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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 also __________ 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 | |
The __________________________ is the extra revenue from selling the output made by an extra worker. |
| | A) | the marginal product of capital |
| | B) | the marginal value product of capital |
| | C) | the marginal value product of labour |
| | D) | the marginal product of labour |
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| 4 | |
If a firm has monopsony power it can employ all the labour it requires at a single price. |
| | A) | True |
| | B) | False |
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| 5 | |
The ______________________ of labour is the change in total output revenue when a firm sells the extra goods that an extra unit of labour input allows it to produce. |
| | A) | marginal revenue product |
| | B) | marginal product |
| | C) | marginal revenue |
| | D) | revenue product |
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| 6 | |
____________ is the payment a factor receives in excess of the ______________ needed to induce it to supply its services in that use. |
| | A) | wage, resell value |
| | B) | economic rent, transfer earnings |
| | C) | compensation, transfer earnings |
| | D) | wage, transfer earnings |
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| 7 | |
Insiders have jobs and are represented in wage bargaining. Outsiders do not have jobs and are unrepresented in wage bargaining. |
| | A) | True |
| | B) | False |
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| 8 | |
The demand for factors of production is based upon the demand for goods and services, in other words it is a: |
| | A) | effective demand |
| | B) | elastic demand |
| | C) | reflective demand |
| | D) | derived demand |
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| 9 | |
When a firm can hire labour for £15 an hour, and each new employee can produce £15 of goods per hour, the firm will: |
| | A) | employ more workers |
| | B) | reduce employment |
| | C) | stop hiring additional workers |
| | D) | expand operations |
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| 10 | |
Any firm maximizes profits by ensuring that the marginal revenue of an extra worker is greater than the marginal cost of an extra worker. |
| | A) | True |
| | B) | False |
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| 11 | |
The slope of the marginal value product of labour schedule reflects: |
| | A) | production technology. |
| | B) | the number of public holidays. |
| | C) | the price of alcohol. |
| | D) | directors’ bonuses. |
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| 12 | |
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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| 13 | |
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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| 14 | |
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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| 15 | |
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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| 16 | |
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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| 17 | |
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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| 18 | |
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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| 19 | |
The transfer earnings of a factor are the payments received in excess of its opportunity cost. |
| | A) | True |
| | B) | False |
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| 20 | |
Possible causes of involuntary unemployment are: |
| | A) | minimum wage agreements. |
| | B) | trade unions. |
| | C) | scale economies. |
| | D) | insider-outsider distinctions. |
| | E) | efficiency wages. |
| | F) | all of the above. |
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