Question 1

If the demand for labor is unchanged, an increase in the supply of labor will lead to

Accepted Answer

An increase in the supply of labor without any change in demand will lead to a surplus of labor. This means that there will be more workers than the number of jobs available. Employers will be able to pick and choose from a larger pool of workers, which will drive down the equilibrium wage. However, the increase in the supply of labor will also encourage employers to hire more workers, which will increase the quantity of labor demanded. Thus, there will be an increase in the quantity of labor demanded and a decrease in the equilibrium wage.

Question 2

Suppose the labor market is in equilibrium.Which of the following statements is false?

Accepted Answer

The answer of Suppose the labor market is in equilibrium.Which...

Question 3

Which of the following summarizes the impact of immigration growth on the labor market?

Accepted Answer

The growth in immigration will increase the supply of labor, shifting the supply curve to the right. This will result in a reduction in the equilibrium wage and an increase in the quantity of labor demanded, as employers will have a larger pool of potential workers to choose from.

Question 4

Daniel Hamermesh and Stephen Donald studied the determinants of the earnings of college graduates years after they graduated.Which of the following is one result of their study?

Accepted Answer

The result of the study conducted by Daniel Hamermesh and Stephen Donald was that students who had taken 15 credits of upper-division science and mathematics courses and earned high grades in these courses earned about 10 percent more than students who took no upper-division classes in these subjects. The other options are not mentioned as results of their study.

Question 5

In situations where new technologies are considered substitutes for workers, demand for these workers will ________, resulting in ________ in the equilibrium wage.

Accepted Answer

When new technologies are considered substitutes for workers, demand for workers decreases and this results in a decrease in equilibrium wage. This is because there are now fewer job opportunities available, causing less bargaining power for workers and resultingly lower wages.

Question 6

Consider the market for pilots.What is likely to happen to the equilibrium wage and quantity of pilots if the government enforces a lower mandatory retirement age, say from age 65 to age 62?

Accepted Answer

If the government enforces a lower mandatory retirement age, the quantity of pilots in the market would increase as more pilots would be forced to retire earlier. This increase in quantity would put downward pressure on the wage, leading to a decrease in the equilibrium wage. At the same time, some older pilots may choose to exit the market earlier, resulting in a decrease in the equilibrium quantity. However, the decrease in quantity would likely be smaller than the increase due to the larger number of pilots retiring early. Overall, there would be a decrease in the equilibrium wage and an increase in the equilibrium quantity of pilots.

Question 7

Suppose the government enacts legislation which reduces the amount of legal immigration into the country.What is likely to happen to the equilibrium wage and quantity of labor?

Accepted Answer

Reducing the amount of legal immigration into the country will decrease the supply of labor, shifting the labor supply curve to the left. As a result, the equilibrium wage rate will increase and the equilibrium quantity of labor will decrease. Therefore, option D is the correct answer.

Question 8

All else equal, if job turnover has people leaving jobs and finding new jobs in the same industry, this will

Accepted Answer

Job turnover within the same industry does not affect the total demand or supply of labor in the market, as the number of available jobs and workers remains the same. Therefore, it does not change the equilibrium wage rate or the level of employment in the industry.

Question 9

The most direct effect of immigration is

Accepted Answer

Immigration directly increases the supply of labor in a country. When immigrants come to a country, they bring their skills, education, and abilities with them, thus increasing the pool of workers available to employers. This can lead to increased competition for jobs, lower wages, and potential displacement of native-born workers. However, it can also lead to economic growth and increased productivity if immigrants bring needed skills and fill labor shortages.

Question 10

If the labor supply is unchanged, an increase in the demand for labor will

Accepted Answer

An increase in the demand for labor will lead to increased competition among employers for workers, resulting in an increase in the equilibrium wage. As a result, firms may hire more workers to meet the increased demand for their products or services, leading to an increase in the number of workers employed. Thus, choice D describes the effect of an increase in the demand for labor.

Question 11

Consider the market for opticians.What is likely to happen to the equilibrium wage and quantity of opticians if more and more people turn to laser eye surgery instead of wearing glasses or contact lens?

Accepted Answer

As more people opt for laser eye surgery, the demand for opticians decreases, leading to a fall in both the equilibrium wage and quantity of opticians.

Question 12

The economists at the New York Fed estimate that the return the typical person receives from an investment in a college education is

Accepted Answer

The answer of The economists at the New York Fed...

Question 13

Suppose the following two events occur in the domestic market for radiologists:
A.Some hospitals are outsourcing some radiology services such as reading x-rays.
B.Some medical schools have closed down their radiology departments as fewer students enroll in this field.
What is likely to happen to the equilibrium wage and quantity of radiologists following these two events?

Accepted Answer

Outsourcing reduces demand for domestic radiologists, while fewer graduates reduce supply. The quantity falls, but the wage effect is unclear due to opposing demand and supply changes.

Question 14

Suppose the following two events occur in the market for elementary school teachers:
A.Overcrowded schools and education budget cuts have discouraged young college students from pursuing careers in teaching.
B.With an increasing birth rate, the number of children entering the elementary school system is expected to increase significantly over the next ten years.
What is likely to happen to the equilibrium wage and quantity of teachers as a result of these two events?

Accepted Answer

The answer of Suppose the following two events occur in...

Question 15

How will an increase in labor productivity affect equilibrium in the labor market?

Accepted Answer

An increase in labor productivity means that workers can produce more output per hour of work, which makes the labor more productive and valuable to employers. As a result, demand for labor will increase as employers will seek to hire more workers to produce more output. With the increase in demand, the equilibrium wage and quantity of labor will increase as well. Option A is incorrect because labor supply is not affected by labor productivity. Option B is incorrect because an increase in demand for jobs would result in an increase in the equilibrium wage rate, but it would not necessarily increase the quantity of labor. Option D is incorrect because an increase in labor productivity would not lead to a decrease in demand for labor, as explained earlier.

Question 16

In 2017, full-time workers aged 25 and over with a college degree earned ________ school dropouts.

Accepted Answer

In 2017, full-time workers aged 25 and over with a college degree earned approximately 2.5 times as much as high school dropouts.

Question 17

In situations where new technologies are considered complementary to workers, demand for these workers will ________, resulting in ________ in the equilibrium wage.

Accepted Answer

When new technologies are considered complementary to workers, they enhance the productivity of workers and, as a result, increase demand for these workers. An increase in demand, in turn, increases the equilibrium wage. Therefore, option B is the correct answer.

Question 18

What happens to the equilibrium wage and quantity of labor if output price rises?

Accepted Answer

When the output price rises, firms are willing to pay more for labor because the value of the marginal product of labor increases, leading to higher equilibrium wages and a higher quantity of labor demanded.

Question 19

A recent study by economists at the Federal Reserve Bank of New York estimates that over the period from 1970 to 2013, the average college graduate earned ________ more per year than the average person who had only a high school degree.

Accepted Answer

According to the study, the average college graduate earned $23,500 more per year than the average person who only had a high school degree over the period from 1970 to 2013.

Question 20

Which of the following would cause an increase in the equilibrium wage?

Accepted Answer

An increase in the demand for labor would cause an increase in the equilibrium wage, as employers would be willing to pay more to hire workers given the increased competition to hire from a limited pool of labor. A, B, and D would all cause a decrease in the equilibrium wage, as there would be more workers available than there are jobs, resulting in decreased competition among employers and a lower wage rate.

Quiz 17: The Markets for Labor and Other Factors of Production