If every individual earned the same total income over his or her lifetime, there would still be observed inequality because:
a. people earn more in their youth.
b. people earn more in middle age.
c. people earn more when they are very old.
d. of none of the above.
QUESTION 2In which of the following cases is the employment relationship between the employee and the employer likely to resemble a spot market transaction?
a. When hospitals hire clerical staff
b. When a university hires members of faculty
c. When a corporate law firm hires lawyers
d. When unskilled workers are hired on a day-to-day basis for odd jobs
QUESTION 3Price makers do not have market power.
Indicate whether the statement is true or false
QUESTION 4The ____ participate in the labor force to a greater extent than do the ____.
a. very young; middle-aged and very old
b. middle-aged; very young and very old
c. very old; very young and middle-aged
d. very young and very old; middle-aged
QUESTION 5An important distinction between the labor market and the market for commodities is:
a. that contracts are arrived at more easily in the former.
b. the individual attributes of the buyer and seller hold far more importance in the former case.
c. that it is impossible to prevent breach of contract in the labor market.
d. that the market for commodities is a matching market while the former is not.
QUESTION 6Managers should do more of an activity if it adds more to revenue than it adds to cost.
Indicate whether the statement is true or false
QUESTION 7Which of the following observations would be valid if the Gini coefficient is equal to zero?
a. Perfect income inequality
b. Greater degree of income inequality
c. Lorenz curve overlaps the line of perfect income equality
d. Unequal distribution of income
QUESTION 8Identify the correct statement from the following.
a. Wages offered for a particular type of job are the same across the country.
b. The labor market exhibits rapid adjustment to changes in supply or demand conditions.
c. The labor market usually yields a range of wages rather than a unique equilibrium.
d. Wages exhibit frequent and prompt changes in response to changes in market conditions.
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