Question 1

FIGURE 14- 5 
-If we compare the wage rate and the level of employment achieved in a competitive labour market with those in a monopsonistic labour market,the latter will generate

Accepted Answer

In a monopsonistic labor market, the single buyer of labor (the monopsonist) has market power to set wages lower than in a competitive market, leading to both lower wages and lower employment levels compared to a competitive labor market.

Question 2

FIGURE 14- 5 
-Refer to Figure 14- 5.Suppose the labour market is competitive.If a minimum wage of W3 is then imposed,the number of unemployed workers would be

Accepted Answer

When a minimum wage of W3 is imposed, the wage rate rises from W1 to W3, causing the quantity of labour demanded to decrease from Q1 to Q2, and the quantity of labour supplied to increase from Q1 to Q4. This creates a surplus (unemployment) of workers equal to Q4 - Q2. Therefore, the correct answer is C.

Question 3

The table below shows the labour demand and labour supply schedules in a competitive labour market. $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Wage Rate } \
\text { (\$/hour) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { of Labour } \
\text { (hours/month) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { of Labour } \
\text { (hours/month) }
\end{array} \
\hline 10 & 1300 & 500 \
\hline 12 & 1000 & 1000 \
\hline 14 & 800 & 1300 \
\hline 15 & 400 & 1500 \
\hline 17 & 200 & 1800 \
\hline
\end{array}$$ TABLE 14- 1
-Refer to Table 14- 1.In a competitive labour market that clears,the equilibrium employment level would be

Accepted Answer

The equilibrium employment level occurs where the quantity of labour demanded equals the quantity of labour supplied, which is at 1000 hours/month at a wage rate of $12/hour.

Question 4

In Canada in 2011,the share of total employment in agriculture was about

Accepted Answer

In Canada in 2011, the share of total employment in agriculture was approximately 2%. This information can be found in various reports from Statistics Canada.

Question 5

The fundamental dilemma facing labour unions is

Accepted Answer

The fundamental dilemma for labor unions is balancing wage increases with employment growth. Higher wages can lead to reduced employment if employers cut jobs to manage increased labor costs.

Question 6

Certain professions limit the number of students who are eligible to enroll in their programs in university - engineering,architecture,dentistry,and law,for example.Other things being equal,what is one predicted effect of such restrictions?

Accepted Answer

Restricting the number of students in certain professions can lead to a limited supply of professionals in those fields, potentially increasing wages within those professions. Consequently, this may lead to decreased wages in the labor market outside of these professions as more individuals compete for jobs in other fields.

Question 7

Suppose there is a competitive market for retail workers at a large shopping mall that is large enough to constitute its own labour market.The labour demand curve is QD = 1000 - 20(w).The labour supply curve is QS = 400 + 40(w).Suppose that a union now successfully organizes the workers at this mall and obtains a wage rate of $11 (but does not affect the demand curve).The number of workers who wish to work at the new wage is

Accepted Answer

The labor supply curve is QS = 400 + 40(w). Plugging in the wage rate of $11, QS = 400 + 40(11) = 840.

Question 8

Labour- market discrimination,which keeps one group of workers out of elite (E)occupations and limits them to ordinary (O)occupations,will have which of the following effects?

Accepted Answer

Labour-market discrimination reduces the supply of workers in elite occupations (E), leading to higher wages due to the decreased competition for those jobs.

Question 9

The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company.
  FIGURE 14- 4
-One attempt to provide some minimum level of human capital for all citizens is a system of

Accepted Answer

The diagram shows that the logging company is the only employer in the town, and they are able to pay low wages due to the abundant supply of unskilled labor. A system of comparable worth would not address the issue of low wages, income taxation would not necessarily provide minimum levels of human capital, minimum wages may not be effective if the employer has significant bargaining power, and unionism may not be feasible in a town with only one employer. Compulsory and publicly financed education, however, can provide all citizens with basic skills and knowledge, increasing their human capital and making them more employable in a wider range of jobs. This can help to shift the demand for labor curve to the right, resulting in higher wages and better working conditions. Therefore, option E is the best choice.

Question 10

The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company.
  FIGURE 14- 4
-Suppose that a professional association strengthened the limits to entry into their profession and at the same time lengthened its required apprenticeship program.The likely effect would be that

Accepted Answer

Strengthening the limits to entry and lengthening the apprenticeship program would make it harder for individuals to enter the profession, which would lead to a decrease in the supply of labour. This would cause the supply curve to shift to the left. The demand for labour would likely remain the same, as the logging company still needs the same amount of workers to operate. Therefore, the equilibrium wage rate would increase, but the quantity of labour employed would decrease.

Question 11

Suppose there is a competitive market for retail workers at a large shopping mall that is large enough to constitute its own labour market.The labour demand curve is QD = 1000 - 20(w).The labour supply curve is QS = 400 + 40(w).Suppose that a union now successfully organizes the workers at this mall and obtains a wage rate of $13 (but does not affect the position of the demand curve).One result is

Accepted Answer

When the union successfully organizes the workers and obtains a wage rate of $13, the new labour supply curve becomes QS=$840. Substituting this into the labour demand equation gives us:

QD= 1000 - 20w = 1000 - 20(13) = 600

Therefore, the new equilibrium point is at a wage rate of $13 and an employment level of 600 workers. Since the original equilibrium employment level was 700 workers, there is now a decrease in employment of 100 workers (700 – 600 = 100), which corresponds to answer E.

Question 12

The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company.
  FIGURE 14- 4
-Refer to Figure 14- 4.The wage paid by this monopsonistic firm will be and employment will be _ .

Accepted Answer

The answer of The diagram below shows the supply and...

