, these payments were no longer necessary, and as a result, wages fell. Option A is incorrect because the laws did not necessarily make it more expensive for firms to employ workers, and it would depend on the specifics of the law. Option C is also incorrect because although employers may have had to purchase insurance, this cost would not necessarily translate into lower wages for workers. Option D is incorrect because it assumes that the supply of labor increased, but the passage of workers' compensation laws would not necessarily make jobs in hazardous industries less risky.

Question 20

Since Poland joined the European Union in 2004,many young and educated Poles have emigrated to the United Kingdom.As a result,the labor supply curve in the United Kingdom shifts to the right and the equilibrium wage rises.

Accepted Answer

The answer of Since Poland joined the European Union in...

Quiz 17: The Markets for Labor and Other Factors of Production