Test Bank for Modern Labor Economics Theory and Public Policy 12th Edition Ehrenberg Smith

Topics: Supply and demand Pages: 11 (3842 words) Published: September 29, 2015
Modern Labor Economics, 12e (Ehrenberg/Smith)
Chapter 2 Overview of the Labor Market

1) The labor market does NOT
A) allocate workers to jobs.
B) coordinate employment decisions.
C) respond to price signals.
D) ensure that all workers are hired.
Answer: D
Question Status: Old

2) The labor market for mechanical engineers is
A) an internal labor market.
B) a national labor market.
C) a local labor market.
D) a monopoly labor market.
Answer: B
Question Status: New

3) The labor force is made up of
A) all members of society.
B) all members of society who are at least 16 years of age.
C) all members of society who are at least 16 years old and are either employed or unemployed. D) employed workers, unemployed workers, and retired workers. Answer: C
Question Status: Old

Table 2.1

4) Given the data in Table 2.1, the labor force participation rate is A) 54%.
B) 65%.
C) 70%.
D) 80%.
Answer: C
Question Status: Old

5) Given the data in Table 2.1, the unemployment rate is
A) 3.8%.
B) 5.0%.
C) 7.1%.
D) 7.8%.
Answer: C
Question Status: Old
6) During the twentieth century, the unemployment rate in the United States A) remained roughly constant.
B) was consistently higher than in other industrialized countries. C) generally decreased.
D) became more stable.
Answer: D
Question Status: Old

Table 2.2 Workers in the Widget Industry

7) According to Table 2.2, real earnings in the Widget Industry in 1986 were A) $22,500.
B) $12,640.
C) $11,538.
D) $15,730.
Answer: B
Question Status: Old

8) According to Table 2.2, in which year were the real earnings of workers in the Widget Industry highest? A) 1966
B) 1976
C) 1986
D) 1996
Answer: B
Question Status: Old

9) A worker's total compensation consists of
A) wages.
B) earnings.
C) earnings plus in-kind benefits.
D) earnings plus in-kind benefits plus deferred benefits.
Answer: D
Question Status: New

10) A worker's income is equal to his
A) earnings.
B) wage rate multiplied by hours worked.
C) wages plus benefits.
D) earnings plus employee benefits plus unearned income.
Answer: D
Question Status: Old
11) When wages increase, the substitution effect implies that employment will ________ and the scale effect implies that employment will ________. A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Answer: D
Question Status: Old

12) When the price of capital increases, the quantity of ________ demanded will ________, but the effect on ________ is ambiguous. A) labor; increase; capital
B) labor; decrease; capital
C) capital; increase; labor
D) capital; decrease; labor
Answer: D
Question Status: Old

13) When the price of labor falls, the quantity of ________ demanded will ________, but the effect on ________ is ambiguous. A) labor; increase; capital
B) labor; decrease; capital
C) capital; increase; labor
D) capital; decrease; labor
Answer: A
Question Status: Old

14) If the price of a product decreases due to a decrease in demand, then A) the firm moves to the left along the labor demand curve.
B) the firm moves to the right along the labor demand curve. C) the labor demand curve shifts to the left.
D) the labor demand curve shifts to the right.
Answer: C
Question Status: Old

15) Long-term unemployment rates are higher in most Western European countries than in the United States because A) unemployment rates are calculated differently in Western Europe. B) nonmarket forces keep wages in Western Europe above the equilibrium level. C) technological change has accelerated more quickly in Western Europe. D) most Western European governments hire workers to perform jobs that are not in demand. Answer: B

Question Status: Old
16) If the salaries of accountants increase and other conditions remain the same, then A) a firm will move to the left along its labor demand curve for accountants. B) a firm will move to the right...
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