Test Bank for Labor Economics Exam
#2 9th Edition by George Borjas
Which one of the following conditions is required for allocative efficiency?
Marginal revenue product exceeds the value of marginal product by the greatest amount.
Marginal revenue product equals the wage rate.
Value of marginal product equals the marginal wage cost.
Value of marginal product is the same in all alternative
employments of a given type of labor. - ANSValue of marginal product is the same in all
alternative employments of a given type of labor.
Compared to the allocatively efficient amount, a monopsonist tends to hire
too few workers because the value of marginal product exceeds marginal revenue product.
too few workers because marginal wage cost exceeds the wage rate.
too many workers because the value of marginal product exceeds marginal revenue product.
too many workers because marginal wage cost exceeds the wage rate. - ANStoo few workers
because marginal wage cost exceeds the wage rate.
There will be a shortage of labor in a particular market if
labor supply increases and demand decreases.
the current wage is above the wage that would clear the market.
there is a decrease in the price of a substitute resource.
the current wage is below the wage that would clear the market. - ANSthe current wage is below
the wage that would clear the market.
All else equal, which of the following will increase the demand for labor in a particular market?
a decrease in the wage paid to another occupation for which these workers are qualified
, a decrease in worker productivity
an improvement in the nonwage aspects of the job
an increase in the number of employers - ANSan increase in the number of employers
Compared to a monopsonist that sells its output in a competitive product market, an otherwise
identical monopsonist with monopoly power in the product market will pay
a lower wage.
a higher wage.
the same wage.
More information is needed. - ANSa lower wage.
At the profit-maximizing level of employment for a monopsonist,
the wage exceeds the marginal wage cost.
marginal revenue product equals the wage.
the wage is less than marginal wage cost.
marginal product equals marginal revenue product. - ANSthe wage is less than marginal wage
cost.
A firm can hire 20 workers for $10 per hour, but finds it must raise the wage to $11 to attract
another worker. If it must pay all its workers the same wage, the marginal wage cost of the 21st
worker is
$10.
$11.
$21.
$31. - ANS31
If a worker's wage rate rises,
household production will shift away from goods-intensive commodities toward time-intensive
commodities.
household production will shift away from time-intensive commodities toward goods-intensive
commodities.
more leisure time will be consumed.
#2 9th Edition by George Borjas
Which one of the following conditions is required for allocative efficiency?
Marginal revenue product exceeds the value of marginal product by the greatest amount.
Marginal revenue product equals the wage rate.
Value of marginal product equals the marginal wage cost.
Value of marginal product is the same in all alternative
employments of a given type of labor. - ANSValue of marginal product is the same in all
alternative employments of a given type of labor.
Compared to the allocatively efficient amount, a monopsonist tends to hire
too few workers because the value of marginal product exceeds marginal revenue product.
too few workers because marginal wage cost exceeds the wage rate.
too many workers because the value of marginal product exceeds marginal revenue product.
too many workers because marginal wage cost exceeds the wage rate. - ANStoo few workers
because marginal wage cost exceeds the wage rate.
There will be a shortage of labor in a particular market if
labor supply increases and demand decreases.
the current wage is above the wage that would clear the market.
there is a decrease in the price of a substitute resource.
the current wage is below the wage that would clear the market. - ANSthe current wage is below
the wage that would clear the market.
All else equal, which of the following will increase the demand for labor in a particular market?
a decrease in the wage paid to another occupation for which these workers are qualified
, a decrease in worker productivity
an improvement in the nonwage aspects of the job
an increase in the number of employers - ANSan increase in the number of employers
Compared to a monopsonist that sells its output in a competitive product market, an otherwise
identical monopsonist with monopoly power in the product market will pay
a lower wage.
a higher wage.
the same wage.
More information is needed. - ANSa lower wage.
At the profit-maximizing level of employment for a monopsonist,
the wage exceeds the marginal wage cost.
marginal revenue product equals the wage.
the wage is less than marginal wage cost.
marginal product equals marginal revenue product. - ANSthe wage is less than marginal wage
cost.
A firm can hire 20 workers for $10 per hour, but finds it must raise the wage to $11 to attract
another worker. If it must pay all its workers the same wage, the marginal wage cost of the 21st
worker is
$10.
$11.
$21.
$31. - ANS31
If a worker's wage rate rises,
household production will shift away from goods-intensive commodities toward time-intensive
commodities.
household production will shift away from time-intensive commodities toward goods-intensive
commodities.
more leisure time will be consumed.
