Multiple Choice Questions:
1. In a competitive labor market in equilibrium,
a. A firm’s MRP = MP x MR.
b. A firm’s MRP = MP x P.
c. A firm’s MRP = MRC.
d. A firm’s wage = MRC.
e. All of the preceding are true.
2. At any wage higher than the equilibrium wage, the quantity of labor supplied ________ the quantity of labor demanded, resulting in a ________ of labor.
a. Exceeds; surplus
b. Exceeds; shortage
c. Is less than; surplus
d. Is less than; shortage
3. An increase in the demand for labor can result from
a. Increases in the price of the good produced by the labor.
b. Technological improvements.
c. Improvements in labor productivity.
d. An increase in the amount of capital available for use by workers.
e. All of the preceding.
4. Which of the following results in a rightward shift of the market demand curve for labor?
a. An increase in labor productivity
b. An increase in demand for the firm’s product
c. An increase in a firm’s product price
d. All of the preceding
5. The market supply of labor resources is affected by
a. The number of hours workers are willing to work.
b. The amount of immigration allowed.
c. Changes in a nation’s working-age population.
d. All of the preceding.
6. Differences in monetary wages across jobs may result from
a. Differences in job amenities.
b. Differences in on-the-job hazards.
c. Differences in working conditions.
d. Differences in fringe benefits.
e. All of the preceding.
7. If labor unions successfully negotiate wage increases for their members,
a. The wages of nonunion workers increase as well.
b. The wages in nonunion sectors decrease.
c. Employment likely falls in the union sector.
d. Both a and c occur.
e. Both b and c occur.
8. Monopsony in a market would tend to increase an employer’s
a. Wages paid.
b. Profits earned.
c. Output produced.
d. Employment level.