Question 1

Suppose a shift of the labor-demand curve results in an increase of $5 in the equilibrium wage. How does this shift affect the value of the marginal product of labor?

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Question 2

Does the movement of workers from other countries to the U.S. affect the demand for labor in the U.S., or does it affect the supply of labor in the U.S.?

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Question 3

A highly-paid research scientist works 12 hours a day, while a common laborer works only 5 hours a day. Offer a likely explanation, using the concept of opportunity cost.

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Question 4

The theory of labor supply is based on the trade-off between __________.

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Question 5

Angie was the last worker hired by a firm that is competitive in the labor market. The labor market always is in equilibrium. The firm sells its output for $24 per unit. When Angie was hired, the firm's output increased by 2 units per hour as a result. What is Angie's hourly wage?

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Question 6

Who has a greater opportunity cost of leisure - a president of a major corporation or a babysitter?

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Question 7

Define monopsony.

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Question 8

Over time, there have been technological advances in the production of radios. At the same time, it has become less popular to listen to radio. Taking these two events into account, what would be the likely effect on the wages of workers who manufacture radios?

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Question 9

Over the last 60 or so years, the percentage of women with paid jobs has increased significantly. Is this increase in female employment associated with an increase in the demand for labor, or is it associated with an increase in the supply of labor?

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Question 10

Does an upward-sloping labor-supply curve mean that people respond to a decrease in the wage by enjoying more leisure or less leisure?

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Question 11

Christine works for a firm that makes tires for cars. How is Christine's wage affected if the price of tires decreases?

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Question 12

Bill is a laborer. What is the relationship between Bill's wage and his opportunity cost of an hour of leisure?

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Question 13

Suppose the prices of agricultural products such as corn and soybeans increase. What is the effect of these price increases on the marginal product of the 1,000^th farm worker? What is the effect on the value of the marginal product of the 1,000^th farm worker?

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Question 14

If a particular labor market were to convert from a competitive market to a monopsony, what effect would we expect on the number of workers hired? What effect would we expect on the wage paid to workers?

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Question 15

How does increased immigration affect the labor market? How would the equilibrium wage and the equilibrium quantity of labor be affected?

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Question 16

Christine works for a firm that makes tires for cars. How is Christine's wage affected if the demand for cars increases?

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Question 17

Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?

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Question 18

Rob was the last worker hired by a firm that is competitive in the labor market. The labor market always is in equilibrium. Rob's wage is $30 per hour. When Rob was hired, the firm's output increased by 4 units per hour as a result. For what price does the firm sell its output?

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Question 19

Over time, carpenters become aware of more attractive employment opportunities outside of carpentry. Does this development affect the demand for carpenters, or does it affect the supply of carpenters?

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Question 20

Suppose a shift of the demand curve for strawberry pickers causes the equilibrium wage of strawberry pickers to increase by $2. The price of strawberries is $3 per pound before and after the shift. Does the shift increase the marginal product of the last picker hired, or does it decrease it? What is the amount of the increase or decrease?

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Quiz 18: The Markets for the Factors of Production