Question 1

Immigration is when:

Accepted Answer

Immigration specifically refers to foreign persons entering another country.

Question 2

Migration is when:

Accepted Answer

Migration refers to the movement of people from one place to another. While it may involve crossing international borders, it also includes movement within one's own country, as in the case of citizens moving to a different region or city. Therefore, option D, citizens moving within their own country, is the best answer.

Question 3

Labor supply is the relationship between __________.

Accepted Answer

Labor supply is the relationship between the wages of workers and their willingness to work. In other words, it examines how many hours someone is willing to work at a certain wage rate.

Question 4

Refer to the accompanying graphs to answer the questions.
Graph A  Graph B  Graph C  Graph D  Graph E 
-Choose the graph that reflects this scenario: Sallie decides that she values income much more strongly because she uses the money to buy goods she can enjoy more than free time.

Accepted Answer

Graph A shows a higher wage rate for work hours, indicating that Sallie values income more than free time.

Question 5

When their wages rise, Bob works more and Lisa works less. We can infer that Bob values income _________ than Lisa.

Accepted Answer

If Bob is willing to work more hours as his wage increases, it shows that he values income more than Lisa, who chooses to work less as her wages increase.

Question 6

The accompanying table shows the supply and demand schedules for workers in the country of Hovian. The supply schedule indicates that the labor supply curve is: $\begin{array}{ccc}\text { Wage } & \begin{array}{l}
\text { Quantity of } \
\text { Woukers Demanded }
\end{array} & \begin{array}{l}
\text { Quantity of } \
\text { Workers Supplied }
\end{array} \
\$ 10 & 150 & 75 \
\$ 20 & 100 & 100 \
\$ 30 & 75 & 125 \
\$ 40 & 60 & 135 \
\$ 50 & 40 & 125
\end{array}$

Accepted Answer

The labor supply curve is backward bending because as the wage increases from $40 to $50, the quantity of workers supplied decreases from 135 to 125.

Question 7

The income effect describes the:

Accepted Answer

The income effect describes the change in the quantity demanded of a good or service when a change in income occurs. In the case of labor supply, the income effect suggests that as wages rise, individuals may choose to work less because they can maintain the same level of income with fewer working hours. Therefore, the best choice is E - incentive to work less when the wage rises.

Question 8

The backward-bending labor supply curve has its shape because, at:

Accepted Answer

The backward-bending labor supply curve has its shape because at low wages, the substitution effect dominates the income effect, but the reverse occurs at high wages. This means that at low wages, individuals work more as wages increase because they need the additional income, but at high wages, individuals work less as wages increase because they have a higher opportunity cost of leisure. Therefore, the labor supply curve bends backward as it crosses the vertical axis.

Question 9

Refer to the accompanying graphs to answer the questions.
Graph A  Graph B  Graph C  Graph D  Graph E 
-Which graph shows a person who has a fixed quantity of hours that she is willing to work per week?

Accepted Answer

The answer of Refer to the accompanying graphs to answer...

Question 10

Refer to the accompanying graphs to answer the questions.
Graph A  Graph B  Graph C  Graph D  Graph E 
-Which graph shows the income effect dominating the substitution effect of higher wages?

Accepted Answer

The answer of Refer to the accompanying graphs to answer...

Question 11

When people make more money, they sometimes take more vacation time. Based on this information, we can say that leisure is a(n):

Accepted Answer

Leisure is considered a normal good because as people's income increases, they tend to consume more of it, in this case by taking more vacation time.

Question 12

Refer to the accompanying graphs to answer the questions.
Graph A  Graph B  Graph C  Graph D  Graph E 
-Which graph shows the substitution effect dominating the income effect of higher wages?

Accepted Answer

In graph A, the labor supply increases as wages increase, showing a positively sloped labor supply curve. This suggests that the substitution effect is dominating, as individuals are substituting leisure time for work due to the higher wages, resulting in an increase in labor supply. In contrast, a negatively sloped labor supply curve (as seen in graphs B, C, D, and E) would suggest that the income effect is dominating, as individuals are valuing the increased income more than their leisure time and are therefore working more.

Question 13

When the opportunity cost of leisure is high, people tend to work _________ hours. When it is low, people tend to work _________ hours.

