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| 1.
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Globalization and skill-biased technological changes have resulted in ______ in the United States and ______ in Western Europe. |
| | A) | High rates of unemployment; increasing worker mobility |
| | B) | Increasing labour market rigidity; increasing wage inequality |
| | C) | A slowdown in productivity growth; high rates of unemployment |
| | D) | High rates of unemployment; increasing wage inequality |
| | E) | Increasing wage inequality; higher rates of unemployment |
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| 2.
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If new production technology increases the marginal productivity of skilled workers then the real wage of unskilled workers is predicted to _____ and the employment of unskilled workers
is predicted to _____. |
| | A) | Increase; increase |
| | B) | Decrease; decrease |
| | C) | Increase; not change |
| | D) | Increase; decrease |
| | E) | Decrease; not change |
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| 3.
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Which of the following is an example of structural unemployment? |
| | A) | Dora lost her job when the textile mill closed. She does not have skills to work in another industry and has been unemployed for over a year. |
| | B) | Marsha was laid off from her job with the airline because the recession has reduced the demand for airline travel. She expects to get her job back when the economy picks up. |
| | C) | Alan, a software engineer, lost his job when the internet company he worked for went bankrupt. He interviewed with five companies in the area before taking a job with another firm in the industry. |
| | D) | Jim had a job as an engineer in Manchester, but quit when his wife took a job London. He looked for a month before finding a new job that he liked. |
| | E) | Hector looked for a job for five weeks after finishing college. He turned down several jobs that didn't use his skills, but now has a job requiring the expertise he gained in college. |
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| 4.
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The demand for labour in a certain industry is ND = 50 - 5w, where ND is the number of workers employers want to hire and w is the real wage measured in euros per hour. The supply of labour in the same industry is NS = 5 + 5w, where NS is the number of people willing to work. If a union contract requires that workers be paid €8 per hour, how many workers will be unemployed? |
| | A) | 25 |
| | B) | 30 |
| | C) | 35 |
| | D) | 40 |
| | E) | 45 |
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| 5.
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High Tech, Inc. produces plastic chairs that sell for €10 each. The following table provides information about how many plastic chairs can be produced per hour. For simplicity assume that labour is the only input.
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::Table 1::/sites/dl/free/0077108310/329317/ch21Table1.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">Table 1 (13.0K)</a>]]>Table 1
How many workers will be hired, if the hourly wage for workers is €50? |
| | A) | 1 |
| | B) | 2 |
| | C) | 3 |
| | D) | 4 |
| | E) | 5 |
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| 6.
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Skill-biased technological change affects the marginal products of _____ workers differently from those of _____ workers. |
| | A) | Male; female |
| | B) | Union; non-union |
| | C) | Government; private-sector |
| | D) | Retail-industry; service-sector |
| | E) | Highly trained; low-skilled |
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| 7.
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All of the following describe trends in the labour markets of the industrialized world EXCEPT: |
| | A) | Growing wage inequality especially in the United States |
| | B) | An acceleration in real wage growth in Europe and the United states since the 1970s |
| | C) | High rates of unemployment in Europe than in the United states |
| | D) | Substantial growth in labour productivity since 1950 in Europe and the United states |
| | E) | Substantial growth in real wages since 1950 in Europe and the United states |
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| 8.
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In recent decades U.S. labour market trends differ from trends in western Europe because the U.S. has experienced _____ than western Europe: |
| | A) | Slower wage growth and slower job growth |
| | B) | More unemployment and slower wage growth |
| | C) | Less unemployment and less wage inequality |
| | D) | Greater wage inequality and greater job growth |
| | E) | Greater unemployment and slower job growth |
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| 9.
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Increased international trade increases the demand for a country's exports, _____ the demand for workers in export industries, and _____ their wages. |
| | A) | Increasing; increasing |
| | B) | Increasing; decreasing |
| | C) | Does not change; increasing |
| | D) | Decreasing; decreasing |
| | E) | Decreasing; increasing |
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| 10.
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Increases in real wages and employment accompanied by an increase in labour supply can be explained only if the demand for labour _____ the supply of labour. |
| | A) | Increased more than |
| | B) | Increased less than |
| | C) | Increased by approximately the same amount as |
| | D) | Decreased relative to |
| | E) | Remained constant relative to |
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