Labor Economics (Microeconomic Emphasis)
Chapter Exam Questions
Course Introduction
Labor Economics (Microeconomic Emphasis) explores the functioning and dynamics of labor markets with a focus on individual and firm decision-making processes. The course examines key microeconomic topics such as labor supply and demand, wage determination, human capital investment, discrimination, unions, and the effects of government policies on employment outcomes. Students learn how economic theory and empirical analysis can be used to understand real-world labor market phenomena, evaluate labor-related public policies, and assess the behavior of workers, employers, and the role of institutions in shaping labor market outcomes.
Recommended Textbook
Microeconomic Theory Basic Principles and Extensions 10th Edition by Walter Nicholson
Available Study Resources on Quizplus
17 Chapters
334 Verified Questions
334 Flashcards
Source URL: https://quizplus.com/study-set/3944 Page 2
Chapter 1: Preferences and Utility
Available Study Resources on Quizplus for this Chatper
12 Verified Questions
12 Flashcards
Source URL: https://quizplus.com/quiz/78664
Sample Questions
Q1) Which of the following utility functions represent the same preferences as \(U ( x , y ) = \sqrt { x \cdot y }\)
A) \(U ( x , y ) = 10 \sqrt { x y }\) .
B)U(x,y)= x . y.
C)U(x,y)= ln x + ln y.
D)All of these represent the same preferences.
Answer: D
Q2) If utility is given by U(x,y)= Min (x,3y)then the bundle (3,2)provides the same utility as the bundle
A)(1,3).
B)(2,3).
C)(4,1).
D)(4,2).
Answer: C
Q3) Indifference curves
A)are non-intersecting.
B)are contour lines of a utility function.
C)are negatively sloped.
D)all of these are correct.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Utility Maximization and Choice
Available Study Resources on Quizplus for this Chatper
13 Verified Questions
13 Flashcards
Source URL: https://quizplus.com/quiz/78663
Sample Questions
Q1) Suppose utility is given by U(x,y)= ln x + ln y and p<sub>x</sub> = 1,I = 10.If y must be purchased in whole units,what is the maximum price this person would pay for that good?
A)1.
B)5.
C)10.
D)20.
Q2) If an individual's utility function is given by \(U ( x , y ) = \sqrt { x y }\) and I = 100, p<sub>x</sub> = 1,p<sub>y</sub> = 4,his or her preferred consumption bundle will be:
A)(20,20).
B)(50,12.5).
C)(40,15).
D)(30,15).
Q3) The slope of the budget constraint line is
A)the ratio of the prices (p<sub>x</sub>/p<sub>y</sub>).
B)the negative of the ratio of the prices (p<sub>x</sub>/p<sub>y</sub>).
C)the ratio of income divided by price of y (I/p<sub>y</sub>).
D)none of these is correct.
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Income and Substitution Effects
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/78662
Sample Questions
Q1) The price elasticity of demand for a vertical demand curve is A)0.
B)1
C)1.
D)infinity.
Q2) The price elasticity of demand for a linear demand curve follows the pattern (moving from high prices to low prices)
A)elastic,unit elastic,inelastic.
B)unit elastic,inelastic,elastic.
C)inelastic,unit elastic,elastic.
D)elastic,inelastic,unit elastic.
Q3) If a consumer purchases only two goods (x and y)and the demand for x is elastic,then a rise in the price of x
A)will cause total spending on good y to rise.
B)will cause total spending on good y to fall.
C)will cause total spending on good y to remain unchanged.
D)will have an indeterminate effect on total spending on good y.
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: Demand Relationships Among Goods
Available Study Resources on Quizplus for this Chatper
18 Verified Questions
18 Flashcards
Source URL: https://quizplus.com/quiz/78661
Sample Questions
Q1) In the Slutsky equation for \(\partial x _ { i } / \partial p _ { j }\) ,the income effect is given by
A)\(x _ { i } \partial x _ { i } / \partial I\) .
B)\(x _ { j } \partial x _ { i } / \partial I\) .
C)\(x _ { i } \partial x _ { j } / \partial I\) .
D)\(x _ { j } \partial x _ { j } / \partial I\) .