Question 13

Wage differentials due to cross- worker differences in human capital

Accepted Answer

Wage differentials due to cross-worker differences in human capital will persist in a competitive equilibrium because individuals with more human capital (e.g. education, skills, training) are more productive and are therefore able to command higher wages. This is a justifiable outcome on efficiency grounds as it incentivizes individuals to invest in their human capital, ultimately leading to overall economic growth.

Question 14

FIGURE 14- 5 
-Refer to Figure 14- 5.Suppose this labour market is competitive.If a minimum wage of W3 is then imposed,the quantity of labour hired would be

Accepted Answer

The answer of FIGURE 14- 5 
-Refer to Figure 14-...

Question 15

Some people are concerned that "good" manufacturing jobs are being replaced by "bad" service- sector jobs.Why is this not necessarily a problem?

Accepted Answer

All of the given options are valid reasons why the shift from manufacturing jobs to service-sector jobs is not necessarily a problem. Average real per capita income has continued to rise despite the rise of the service sector, indicating that people's economic well-being has not suffered. The decline in manufacturing employment is partly due to increasing productivity in that sector, which means that fewer workers can produce the same amount of goods. Consumers have an increased demand for services as real income increases, which is a positive sign that people are willing to spend their money on more than just material goods. Lastly, productivity increases in the service sector are likely underestimated, which means that service jobs may be more valuable and rewarding than we realize.

Question 16

The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company.
  FIGURE 14- 4
-Refer to Figure 14- 4.Compared to the outcome in a competitive labour market,the wage and employment outcome in this town's monopsonistic labour market are as follows:

Accepted Answer

In a monopsonistic labour market, the employer has bargaining power and can pay a lower wage than in a competitive labour market. In the diagram, the monopsonistic equilibrium occurs at a wage of $25 and an employment level of 500. In a competitive labour market, the equilibrium wage would be $30 and employment would be at 750. Therefore, the difference is $5 per hour in wages and 250 units of labour in employment. Therefore, the correct choice is A.

Question 17

In general,in collective bargaining between a labour union and a firm,the

Accepted Answer

In collective bargaining, the union and the firm negotiate the wage rate. However, the firm has the ultimate decision-making power regarding the level of employment. The union can negotiate for better working conditions or benefits, but ultimately the firm chooses how many workers to hire. Therefore, option D is the most accurate statement.

Question 18

The table below shows the labour demand and labour supply schedules in a competitive labour market. $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Wage Rate } \
\text { (\$/hour) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { of Labour } \
\text { (hours/month) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { of Labour } \
\text { (hours/month) }
\end{array} \
\hline 10 & 1300 & 500 \
\hline 12 & 1000 & 1000 \
\hline 14 & 800 & 1300 \
\hline 15 & 400 & 1500 \
\hline 17 & 200 & 1800 \
\hline
\end{array}$$ TABLE 14- 1
-Investment in human capital can be very costly to the individual,but it can also generate large returns.Canadian census data from 2007 show that average employment income for a university graduate is approximately of the average employment income of a worker with no more than a high school diploma.

Accepted Answer

University graduates typically earn significantly more than those with only a high school diploma, often around double, which corresponds to 200%.

Question 19

Consider a monopsonistic labour market.One hundred units of labour will be supplied if the wage rate is $12,and 101 units of labour will be supplied if the wage rate is $14.The marginal cost of the 101st worker is

Accepted Answer

The marginal cost of the 101st worker is the additional cost incurred by hiring one more worker. The total cost for 100 workers is $12 * 100 = $1200. For 101 workers, it's $14 * 101 = $1414. The marginal cost is $1414 - $1200 = $214.

Question 20

FIGURE 14- 5 
-Refer to Figure 14- 5.Suppose this labour market is competitive.If a minimum wage of W4 is then imposed,the quantity of labour supplied would be

Accepted Answer

The answer of FIGURE 14- 5 
-Refer to Figure 14-...

Quiz 14: Labour Markets

FIGURE 14- 5 -If we compare the wage rate and the level of employment achieved in a competitive labour market with those in a monopsonistic labour market,the latter will generate

FIGURE 14- 5 -Refer to Figure 14- 5.Suppose the labour market is competitive.If a minimum wage of W3 is then imposed,the number of unemployed workers would be

In Canada in 2011,the share of total employment in agriculture was about

The fundamental dilemma facing labour unions is

Certain professions limit the number of students who are eligible to enroll in their programs in university - engineering,architecture,dentistry,and law,for example.Other things being equal,what is one predicted effect of such restrictions?

Labour- market discrimination,which keeps one group of workers out of elite (E) occupations and limits them to ordinary (O) occupations,will have which of the following effects?

The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company. FIGURE 14- 4 -One attempt to provide some minimum level of human capital for all citizens is a system of

The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company. FIGURE 14- 4 -Refer to Figure 14- 4.The wage paid by this monopsonistic firm will be and employment will be _ .

Wage differentials due to cross- worker differences in human capital

FIGURE 14- 5 -Refer to Figure 14- 5.Suppose this labour market is competitive.If a minimum wage of W3 is then imposed,the quantity of labour hired would be

Some people are concerned that "good" manufacturing jobs are being replaced by "bad" service- sector jobs.Why is this not necessarily a problem?

In general,in collective bargaining between a labour union and a firm,the

Consider a monopsonistic labour market.One hundred units of labour will be supplied if the wage rate is $12,and 101 units of labour will be supplied if the wage rate is $14.The marginal cost of the 101st worker is

FIGURE 14- 5 -Refer to Figure 14- 5.Suppose this labour market is competitive.If a minimum wage of W4 is then imposed,the quantity of labour supplied would be