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1 | |
The substitution effect of a rise in the price of labour will ___________ the quantity of labour and the output effect will __________ it |
| | A) | increase, increase |
| | B) | increase, reduce |
| | C) | reduce, reduce |
| | D) | reduce, increase |
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2 | |
As more labour is used the marginal physical product of labour increases |
| | A) | TRUE |
| | B) | FALSE |
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3 | |
A profit-maximizing firm will hire labour until __________ equals the ____________ |
| | A) | marginal revenue, marginal cost |
| | B) | long run marginal revenue, long run marginal cost |
| | C) | labour output ratio, capital output ratio |
| | D) | marginal cost of labour, marginal revenue product |
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4 | |
The downward sloping marginal physical product of labour is the firm's ___________ |
| | A) | supply of labour |
| | B) | short-run demand curve for labour |
| | C) | marginal cost of labour |
| | D) | marginal revenue product of labour |
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5 | |
When we say that labour demand is a derived demand, we are referring to government initiatives to increase employment |
| | A) | TRUE |
| | B) | FALSE |
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6 | |
The participation rate in the labour force is affected by |
| | A) | higher real wages |
| | B) | lower fixed costs of working |
| | C) | lower non-labour income |
| | D) | changes in tastes between leisure and work |
| | E) | all of the above |
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7 | |
Top footballers tend to earn more than lecturers because |
| | A) | footballers give more entertainment |
| | B) | lecturers are lazy |
| | C) | the labour markets are imperfect |
| | D) | top footballers are relatively scarce in relation to lecturers |
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8 | |
Human capital can be described as |
| | A) | the tools used by workers to enhance productivity |
| | B) | a persons inherited abilities |
| | C) | the stock of expertise accumulated by a worker |
| | D) | education |
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9 | |
The supply of highly educated workers is fixed in long run |
| | A) | TRUE |
| | B) | FALSE |
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10 | |
The most important source of wage differentials are |
| | A) | regional variation |
| | B) | unionization |
| | C) | relative danger |
| | D) | skills |
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11 | |
Skilled labour is relatively scarce because |
| | A) | there are too few teachers |
| | B) | too few student places in higher education |
| | C) | it is costly to acquire human capital |
| | D) | teachers' salaries are too low |
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12 | |
The opportunity cost of acquiring education is ____________ |
| | A) | course fees |
| | B) | course fees and living expenses |
| | C) | the earnings foregone |
| | D) | course fees, living expenses and textbooks |
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13 | |
By restricting labour supply a trade union can ____________ and ___________ |
| | A) | increase the wage, increase employment |
| | B) | maintain the wage, increase employment |
| | C) | increase the wage, lower employment |
| | D) | maintain the wage, lower employment |
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14 | |
In the UK under a _________ of the labour force belong to a trade union |
| | A) | quarter |
| | B) | third |
| | C) | half |
| | D) | three-quarters |
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15 | |
Unions achieve a higher wage differential the more _______________ and the more ___________ |
| | A) | inelastic the demand for labour, they can restrict the supply of labour |
| | B) | members they have, aggressive they behave |
| | C) | the economy is growing, people prefer leisure |
| | D) | the productivity s growing, vacancies exist |
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16 | |
A closed shop is a union that has no room for additional members. |
| | A) | TRUE |
| | B) | FALSE |
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17 | |
Women and non-whites on average receive lower incomes than white men because |
| | A) | they tend to work in relatively unskilled jobs |
| | B) | educational disadvantage |
| | C) | firms are reluctant to invest in training |
| | D) | all of the above |
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18 | |
In the UK, in recent years, union membership has _________ and days of work lost because of strikes has __________ |
| | A) | grown, declined |
| | B) | declined, declined |
| | C) | declined, grown |
| | D) | grown, grown |
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19 | |
Involuntary unemployment exists if workers |
| | A) | will not work at the offered wage |
| | B) | Would work at the going wage but cant find jobs |
| | C) | Will not work because the hours are anti-social |
| | D) | Are not prepared to move house to get the job |
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20 | |
Efficiency wages are _________ that raise ___________ |
| | A) | low wages, employment |
| | B) | high wages, labour supply |
| | C) | high wages, productivity |
| | D) | high wages, employment |
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21 | |
The difference between gross investment and net investment is |
| | A) | depreciation of the existing capital stock |
| | B) | productive investment |
| | C) | dwellings |
| | D) | inventories |
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22 | |
The cost of using capital services is the ___________________ |
| | A) | wage rate of capital |
| | B) | interest charges |
| | C) | marginal capital cost |
| | D) | rental rate for capital |
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23 | |
The value of an asset depends upon |
| | A) | its scrap value |
| | B) | its depreciation |
| | C) | the present value of the future stream of income it can earn |
| | D) | the cost of loans |
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24 | |
The marginal revenue product of capital is the __________________ |
| | A) | change in a company's balance sheet when it acquires new plant |
| | B) | additional value of output from using more capital |
| | C) | change in a company's share price |
| | D) | changing value of the capital stock |
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25 | |
The demand for capital services is derived from a falling MRPK schedule |
| | A) | TRUE |
| | B) | FALSE |
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26 | |
In the short run, the supply of capital is ____________ and in the long run will depend on ____________ |
| | A) | variable, technology |
| | B) | fixed, expectations |
| | C) | fixed, rental rate of capital |
| | D) | variable, interest rates |
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27 | |
If workers get a real wage increase this will likely _______________ and ____________ |
| | A) | encourage the use of more capital in the long run, reduce demand for all inputs |
| | B) | encourage the use of more capital, increase demand for all inputs |
| | C) | encourage the use of less capital, reduce demand for all inputs |
| | D) | encourage the use of less capital, reduce demand for all inputs |
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28 | |
The supply of land is normally greater in the long run than in the short run |
| | A) | TRUE |
| | B) | FALSE |
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29 | |
Land will be allocated between competing uses so that _______________ |
| | A) | housing gets priority |
| | B) | industry gets priority |
| | C) | farming gets priority |
| | D) | the equilibrium rental rate equilibrates total demand with supply |
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30 | |
Different capital intensity in different industries is mainly explained by _________ and _________ |
| | A) | wage differentials, skill levels |
| | B) | technology, the ease of factor substitution |
| | C) | government grants, international competition |
| | D) | patents, skill shortages |
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31 | |
The functional distribution of income shows how national income is divided between |
| | A) | employees |
| | B) | the population |
| | C) | the factors of production |
| | D) | the working population |
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32 | |
A major cause of income inequality in the UK is trade union power |
| | A) | TRUE |
| | B) | FALSE |
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33 | |
The transfer earnings of a factor are the payments received in excess of its opportunity cost. |
| | A) | TRUE |
| | B) | FALSE |
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2003 A McGraw-Hill Online Learning Centre