Economics 12E - Arnold - TB_301 - 127 Refer to Exhibit 27-7 The exhibit shows two markets in which labor of identical skills is employed Assume that

Economics 12E - Arnold - TB_301 - 127 Refer to Exhibit 27-7...

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127. Refer to Exhibit 27-7. The exhibit shows two markets in which labor of identical skills is employed. Assume that both markets are in equilibrium with Q1and Q2quantities of labor employed at the respective prices of $4 and $6 per unit. If this equilibrium persists in the long run, an economist would suspect thata. nonpecuniary benefits are higher in market A.b. nonpecuniary benefits are higher in market B.c. there is discrimination in market A.d. there is no cost of moving across markets.e. b and cANSWER: aPOINTS: 1DIFFICULTY: ChallengingNATIONAL STANDARDS: United States - BUSPROG: AnalyticLOCAL STANDARDS: United States - OH - Default City - DISC: Labor marketsKEYWORDS: Bloom's: Application128. A profit maximizing firm that is a price taker in both product and factor markets will hire afactor up to the point at whichPOINTS: 1DIFFICULTY: ModerateNATIONAL STANDARDS: United States - BUSPROG: AnalyticLOCAL STANDARDS: United States - OH - Default City - DISC: Labor marketsKEYWORDS: Bloom's: Application129. If the market supply of labor increases, the total wage income will increase if thePOINTS: 1
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DIFFICULTY: ModerateNATIONAL STANDARDS: United States - BUSPROG: AnalyticLOCAL STANDARDS: United States - OH - Default City - DISC: Labor marketsKEYWORDS: Bloom's: Application
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