Q2) Homogeneity of the demand function is shown by:
A)\(e _ { x , p _ { x } } + e _ { x , p _ { y } } + e _ { \chi , 1 } = 0\) .
B)\(e _ { x , p _ { x } } + e _ { \chi , p _ { y } } + e _ { \chi , l } = 1\) .
C)\(s _ { x } e _ { x , p _ { \lambda } } + s _ { y } e _ { x , p _ { y } } = - e _ { x , I }\) .
D)\(s _ { x } e _ { x , I } + s _ { y } e _ { y , I } = l\) .
Q3) With only two goods,x and y,if x and y are gross substitutes,a rise in p<sub>x</sub> must necessarily
A)increase spending in x.
B)reduce spending in x.
C)increase spending in y.
D)reduce spending in y.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Uncertainty and Information
Available Study Resources on Quizplus for this Chatper
16 Verified Questions
16 Flashcards
Source URL: https://quizplus.com/quiz/78660
Sample Questions
Q1) Expected value is defined as
A)the profit on a fair bet.
B)the most likely outcome of a given experiment.
C)the outcome that will occur on average for a given experiment.
D)the relative frequency with which an event will occur.
Q2) Risk-averse individuals will diversify their investments because this will
A)increase their expected returns.
B)provide them with some much-needed variety.
C)reduce the variability of their returns.
D)reduce their transactions costs.
Q3) An option may add value to a transaction because:
A)interest charges are reduced.
B)the price of the good is reduced.
C)additional information may become available.
D)options provide buyers with monopsony power.
Q4) An individual will never buy complete insurance if
A)he or she is risk averse.
B)insurance premiums are unfair.
C)he or she is a risk taker.
D)insurance premiums are fair.
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Strategy and Game Theory
Available Study Resources on Quizplus for this Chatper
18 Verified Questions
18 Flashcards
Source URL: https://quizplus.com/quiz/78659
Sample Questions
Q1) The difference between a Nash equilibrium and a subgame-perfect equilibrium is
A)the former requires rational play both on and off the equilibrium path but the latter requires rational play only on the equilibrium path.
B)the former requires rational play only on the equilibrium path but the latter requires rational play both on and off the equilibrium path.
C)Nash equilibria are a subset of the subgame-perfect equilibria.
D)nothing; they are synonyms.
Q2) Nash equilibria
A)always exist in pure strategies.
B)generally come in even numbers.
C)always exist in finite games.
D)All of these answers are correct.
Q3) A subgame-perfect equilibrium
A)is not a Nash equilibrium; it is a refinement of Nash equilibrium.
B)is an equilibrium concept used in simultaneous games.
C)is a special sort of Nash equilibrium.
D)can be ruled out using backward induction.
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Production Functions
Available Study Resources on Quizplus for this Chatper
14 Verified Questions
14 Flashcards
Source URL: https://quizplus.com/quiz/78658
Sample Questions
Q1) Graphically,the average productivity of labor is illustrated by
A)the slope of the total product curve at the relevant point.
B)the slope of the marginal productivity curve at the relevant point.
C)the negative of the slope of the marginal productivity curve at the relevant point.
D)the slope of the chord connecting the origin with the relevant point on the total output curve.
Q2) Consider the production function \(q = \left( k ^ { \alpha } + l ^ { \alpha} \right) ^ { \beta }\) . For this function to have diminishing marginal productivities and increasing returns to scale,it must be the case that
A) > 1 < 1.
B) > 1 > 1.
C) < 1 < 1.
D) < 1 > 1.
Q3) The <u>average</u> productivity of labor reaches its maximum
A)at the point of inflection of the total product curve.
B)where the slope of the total product curve is steepest.
C)where the slope of the total product curve is zero.
D)where marginal and average productivity are equal.
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Cost Functions
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/78674
Sample Questions
Q1) A firm whose production function displays increasing returns to scale will have a total cost curve that is
A)a straight line through the origin.
B)a curve with a positive and continually decreasing slope.
C)a curve with a positive and continually increasing slope.
D)a curve with a negative and continually decreasing slope.
Q2) For the cost function C = 100 + .3q,
A)marginal cost is constant.
B)average cost is U-shaped.
C)fixed costs diminish with q.
