Question 1

If immigrant workers are complementary to native workers, then

Accepted Answer

A)  native workers will be better off with open borders.
B)  immigrant workers will receive a higher wage than native workers.
C)  immigration will shift the demand for native labor to the left.
D)  there will be no immigration surplus.
E)  each firm will hire only immigrants or only natives but not a mixture of the two.F) B) and E)
G) A) and E)

Question 2

Which of the following statements regarding immigration is true?

Accepted Answer

A)  For each employed immigrant there is an unemployed native worker.
B)  Immigration always results in lower native wages.
C)  All immigrants are low-skilled.
D)  Firms do not receive a substantial immigrant surplus.
E)  Consumers benefit from immigration via lower prices.F) C) and D)
G) All of the above E

Question 3

If a firm operates in a competitive labor market and in a non-competitive output market, then the firm faces

Accepted Answer

A)  a constant wage rate when hiring more labor and a constant price when selling more of its output.
B)  an increasing wage rate when hiring more labor but a constant price when selling more of its output.
C)  a constant wage rate when hiring more labor but a decreasing price when selling more of its output.
D)  an increasing wage rate when hiring more labor but a decreasing price when selling more of its output good.
E)  a decreasing wage rate when hiring more labor but a decreasing price when selling more of its output good.F) All of the above
G) D) and E)

Question 4

Supposing that immigrant labor is complementary to native labor in the production process, a more open immigration policy will likely result in all but which of the following?

Accepted Answer

A)  Firms will value native labor more highly.
B)  The labor demand curve for native workers shifts out.
C)  Lower wages paid to native workers.
D)  Overall economic efficiency increases.
E)  Overall native employment increases.F) C) and D)
G) D) and E)

Question 5

A monopsonist is

Accepted Answer

A)  a firm with partial control over an industry.
B)  a firm operating in a regulated industry.
C)  a firm that is the single purchaser of a factor of production.
D)  a firm that competes for labor but sells its output in a non-competitive market.
E)  a group of firms, much like a cartel, that restricts the demand for labor in a market.F) A) and E)
G) A) and D)

Question 6

Suppose a law firm negotiates a very low price for each of its 1,000 employees to be members at the athletic club that is located next to the law firm.Which of the following is not likely to be true?

Accepted Answer

A)  The law firm can pay its workers less than a comparable law firm that does not offer the gym benefit.
B)  The firm can likely negotiate a lower per person price at the gym than each employee could negotiate alone.
C)  Some employees will take advantage of the gym benefit, while others will not.
D)  In the long run, the law firm will probably attract workers who value the gym benefit the most.
E)  If the typical individual gym membership costs $50 per month, the law firm should expect to save $50,000 per month in wages.F) A) and E)
G) B) and D)

Question 7

If native workers and immigrants are substitutes, then

Accepted Answer

A)  native workers will be better off with open borders.
B)  native workers will encourage immigration.
C)  native firms will discourage immigration.
D)  immigrant workers will receive a higher wage than native workers.
E)  immigration will shift the labor supply curve to the right.F) D) and E)
G) B) and C)

Question 8

Which is the distinguishing feature of the standard cobweb model?

Accepted Answer

A)  The firm is a perfectly discriminating monopsonist.
B)  Wages and employment levels adjust slowly over time.
C)  Payroll taxes create a tax wedge, which in turn increases overall employment levels.
D)  Real wages steadily increase.
E)  Capital is not fixed in the short run.F) C) and D)
G) None of the above

Question 9

If labor supply of unskilled workers is perfectly inelastic, then

Accepted Answer

A)  firms face an increasing marginal cost of hiring unskilled labor.
B)  firms face a horizontal value of marginal product of employment curve.
C)  the labor supply curve of unskilled workers is horizontal at the market clearing wage.
D)  the labor supply curve of unskilled workers is vertical at the total number of unskilled workers in the market.
E)  workers will supply more hours of labor to the market when wages increase.F) None of the above
G) B) and C)

Question 10

Standard economic theory suggests which of the following in terms of labor migration across states in the U.S.?

Accepted Answer

A)  Workers migrate randomly.
B)  Workers migrate at most twice per lifetime.
C)  Workers are likely to migrate from low-wage states to high-wage states.
D)  Workers are likely to migrate from high-wage states to low-wage states.
E)  Older workers are more likely to migrate than are younger workers.F) C) and D)
G) D) and E)

Question 11

Assuming a country has a constant returns to scale Cobb-Douglas production function, what effect will immigration have on native labor that has a high degree of substitutability with the immigrant labor?

Accepted Answer

A)  Immigration has no long-run effect on native wages.
B)  Immigration lowers native wages in the long run.
C)  Immigration raises the labor-capital ratio in the long run.
D)  Immigration has no short-run effect on native wages.
E)  Immigration has a negative effect on total employment in the short run.F) C) and D)
G) B) and D)

Question 12

The assumption that a firm operates in a competitive labor market means that

Accepted Answer

A)  the firm offers a real wage rate that is indexed for inflation.
B)  the firm faces an upward-sloped marginal cost of labor curve.
C)  the firm faces a downward-sloped marginal cost of labor curve.
D)  the firm faces a constant wage regardless of how much labor it employs.
E)  the firm doesn't use capital in the production process.F) B) and D)
G) A) and D)

Question 13

Which one of the following statements is true?

