The Labor Supply Curve Starts To Bend Backward Once The
The opportunity cost of working is the
Value of leisure time that must be given up.
The willingness to work a certain amount of time at a given wage rate is known as
Labor supply.
As more hours are worked, the marginal utility of leisure time tends to
Increase.
As an individual earns additional income, the marginal utility of income tends to Increase.
Decrease
Students who major in computer science are paid a lot more when they graduate than those who major in philosophy because
The marginal revenue product for computer science majors is more than the marginal revenue product for philosophy majors.
The labor supply curve starts to bend backward once the
Income effect exceeds the substitution effect.
If leisure activities become more attractive, there will be a
Leftward shift of the labor supply curve.
If there is an increase in the number of workers who want to work as accountants, there will be a
Rightward shift of the labor supply curve
The marginal revenue product of labor is equal to
The marginal physical product multiplied by the marginal revenue of the output.
The marginal revenue product establishes
An upper limit to the wage rate an employer is willing and able to pay.
The quantities of labor employers are willing and able to hire at alternative wages in a given time period, ceteris paribus, is the definition of labor
Demand
Because firms are willing to hire additional workers at lower wages, the market labor demand curve is
Downward sloping
Who is the largest employer in the United States?
Walmart
Public sector unions now
Represent over five times the percentage of workers in private sector unions.
The difference between craft unions and industrial unions is that industrial unions usually
Include workers in an industry, while craft unions represent workers with a particular skill.
The marginal wage is measured by
The change in total wages paid divided by the change in the quantity of labor employed.
Unions must worry about the marginal wage because it indicates the
Effect on the total wage bill of hiring additional workers.
The percentage of the labor force that belongs to a union is known as the
Unionization ratio.
When only one buyer has access to a particular labor market
A monopsony exists.
Which of the following is not true about the wage level in a bilateral monopoly?
It is determined simply by supply and demand.
Which of the following characterizes monopolistic competition?
Many firms produce a particular type of product, but each maintains some independent control over its own price.
Which of the following is not a characteristic of monopolistic competition?
Price takers.
The combined market share of the top four firms in a monopolistically competitive industry will typically be in the range of:
20 to 40 percent
Product differentiation refers to:
Features that make one product appear different from competing products in the same market.
A monopolistically competitive firm can raise its price somewhat without fear of great change in unit sales because:
Of product differentiation and brand loyalty.
Brand loyalty makes the demand curve a firm faces:
Less price elastic
Firms in a monopolistically competitive market will:
Use the profit-maximizing rule MC = MR
Which of the following is not true about advertising?
It results in efficient allocation of resources
If the profit maximizing output and price for a firm is below average variable cost, this firm is experiencing economic:
Losses and should shutdown in the short run.
If the profit maximizing output is between the average variable cost (avc) and average total cost (atc) for a monopolistically competitive firm, then this firm is:
Incurring losses but should keep producing in the short run.
Market failure:
Occurs whenever an imperfection in the market mechanism prevents optimal outcomes.
Which of the following is a form of government intervention?
Work place regulations
A natural monopoly is a desirable market structure because:
It can offer the products consumers want at the lowest possible price because of economies of scale.
An industry in which one firm can achieve economies of scale over the entire range of market supply is a:
Natural monopoly
The costs associated with the employment of more than 100,000 workers by the federal government regulatory agencies are an example of:
Administrative costs.
Regulation is appropriate if:
Market failure exists and the benefits of regulation exceed the costs.
Profit regulation for a natural monopolist:
May lead to quality deterioration.
According to the text, which of the following is a form of air pollution?
Acid rain
According to the text, which of the following is a form of water pollution?
Thermal pollution
From an economic standpoint, the pursuit of a pollution-free environment is:
Probably not in society's best interest, in view of the very high opportunity costs.
Which of the following is a measure of the value of a tree killed by pollution?
All of the above.
If higher cost production processes that control pollution are adopted, then:
All of the above.
As a general rule, if pollution costs are external, firms will produce:
Too much of a polluting good
The purpose of an emission charge is to:
Force the producer to consider the cost of pollution in their decisions.
The horizontal demand curve faced by a farmer indicates that:
The farmer has no market power.
The price elasticity of demand for food is:
Relatively inelastic.
Agricultural prices:
Have fallen relative to nonagricultural prices in the long run
Prices of farm products are:
Subject to short-term swings
Farm price-support programs most often take the form of price:
Floors which cause surpluses.
Which of the following government actions result in supply restriction?
All of the above
The US Department of Agriculture farm loan rate is:
The implicit price paid by the government for surplus crops.
Which of the following best expresses the farm problem?
It is difficult to have cheap food and keep farmers in business.
Response lags lead to:
The boom-or-bust movement of farm prices.
Ceteris paribus, the willingness and ability to work specific amounts of time at alternative wage rates in a given time period is:
Labor supply.
The opportunity cost of working is the:
Amount of leisure time that must be given up in the process
The labor supply curve first starts to bend backward above the point where the:
Income effect equals the substitution effect.
If household preferences for leisure increases, there will be a:
Leftward shift of the labor supply curve.
Students who major in computer science are paid a lot more when they graduate than those who major in philosophy because the:
Marginal revenue product for computer science majors is more than the marginal revenue product for philosophy majors.
If a chair can be sold for $20 and it takes a worker 2 hours to make a chair, the marginal revenue product of this worker is:
$10 per hour.
Marginal physical product diminishes as additional workers are hired because:
Each worker has an increasingly smaller amount of other factors with which to work.
When the government sets a minimum wage that exceeds the equilibrium wage:
All of the above.
The demand for labor is:
The quantity of labor employers are willing and able to hire at alternative wage rates.
Typical goals of a labor union in the United States include:
Higher wages, better working conditions, better benefits.
The marginal wage is the change in:
Total wages paid associated with a one-unit increase in the quantity of labor employed.
Unions must worry about the marginal wage because it indicates the:
Effect on the total wage bill of hiring additional workers
The unionization ratio represents the:
Percentage of the total labor force belonging to unions.
The current unionization rate in the United States is closest to:
12.9 percent.
Over the last 10 years in the United States private-sector unionization has ______ and public-sector unionization has ________.
Fallen; risen
A monopsony:
Is a market in which there is a single buyer.
Collective bargaining occurs:
Between buyers of labor and sellers of labor in the same market.