Question 1

If your wage increases from $10 per hour to $15 per hour, then your

Accepted Answer

When your wage increases from $10 per hour to $15 per hour, the opportunity cost of an hour of leisure increases by $5 per hour. This is because you can now earn an additional $5 per hour by working instead of taking leisure time, hence the cost of taking leisure time has increased by $5 per hour.

Question 2

Scenario 18-3
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour.
-Refer to Scenario 18-3. During the summer months, what is Sam's opportunity cost of taking an hour off work to go hiking?

Accepted Answer

Since Sam earns $11 per hour during the summer, his opportunity cost of taking an hour off work to go hiking is also $11. This is because if he chooses to go hiking, he is giving up the chance to earn $11 during that hour. Therefore, the correct answer is option C.

Question 3

A significant slowdown in the growth of productivity persisted in the U.S. economy between

Accepted Answer

The period of significant slowdown in productivity growth in the U.S. economy was between 1973 and 1995. During this time, productivity growth averaged only 1.4% per year, compared to the 3.2% per year average between 1948 and 1973. There was a slight improvement in productivity growth from 1995 to 2004, but it has remained relatively slow since then.

Question 4

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Accepted Answer

The labor supply curve represents the trade-off people face between working and having leisure time. As the wage rate increases, individuals may be willing to work more hours to earn a higher income, but may also choose to work fewer hours in order to have more leisure time. This trade-off is represented by the upward-sloping labor supply curve.

Question 5

Fiona's hourly wage decreases from $10 to $8. Which of the following describes a consequence of the decrease in Fiona's wage?

Accepted Answer

A decrease in wage reduces the opportunity cost of leisure, potentially leading Fiona to work more or fewer hours depending on her preferences, making all options possible consequences.

Question 6

Which of the following is not correct?

Accepted Answer

The statement "Low-skilled immigration lowers the earnings of native-born workers by 10-20 percent" is not entirely accurate. While some studies have found a negative impact on low-skilled native-born workers' wages, others have found no impact or even a positive impact. The effect can also vary depending on the specific industry and location. Therefore, it is not entirely correct to make a general statement that low-skilled immigration lowers the earnings of native-born workers by a specific percentage.

Question 7

Fiona's hourly wage increases from $8 to $10. Which of the following describes a consequence of the increase in Fiona's wage?

Accepted Answer

When Fiona's wage increases, the opportunity cost of her leisure time increases, not decreases. Therefore, she may choose to work fewer hours if she values her leisure time more with the higher wage.

Question 8

Which of the following is not correct? Using data from 2014,

Accepted Answer

According to the Census Bureau, in 2014, immigrants (both legal and illegal) made up approximately 13.3 percent of the U.S. population, not 40 percent. Choice A is not correct.

Question 9

Roxanne's hourly wage increases from $9 to $13. Which of the following describes a consequence of the increase in Roxanne's wage?

Accepted Answer

Option A is correct because with the increase in Roxanne's hourly wage, the opportunity cost of her leisure time increases as she could potentially earn more by working instead of leisure.
Option B is also correct because Roxanne may choose to work fewer hours due to the increase in her wage because her increased earnings enable her to maintain her previous level of lifestyle while working fewer hours.
Option C is incorrect because the labor supply curve slopes upward, which means that as the wage rate increases, the quantity of labor supplied also increases. Therefore, Roxanne will choose to work more, not fewer hours.

Question 10

Which of the following is correct? Using data from 2014,

Accepted Answer

In 2014, a significant portion of immigrants in the U.S. were from Latin America and Asia, making option D correct. The other options exaggerate the statistics related to immigrants' impact and presence in the U.S.

Question 11

Scenario 18-3
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour.
-Refer to Scenario 18-3. During the winter months, what is Sam's opportunity cost of taking an hour off work to go skiing?

Accepted Answer

The opportunity cost of taking an hour off work is the wage he would have earned during that hour, which is $13 per hour in the winter.

Question 12

Scenario 18-3
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour.
-Refer to Scenario 18-3. If Sam takes fewer hours of leisure in the winter than in the summer, we can assume that his labor supply curve for the range of earnings in this example

Accepted Answer

The fact that Sam takes fewer hours of leisure in the winter than in the summer implies that he values his winter job more than his summer job. This suggests that his labor supply curve is upward sloping, meaning that he is willing to supply more hours of work at a higher wage rate.