D)all of the other answers are correct.
Q3) As long as marginal cost is less than average variable cost,
A)both average total costs and average variable costs will be falling.
B)average total costs will be falling but average costs may be rising or falling.
C)average fixed costs are rising.
D)average total costs are falling but average fixed costs may be rising.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Profit Maximization
Available Study Resources on Quizplus for this Chatper
32 Verified Questions
32 Flashcards
Source URL: https://quizplus.com/quiz/78673
Sample Questions
Q1) If price is equal to short-run average variable cost,the firm is at the point known as
A)the break even point.
B)the profit maximizing point.
C)the shutdown point.
D)the revenue maximizing point.
Q2) If a firm wished to maximize total revenues it should produce where
A)marginal cost is zero.
B)marginal revenue is zero.
C)marginal revenue is equal to marginal cost.
D)marginal revenue is equal to price.
Q3) Input demand functions that are calculated from profit functions differ from those calculated from cost functions because
A)they assume cost-minimization.
B)they hold output constant.
C)they assume output price is constant.
D)they assume output is set at its profit-maximizing level.
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: The Partial Equilibrium Competitive Model
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/78672
Sample Questions
Q1) A deadweight loss of consumer and/or producer surplus occurs when
A)producers fail to maximize profits.
B)mutually beneficial transactions cannot be completed.
C)consumers do not maximize their utility.
D)the price of inputs increases.
Q2) The market demand curve for any good is
A)independent of individuals' demand curves for the good.
B)the vertical summation of individuals' demand curves.
C)the horizontal summation of individuals' demand curves.
D)derived from the firm's marginal cost of production.
Q3) When a quota/trade barrier is instituted,the loss of domestic consumer surplus may be transferred to all of the following except:
A)foreign consumers.
B)domestic producers.
C)foreign producers.
D)consumers of other domestic products.
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: General Equilibrium and Welfare
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/78671
Sample Questions
Q1) Suppose two goods (x and y )are being produced efficiently and that the production of x is always more labor intensive than the production of y.Production depends only on two factors (capital and labor); these may be smoothly substituted for each other.The total quantities of these inputs are fixed.An increase in the production of x and a decrease in the production of y will
A)increase the capital-labor ratio in each firm.
B)decrease the capital-labor ratio in each firm.
C)leave the capital-labor ratio for each firm unchanged.
D)increase the capital-labor ratio in y production and decrease the capital-labor ratio in x production.
Q2) Suppose that the two persons in an exchange economy (A and B)have utility functions given by \(\begin{array} { l }
U _ { A } = x + 2 y \\
U _ { B } = \sqrt { x y } \end{array}\) Along the contract curve,B's ratio of Y to X will be
A)2:1.
B)1:1.
C)1:2.
D)between 1:1 and 1:2.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Monopoly
Available Study Resources on Quizplus for this Chatper
18 Verified Questions
18 Flashcards
Source URL: https://quizplus.com/quiz/78670
Sample Questions
Q1) All of the following might explain a firm offering quantity discounts except:
A)lower costs of handling large orders.
B)an inelastic demand for the good.
C)monopoly power in this market.
D)adoption of a sales maximization strategy.
Q2) A monopoly producer of a durable good
A)can earn even greater profits than a producer of a non-durable.
B)must consider competition from its own output decisions.
C)will have higher marginal costs than most other monopolies.
D)will not set marginal revenue equal to marginal cost.
Q3) For the practice of price discrimination to be successful,the monopoly must
A)be able to prevent resale of its product.
B)face similar demand curves for various markets.
C)have similar costs among markets.
D)have a downward sloping marginal cost curve.
Q4) Relative to single price policy third degree price discrimination
A)always reduces welfare.
B)always increases welfare.
C)may increase welfare if total output falls.
D)may increase welfare if total output rises.
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Imperfect Competition
Available Study Resources on Quizplus for this Chatper
21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/78669
Sample Questions
Q1) How does the leader's behavior in the quantity-leadership (Stackelberg)game compare to that in the analogous price-leadership game?
A)It behaves as a "puppy dog" in both.
B)It behaves as a "top dog" in the quantity leadership game but a "puppy dog" in the price leadership game.
