Chapter 1
1: Economists assert that workers
a. try to be as happy as possible.
b. maximize their utility.
c. only care for their own consumption.
d. buy as many goods as possible.
e. both A and B
2: Labor economists generally assume that firms maximize
a. market share.
b. the number of employees.
c. sales.
d. Profits.
e. none of the above
3: The demand curve for labor is determined by
a. firms maximizing profits.
b. workers maximizing utility.
c. the government working in concert with workers through programs
such as job retraining and unemployment insurance that reduce the conflict
between workers and firms.
d. all of the above.
4: The supply curve for labor is determined by
a. firms maximizing profits.
b. workers maximizing utility.
c. workers maximizing their income.
d. colleges and universities maximizing how many students they
graduate. 5: The supply of labor for an industry is generally upward-
sloping because
a. workers provide more time and effort to those activities that have a higher
payoff.
b. it is profitable for firms to hire more workers when labor is cheap.
c. the government is more likely to interfere with a labor market when
wages are low than when they are high.
d. all of the above.
6: The demand for engineers
a. is downward sloping because it is profitable for firms to hire
more engineers when their wages are low.
b. is equal to the supply of engineers when the labor market is in equilibrium.
c. is likely to be lower when the government decides not to build a
supercollider.
d. all of the above.
7: The conflict of interest between workers and firms is resolved only
a. when the supply of labor equals the demand for labor.
b. when the labor market is in equilibrium.
c. through effective government mediation.
d. when firms hire all potential workers.
e. both A and B
, 8: A normative statement regarding the labor market is
a. "a minimum wage causes unemployment in the labor market."
1: Economists assert that workers
a. try to be as happy as possible.
b. maximize their utility.
c. only care for their own consumption.
d. buy as many goods as possible.
e. both A and B
2: Labor economists generally assume that firms maximize
a. market share.
b. the number of employees.
c. sales.
d. Profits.
e. none of the above
3: The demand curve for labor is determined by
a. firms maximizing profits.
b. workers maximizing utility.
c. the government working in concert with workers through programs
such as job retraining and unemployment insurance that reduce the conflict
between workers and firms.
d. all of the above.
4: The supply curve for labor is determined by
a. firms maximizing profits.
b. workers maximizing utility.
c. workers maximizing their income.
d. colleges and universities maximizing how many students they
graduate. 5: The supply of labor for an industry is generally upward-
sloping because
a. workers provide more time and effort to those activities that have a higher
payoff.
b. it is profitable for firms to hire more workers when labor is cheap.
c. the government is more likely to interfere with a labor market when
wages are low than when they are high.
d. all of the above.
6: The demand for engineers
a. is downward sloping because it is profitable for firms to hire
more engineers when their wages are low.
b. is equal to the supply of engineers when the labor market is in equilibrium.
c. is likely to be lower when the government decides not to build a
supercollider.
d. all of the above.
7: The conflict of interest between workers and firms is resolved only
a. when the supply of labor equals the demand for labor.
b. when the labor market is in equilibrium.
c. through effective government mediation.
d. when firms hire all potential workers.
e. both A and B
, 8: A normative statement regarding the labor market is
a. "a minimum wage causes unemployment in the labor market."
