The term compensating wage differential refers to:
a. the bargaining capacity of a monoposonist in the labor market.
b. the wage differences that arise from differences in the risk involved in different jobs.
c. the criteria on which a firm offers a 401K plan to all its employees or just some employees.
d. the wage differences that arise from difference in productivity of the workers in a firm.
e. the negotiating power of the trade union.
QUESTION 2_____ measures the percentage change in quantity demanded of a good caused by a given percentage change in the price of a related good.
a. Income elasticity of demand
b. Cross-price elasticity of demand
c. Advertising elasticity of demand
d. Price elasticity of demand
e. Point elasticity
QUESTION 3A consumer equilibrium is depicted using indifference curve analysis as:
a. the point where two indifference curves cross.
b. the combination of two goods that minimizes total utility for a given level of income.
c. the combination of two goods located where the highest attainable indifference curve is just tangent to the budget line.
d. any combination of two goods where an indifference curve crosses the budget line.
QUESTION 4Why does the labor market have more than one equilibrium wage rate?
a. Workers differ in their productivities.
b. Productivity of workers increases initially but later declines.
c. The labor demand curve is backward bending.
d. Marginal revenue product of different inputs used by firms vary.
e. Employers compete among themselves to hire the best workers.
QUESTION 5A fall in the average income of a consumer, say during a recession, is represented by:
a. an upward movement along the demand curve for a good consumed by the consumer.
b. a downward movement along the demand curve for a good consumed by the consumer.
c. a shift of the demand curve for a good consumed by the consumer.
d. a rotation of the demand curve for a good consumed by the consumer.
e. an inward shift of the demand curve for an inferior good consumed by the consumer.
QUESTION 6Consumer equilibrium occurs at:
a. the point where the indifference curve crosses the budget line from below.
b. any point of intersection between an indifference curve and the budget line.
c. the midpoint of every indifference curve.
d. the point of tangency between an indifference curve and the budget line.
QUESTION 7The marginal revenue product is:
a. the value of all the final goods and services produced by a firm.
b. the value that an worker contributes to a firm.
c. an increase in the profit of a firm with an increase in the output by one unit.
d. the output per unit of worker employed by a firm.
e. the value that all the unskilled workers contribute to a firm.
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