C)It behaves as a "top dog" in the quantity leadership game but a "puppy dog" in the price leadership game
D)It behaves as a "top dog" in both
Q2) The subgame-perfect equilibrium of a two-stage game in which firms first choose capacities and then engage in a Bertrand price setting game resembles the equilibrium in
A)the competitive model.
B)the Cournot model.
C)the cartel model.
D)the price leadership model.
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Labor Markets
Available Study Resources on Quizplus for this Chatper
18 Verified Questions
18 Flashcards
Source URL: https://quizplus.com/quiz/78668
Sample Questions
Q1) A monopsonist that faces a labor supply curve of the form l = 4w and has a constant marginal revenue product of 50 per unit of l,will opt for the following,w,l combination
A)w = 10 l = 40.
B)w = 25 l = 100.
C)w = 50 l = 200.
D)w = 100 l = 400.
Q2) If an individual is maximizing his or her utility,his or her marginal rate of substitution of leisure hours for consumption will be
A)equal to one divided by his or her wage rate.
B)greater than one divided by his or her wage rate.
C)equal to his or her wage rate.
D)less than his or her wage rate.
Q3) When an individual's wage rises,the income effect tends to
A)increase hours worked.
B)decrease hours worked.
C)leave hours worked unchanged.
D)it is impossible to predict what will happen to hours worked.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Capital and Time
Available Study Resources on Quizplus for this Chatper
17 Verified Questions
17 Flashcards
Source URL: https://quizplus.com/quiz/78667
Sample Questions
Q1) Rate of return refers to
A)the increase in future output made possible by investing one unit of current output in capital accumulation.
B)the dividend payments made on corporate issued stock.
C)the increase in current output made possible by investing in units of future output in capital accumulation.
D)the rate at which capital depreciates.
Q2) Adding uncertainty to future consumption will tend to increase savings providing:
A) \(U ^ { \prime \prime } > 0\) .
B) \(U ^ { \prime \prime } / U ^ { t } > 0\) .
C) \(U ^ { \prime \prime } / U ^ { t } < 0\) .
D) \(U ^ { \prime\prime\prime} > 0\) .
Q3) If the interest rate rises,the present discounted value of a stream of payments owed in the future
A)rises.
B)stays constant.
C)falls.
D)may rise or fall depending on the shape of the stream.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Asymmetric Information
Available Study Resources on Quizplus for this Chatper
18 Verified Questions
18 Flashcards
Source URL: https://quizplus.com/quiz/78666
Sample Questions
Q1) When the monopoly insurer cannot observe the care taken by the insured party to avoid an accident,the most profitable contract for it
A)offers full insurance at a higher price than the full-information policy.
B)offers full insurance at a lower price than the full-information policy.
C)offers partial insurance at a higher price than the full-information policy.
D)offers partial insurance at a lower price than the full-information policy.
Q2) Continue to suppose as in the previous question that the utility function for each of the firm's 5 workers is \(U ( l ) = w l - l ^ { 2 }\) where l is hours worked and w is the wage.Suppose now that the firm can only monitor the total hours worked by the group and pay each worker an equal share of the wage \(w = 20\) times the total number of hours.How many hours will each worker choose to work?
A)2 hours.
B)4 hours.
C)8 hours.
D)10 hours.
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Externalities and Public Goods
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/78665
Sample Questions
Q1) To reach an economically efficient output level,the size of an excise tax imposed on a firm generating a negative externality should be
A)the firm's marginal cost.
B)the social marginal cost.
C)the difference between the social marginal cost and the firm's marginal cost.
D)the sum of the social marginal cost and the firm's marginal cost.
Q2) If bargaining is costless and an externality exists,
A)an efficient outcome may be reached depending on which party is assigned property rights.
B)an efficient outcome will be reached regardless of which party is assigned property rights.
C)an efficient outcome will not be reached without government intervention.
D)an efficient outcome can never be reached.
Q3) A nonexclusive good is a good which
A)is sold in various markets.
B)is impossible to keep people from enjoying the benefits the good provides.
C)is produced by a perfectly competitive firm.
D)is produced at the lowest possible cost.
To view all questions and flashcards with answers, click on the resource link above. Page 19