Accepted Answer

A)  A monopolist is necessarily a monopsonist.
B)  A monopsonist is necessarily a monopolist.
C)  A monopsonist is a perfectly discriminating monopolist.
D)  Firm surplus always exceeds worker surplus.
E)  None of the above statements are true.F) B) and D)
G) C) and D)

Question 14

When the government imposes a payroll tax on employers (and not on workers) , which of the following effects will not come about?

Accepted Answer

A)  The labor demand curve shifts down.
B)  Employment falls.
C)  Firms and workers typically both bear a portion of the tax.
D)  Real wages will remain fixed if the labor market is competitive.
E)  The costs of hiring increase.F) A) and E)
G) B) and C)

Question 15

When the government mandates that firms supply a particular benefit, it is usually the case that

Accepted Answer

A)  the cost of providing the benefit is less than the worker's value of the benefit.
B)  employment will increase.
C)  the wage will increase.
D)  the wage will decrease by more than the cost of providing the benefit.
E)  the wage will decrease by less than the cost of providing the benefit.F) A) and D)
G) B) and E)

Question 16

Which of the following does not describe a perfectly discriminating monopsonist?

Accepted Answer

A)  The firm hires different workers at different wages.
B)  The firm hires workers to the point where the labor supply curve intersects the firm's labor demand curve.
C)  The firm's marginal cost of labor equals the labor supply curve faced by the firm.
D)  The firm uses fewer hours of labor than it would if it were in a competitive market.
E)  The wage-labor outcome is efficient.F) A) and B)
G) None of the above D

Question 17

Which of the following would result in a short-run increase in the wage rate in a competitive labor market?

Accepted Answer

A)  An increase in immigration.
B)  An increase in the output price.
C)  A decrease in productivity.
D)  An increase in native labor supply.
E)  A decrease in labor demand.F) D) and E)
G) C) and D)

Question 18

If unskilled domestic labor and unskilled immigrant labor are substitutes in the production process, then a more open immigration policy will likely result in all but which of the following?

Accepted Answer

A)  The total market supply of unskilled labor shifts out.
B)  The market-clearing wage for unskilled labor decreases.
C)  Total employment of unskilled labor increases.
D)  The wage received by unskilled native workers decreases.
E)  The demand curve for unskilled labor shifts up (out) .F) D) and E)
G) C) and D)

Question 19

Which of the following does not characterize a perfectly discriminating monopsonist?

Accepted Answer

A)  The firm's marginal cost of hiring curve is the labor supply curve.
B)  The firm hires more workers than it would if it were a competitive firm.
C)  The firm chooses employment and wage levels in order to maximize profit.
D)  The firm pays each worker his or her reservation wage.
E)  The labor supply curve can be upward sloping.F) A) and B)
G) C) and E) B

Question 20

A perfectly discriminating monopsonist pays each worker his or her reservation wage.This results in

Accepted Answer

A)  the firm receiving zero profit.
B)  the firm substituting capital for labor.
C)  the firm receiving all of the surplus.
D)  the firm avoiding payroll taxes.
E)  workers being unwilling to work at the offered wage.F) A) and E)
G) B) and D)

Exam 4: Labor Market Equilibrium

If immigrant workers are complementary to native workers, then

Correct AnswerverifiedShow Answer

Which of the following statements regarding immigration is true?

Correct AnswerverifiedE

If a firm operates in a competitive labor market and in a non-competitive output market, then the firm faces

Correct AnswerverifiedShow Answer

Supposing that immigrant labor is complementary to native labor in the production process, a more open immigration policy will likely result in all but which of the following?

Correct AnswerverifiedShow Answer

A monopsonist is

Correct AnswerverifiedShow Answer

Suppose a law firm negotiates a very low price for each of its 1,000 employees to be members at the athletic club that is located next to the law firm.Which of the following is not likely to be true?

Correct AnswerverifiedShow Answer

If native workers and immigrants are substitutes, then

Correct AnswerverifiedShow Answer

Which is the distinguishing feature of the standard cobweb model?

Correct AnswerverifiedShow Answer

If labor supply of unskilled workers is perfectly inelastic, then

Correct AnswerverifiedShow Answer

Standard economic theory suggests which of the following in terms of labor migration across states in the U.S.?

Correct AnswerverifiedShow Answer

Assuming a country has a constant returns to scale Cobb-Douglas production function, what effect will immigration have on native labor that has a high degree of substitutability with the immigrant labor?

Correct AnswerverifiedShow Answer

The assumption that a firm operates in a competitive labor market means that

Correct AnswerverifiedShow Answer

Which one of the following statements is true?

Correct AnswerverifiedShow Answer

When the government imposes a payroll tax on employers (and not on workers) , which of the following effects will not come about?

Correct AnswerverifiedShow Answer

When the government mandates that firms supply a particular benefit, it is usually the case that

Correct AnswerverifiedShow Answer

Which of the following does not describe a perfectly discriminating monopsonist?

Correct AnswerverifiedD

Which of the following would result in a short-run increase in the wage rate in a competitive labor market?

Correct AnswerverifiedShow Answer

If unskilled domestic labor and unskilled immigrant labor are substitutes in the production process, then a more open immigration policy will likely result in all but which of the following?

Correct AnswerverifiedShow Answer

Which of the following does not characterize a perfectly discriminating monopsonist?

Correct AnswerverifiedB

A perfectly discriminating monopsonist pays each worker his or her reservation wage.This results in

Correct AnswerverifiedShow Answer

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E

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D

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B

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