Microeconomics 20 multiple choice questions

Question 5.0 Points Question 1 of 20 Which of the following is the most important reason for growing inequality in the income distribution in the United States? A. inheritances B. an increase in demand for highly educated workers C. discrimination D. a steady increase in tuition and fees for a college education Question 2 of 20 The poverty rate in the United States is highest for: 5.0 Points A. married couples. B. childless households. C. single people. D. female headed households. 5.0 Points Question 3 of 20 When wages increase the income effect ________ the supply of labor and the substitution effect ________ the supply of labor. A. increases; decreases B. decreases; increases C. decreases; decreases D. increases; increases Question 4 of 20 If Jerry’s demand for leisure increases as the wage increases: 5.0 Points A. the substitution effect dominates the income effect. B. the income effect dominates the substitution effect. C. the income effect is completely offset by the substitution effect. D. There is insufficient information. 5.0 Points Question 5 of 20 According to the income effect of labor supply if leisure is a normal good then an increase in the wage rate will ________ the quantity of labor ________. A. increase; demanded B. decrease; supplied C. decrease; demanded D. increase; supplied Question 6 of 20 When a firm hires a worker for one hour the marginal cost to that firm equals the: 5.0 Points A. average total cost of production at the quantity produced. B. diminishing marginal productivity of that worker. C. hourly wage of that worker. D. price of each item that the worker produces in that hour. 5.0 Points Question 7 of 20 A decrease in the supply of musicians ________ the number of musicians employed and ________ the wages paid to musicians. A. increases; increases B. increases; decreases C. decreases; increases D. decreases; decreases Question 8 of 20 If the price of output increases the labor ________ curve shifts to the ________. 5.0 Points A. supply; left B. demand; left C. demand; right D. supply; right Question 9 of 20 When the wage falls: 5.0 Points A. all workers will work more hours. B. all workers will work fewer hours. C. some workers will work more hours and some workers will work fewer hours but we don’t know whether average hours will increase or decrease. D. some workers will work more hours and some workers will work fewer hours but on average hours worked will fall. Question 10 of 20 According to the substitution effect of labor supply when the wage rate goes up: A. it becomes more costly to consume leisure so people will work more. B. the opportunity cost of enjoying leisure goes down. C. firms will hire more workers since people are more willing to work. 5.0 Points D. it becomes less costly to consume leisure so people will work more. Question 11 of 20 5.0 Points If the equilibrium wage is above the actual wage: A. the wage rate will rise. B. the demand for labor will increase. C. the wage rate will fall. D. the demand for labor will decrease. Question 12 of 20 The marginal revenue product of labor is the: 5.0 Points A. change in revenue resulting from adding an additional unit of labor. B. cost of additional labor necessary to produce an additional unit of output. C. change in labor necessary to produce an additional unit of output. D. change in output resulting from adding an additional unit of labor. Question 13 of 20 An equilibrium in the labor market is a situation in which: A. there is no unemployment. B. marginal revenue product equals the wage. 5.0 Points C. there is no pressure for wages to change. D. wages exceed minimum wage. 5.0 Points Question 14 of 20 If the price of output decreases the equilibrium wage of workers who produce that output will ________ and ________ workers will be hired. A. decrease; fewer B. increase; fewer C. decrease; more D. increase; more Question 15 of 20 The price of an hour of leisure time is: 5.0 Points A. the minimum wage rate. B. zero. C. the income that could have been earned in that hour. D. determined by the value of the activity the person engages in during that hour of leisure. 5.0 Points Question 16 of 20 Other things being equal as diminishing marginal returns begin to occur the marginal revenue product of labor: A. increases as more workers are used. B. remains unchanged as more workers are used. C. decreases as more workers are used. D. none of the above 5.0 Points Question 17 of 20 Government taxes and transfers: A. reduce the wealth of all Americans. B. reduce the wealth of the poorest Americans and increase the wealth of the richest Americans. C. increase the wealth of the poorest Americans and reduce the wealth of the richest Americans. D. increase the wealth of all Americans. 5.0 Points Question 18 of 20 The individual supply curve for labor is the relationship between the wage and the quantity of labor that: A. all workers are willing to provide. B. any given worker is willing to provide. C. any given firm is willing to employ. D. all firms are willing to employ. Question 19 of 20 Labor costs account for approximately ________ of total production costs. 5.0 Points A. one-fourth B. three-fourths C. one-third D. half 5.0 Points Question 20 of 20 A government report that makes working in a particular industry more attractive to workers will most likely ________ the number of workers hired in that industry and ________ the wage paid to those workers. A. increase; decrease B. decrease; increase C. decrease; decrease D. increase; increase

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