Chapter 29 - Labor Markets and Wage Rates

1		Statement I. Virtually all workers are members of noncompeting groups in the labor market. Statement II. The dividing line in the dual labor market is the possession of a college degree.
			A)	Statement I is true and statement II is false.
			B)	Statement II is true and statement I is false.
			C)	Both statements are true.
			D)	Both statements are false.
2		Most jobs today are in the
			A)	primary labor market.
			B)	secondary labor market.
			C)	manufacturing sector.
			D)	retail sector.
3		The backward-bending labor supply curve is applicable
			A)	only to specific jobs.
			B)	only to the general labor market.
			C)	to both specific jobs and to the general labor market.
			D)	to neither specific jobs nor to the general labor market.
4		As a person's pay rises, the hours she is willing to work will rise. But after a certain point, she will cut back on her hours. When that point has been passed,
			A)	the substitution effect overcomes the income effect.
			B)	the income effect overcomes the substitution effect.
			C)	the income effect is added on to the substitution effect.
5		The marginal revenue product schedule for labor is
			A)	the demand schedule for labor.
			B)	the supply schedule for labor.
			C)	the demand and supply schedule for labor.
			D)	neither the demand or supply schedule for labor.
6		In general, harder, more unpleasant, or less convenient work is
			A)	usually somewhat better paid than the more conventional occupations.
			B)	usually somewhat less well paid than the more conventional occupations.
			C)	is paid virtually the same as the more conventional occupations.
7		If you were to earn $200,000, but would have been willing to do the same job for $50,000, you are earning _______ in economic rent.
			A)	$50,000
			B)	$100,000
			C)	$150,000
			D)	$200,000
8		There is ________________ relationship between real wages and productivity.
			A)	no
			B)	a very loose
			C)	fairly strong
			D)	very strong
9		Statement I. Hour wages in the United States are the highest in the world. Statement II. Hourly wages in the United States are more than seven times those in Mexico.
			A)	Statement I is true and statement II is false.
			B)	Statement II is true and statement I is false.
			C)	Both statements are true.
			D)	Both statements are false.
10		If your money wages doubled and the consumer price index doubled, your real wages would have
			A)	doubled.
			B)	risen by 50 percent.
			C)	stayed the same.
			D)	fallen by 50 percent.
11		Statement I. Real wages today are lower than they were in the late 1970s. Statement II. Money wages today are substantially higher than they were in 1990.
			A)	Statement I is true and statement II is false.
			B)	Statement II is true and statement I is false.
			C)	Both statements are true.
			D)	Both statements are false.
12		Which is the most accurate statement?
			A)	The 1996-97 increase in the minimum wage rate cost Americans several million jobs.
			B)	The minimum hourly wage is now $5.15.
			C)	The minimum hourly wage is raised each year to keep pace with inflation.
			D)	When the minimum hourly wage was raised in 1996-97, the unemployment rate rose.
13		Statement I. There is a greater difference between the earnings of high school dropouts and high school graduates than there is between high school graduates and college graduates. Statement II. The United States has the highest minimum hourly wage in the world.
			A)	Statement I is true and statement II is false.
			B)	Statement II is true and statement I is false.
			C)	Both statements are true.
			D)	Both statements are false.
14		An increase in the minimum wage will cost the most jobs if the MRP for labor is
			A)	very elastic.
			B)	slightly elastic.
			C)	unit elastic.
			D)	slightly inelastic.
			E)	very inelastic.