Question 13

Scenario 18-3
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour.
-Refer to Scenario 18-3. If Sam takes fewer hours of leisure in the summer than in the winter, we can assume that his labor supply curve for the range of earnings in this example

Accepted Answer

The answer of Scenario 18-3
Sam has two jobs, one for...

Question 14

Fiona's hourly wage decreases from $10 to $8. Which of the following describes a consequence of the decrease in Fiona's wage?

Accepted Answer

When Fiona's wage decreases, she might work more hours to maintain her income level (B), or she might work fewer hours if the lower wage makes work less attractive compared to leisure (C). Both scenarios are possible.

Question 15

For a worker, the opportunity cost of an hour of leisure

Accepted Answer

The opportunity cost of an hour of leisure is the wage the worker forgoes by not working. Therefore, if the wage rises by $8 per hour, the opportunity cost of leisure also rises by $8.

Question 16

Suppose an increase in the demand for labor results in an increase of $4 per hour in the equilibrium wage. How does the increase in the demand for labor affect the value of the marginal product of labor (VMPL)?

Accepted Answer

According to the law of demand, when the demand for labor increases, the equilibrium wage increases. This means that the value of the marginal product of labor (VMPL) must also increase by the same amount as the increase in the wage rate ($4 per hour). Therefore, the increase in the demand for labor affects the VMPL by increasing it by $4.

Question 17

Which of the following statements is correct?

Accepted Answer

Economic theory suggests that as productivity increases, the value of each worker's contribution to production also increases, leading to higher wages. Empirical evidence from the U.S. economy supports this theory, as studies have shown that productivity gains are typically associated with increases in real wages. Therefore, both economic theory and evidence from the U.S. economy suggest a close link between productivity and real wages.

Question 18

Scenario 18-3
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour.
-Refer to Scenario 18-3. Assume that Sam has an upward-sloping labor supply curve. If the opportunity cost of Sam's leisure time increases, he will respond by working

Accepted Answer

Sam's upward-sloping labor supply curve indicates that he will work more hours as the opportunity cost of his leisure time increases. This means that if he has the option to earn more money by working more hours, he will likely choose to do so in order to increase his income. Therefore, if the opportunity cost of his leisure time increases, he will respond by working more hours.

Question 19

Your college roommate receives a pay raise at her part-time job from $9 to $11 per hour. She used to work 25 hours per week, but now she decides to work 20 hours per week in order to spend more time studying economics. For this price range, her labor supply curve is

Accepted Answer

The labor supply curve is backward sloping in this scenario because as the wage rate increases from $9 to $11, the quantity of labor supplied decreases from 25 hours to 20 hours. This indicates a negative relationship between wage rate and hours worked, characteristic of a backward sloping labor supply curve.

Question 20

Both theory and history point to a close relationship between increases in

Accepted Answer

According to economic theory and historical evidence, there is a positive correlation between the productivity of labor and increases in real wages. In other words, when workers are more productive, they are able to produce more goods and services per hour worked, which can lead to higher wages as employers are willing to pay more for their output. This relationship is supported by data from various countries over time. Therefore, option C is the best choice.

Quiz 18: The Markets for the Factors of Production

If your wage increases from $10 per hour to $15 per hour, then your

A significant slowdown in the growth of productivity persisted in the U.S. economy between

The labor supply curve is fundamentally a representation of the trade-off people face between which of the following?

Fiona's hourly wage decreases from $10 to $8. Which of the following describes a consequence of the decrease in Fiona's wage?

Which of the following is not correct?

Fiona's hourly wage increases from $8 to $10. Which of the following describes a consequence of the increase in Fiona's wage?

Which of the following is not correct? Using data from 2014,

Roxanne's hourly wage increases from $9 to $13. Which of the following describes a consequence of the increase in Roxanne's wage?

Which of the following is correct? Using data from 2014,

Fiona's hourly wage decreases from $10 to $8. Which of the following describes a consequence of the decrease in Fiona's wage?

For a worker, the opportunity cost of an hour of leisure

Suppose an increase in the demand for labor results in an increase of $4 per hour in the equilibrium wage. How does the increase in the demand for labor affect the value of the marginal product of labor (VMPL) ?

Which of the following statements is correct?

Your college roommate receives a pay raise at her part-time job from $9 to $11 per hour. She used to work 25 hours per week, but now she decides to work 20 hours per week in order to spend more time studying economics. For this price range, her labor supply curve is

Both theory and history point to a close relationship between increases in