Demand Wage Employment

1.Suppose the demand for peppers is rising. How will this affect the demand for pepper pickers, the wage for pepper pickers, and employment in the pepper picker labor market?
Demand Wage Employment
(A) Increase increase decrease
(B) Increase decrease increase
(C) Increase increase increase
(D) Increase decrease decrease
(E) Decrease increase decreas
2. The economy is in a recession. And consumer spending for large appliances (such as refrigerators) has fallen. At the factories that produce these large appliances, we expect the demand for workers to _________ and wages for these workers to _________.
(A) Decrease; increase
(B) Decrease; decrease
(C) Increase; increase
(D) Remain unchanged; remain unchanged
(E) Increase; decrease
3. Because the demand for labor is a function of the demand for the goods produced by the labor, labor demand is referred to as
(A) A derived demand
(B) A complementary demand
(C) A perfectly elastic demand
(D) An aggregate demand
(E) An investment demand
4.Which of the following would cause both wages and employment in the market for autoworkers to increase?
(A) A very weak stock market
(B) An increase in the price of gasoline
(C) An increased unemployment rate
(D) A growing size of the labor force
(E) An increase in the demand for cars.
5.If we see that the unemployment rate among carpenters is rising and average wages for carpenters are falling, we might conclude that
(A) Interest rates are falling, making it easier for homebuyers to get an affordable mortgage
(B) Low prices for raw materials like lumber, copper, and cement are causing construction companies to increase building
(C) Tax laws give homeowners an even bigger tax reduction for interest paid on their mortgage
(D) A recession has caused the demand for new homes to fall
(E) Lower taxes have boosted demand for new construction
6.Which of the following would increase the demand for workers who assemble mobile phones?
(A) The wage of these assembly workers decreases.
(B) The demand for mobile phones increases.
(C) The supply of mobile phones decreases.
(D) The wage of these assembly workers increases.
(E) The demand for mobile phones decreases.
7.If a firm hires labor in a competitive labor market and produces in a competitive output market, the firm’s demand for labor is _________ and given by the _________.
(A) Downward sloping; marginal product of labor curve
(B) Upward sloping; value of the marginal product of labor curve
(C) Horizontal; wage
(D) Downward sloping; value of the marginal product of labor curve
(E) Horizontal; market price of output
9.Suppose that Jerry produces crunks and is employing six workers at the current market wage. If market demand for crunks rises and increases the price at which Jerry can sell them, how will this affect Jerry’s demand for labor?
(A) The VMPL curve shifts downward, increasing employment at the current market wage.
(B) The VMPL curve shifts upward, increasing employment at the current market wage.
(C) The VMPL curve shifts upward, decreasing employment at the current market wage.
(D) The VMPL curve shifts downward, decreasing employment at the current market wage.
(E) The VMPL curve does not shift, so employment does not change at the current market wage.
10.Sarah employs labor at wage of $20 and capital at a rate of $10. Currently the marginal product of labor is 5 units and the marginal product of capital is 2 units. Can Sarah adjust her combination of labor and capital to decrease her costs of producing the same level of output?
(A) Yes, she should decrease her employment of both labor and capital.
(B) No. she is already hiring the optimal combination of labor and capital.
(C) Yes, she should increase her employment of labor and decrease her employment of capital.
(D) Yes, she should decrease her employment of labor and increase her employment of capital.
(E) Yes, she should increase her employment of both labor and capital.