Accepted Answer

When the opportunity cost of leisure is high, people will choose to work more hours in order to earn more income to make up for the high cost of leisure. On the other hand, when the opportunity cost of leisure is low, people can afford to work fewer hours without sacrificing much leisure time, so they tend to work fewer hours.

Question 14

When Josh's wage rises and he decides to work more hours, we know that the _________ effect has dominated the _________ effect.

Accepted Answer

When Josh's wage rises and he decides to work more hours, the substitution effect has dominated the income effect. The substitution effect suggests that as wages increase, the opportunity cost of leisure becomes higher, leading individuals to substitute leisure for more work.

Question 15

Rose travels back in time to deposit $100 in a high-interest-bearing savings account. When she returns to the present, she is a billionaire. We can expect Rose to work ________ hours because of the _________ effect.

Accepted Answer

Rose is likely to work fewer hours due to the income effect, as her wealth has increased significantly, reducing her need to work for income.

Question 16

The backward-bending labor supply curve occurs because workers value leisure:

Accepted Answer

The backward-bending labor supply curve occurs because as wages increase, workers may choose to work less in order to have more leisure time. This means they value leisure time more than they value the additional income earned from working more hours. However, as wages continue to increase, workers may eventually value the increased income more than they value the additional leisure time, causing them to work more hours again. This results in a labor supply curve that bends backwards at some point, indicating that higher wages may not always lead to more hours worked.

Question 17

If you know that the substitution effect dominates the income effect when Joe's wage rises, you can tell that his labor supply curve is:

Accepted Answer

If the substitution effect dominates, it means that the increase in wage makes working more attractive relative to leisure. Therefore, Joe would tend to substitute leisure for work, leading to an increase in labor supply. This is consistent with an upward-sloping labor supply curve.

Question 18

No matter how high his wage rises, Johann will always work more. His labor supply curve is:

Accepted Answer

The fact that Johann will always work more no matter how high his wage rises indicates that his labor supply is upward-sloping. This means that as the wage rate increases, Johann will be willing and able to supply more hours of work, ceteris paribus. However, this relationship is not perfectly elastic, as Johann's labor supply also depends on other factors such as his preferences, skills, and non-wage income. Therefore, the curve is upward sloping rather than perfect inelastic (vertical).

Question 19

Beth is deciding whether to pick up more hours at work or to take a vacation. This decision best describes:

Accepted Answer

Beth is faced with a trade-off between working more hours and taking time off for leisure activities (vacation). By choosing to work more hours, Beth is giving up the leisure activities that she could have enjoyed during that time. This decision is an example of the labor-leisure trade-off, which is a basic concept in economics.

Question 20

When Jane earns more income but still works less, leisure is a _________ good for Jane.

Accepted Answer

The answer of When Jane earns more income but still...

Quiz 14: The Demand and Supply of Resources

Immigration is when:

Migration is when:

Labor supply is the relationship between __________.

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Choose the graph that reflects this scenario: Sallie decides that she values income much more strongly because she uses the money to buy goods she can enjoy more than free time.

When their wages rise, Bob works more and Lisa works less. We can infer that Bob values income _________ than Lisa.

The income effect describes the:

The backward-bending labor supply curve has its shape because, at:

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Which graph shows a person who has a fixed quantity of hours that she is willing to work per week?

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Which graph shows the income effect dominating the substitution effect of higher wages?

When people make more money, they sometimes take more vacation time. Based on this information, we can say that leisure is a(n) :

Refer to the accompanying graphs to answer the questions. Graph A Graph B Graph C Graph D Graph E -Which graph shows the substitution effect dominating the income effect of higher wages?

When the opportunity cost of leisure is high, people tend to work _ hours. When it is low, people tend to work _ hours.

When Josh's wage rises and he decides to work more hours, we know that the _ effect has dominated the _ effect.

Rose travels back in time to deposit $100 in a high-interest-bearing savings account. When she returns to the present, she is a billionaire. We can expect Rose to work hours because of the _ effect.

The backward-bending labor supply curve occurs because workers value leisure:

If you know that the substitution effect dominates the income effect when Joe's wage rises, you can tell that his labor supply curve is:

No matter how high his wage rises, Johann will always work more. His labor supply curve is:

Beth is deciding whether to pick up more hours at work or to take a vacation. This decision best describes:

When Jane earns more income but still works less, leisure is a _________ good for Jane.