Econ102_Exam2_V1_Winter08

Econ102_Exam2_V1_Winter08 - Winter Semester 2008 Economics...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Winter Semester 2008 Form 1 1 Economics 102 – Principles of Economics II Department of Economics – University of Michigan Examination No. 2 – Section 200 Circle the correct answer for each of the following questions . 1. Your form number is A) 1 B) 2 C) 3 D) 4 2. You observe that the unemployment rate has declined. Which of the following possibilities could explain this empirical observation? A) The economy has entered a recession. B) The proportion of young people aged 16-19 in the labor force has grown. C) The proportion of minorities in the labor force has grown. D) The proportion of females aged 20 and over in the labor force has grown. 3. Ignoring taxes, a household making its labor supply decision should work more if A) the increase in its welfare from an additional unit of leisure exceeds the real wage rate. B) the real wage rate exceeds the increase in its welfare from an additional unit of leisure. C) its productivity in the firm exceeds the real wage rate. D) its productivity in the firm is less than the real wage rate. 4. Frictional unemployment arises when A) firms set an efficiency wage above the equilibrium real wage. B) people change jobs by quitting or when they are re-entrants or new entrants in the labor market. C) the minimum wage causes the real wage to be above its equilibrium level. D) technical progress causes a firm to cease operation causing its workers to become unemployed. 5. When the real wage rate rises, a household in making its labor supply decision will A) work more due to the income effect. B) work less due to the income effect. C) substitute leisure for labor supply because leisure has become cheaper. D) work less due to the substitution effect. 6. Which of the following is (are) unaffected by the discouraged worker phenomenon? A) Only the unemployment rate B) Both the unemployment rate and the employment-to-population ratio C) Only the employment-to-population ratio D) Both the unemployment rate and the labor force participation rate 7. A firm choosing its labor force maximizes profits when A) after-tax marginal revenue is less than the nominal wage rate. B) marginal revenue is less than the after-tax nominal wage rate C) after-tax marginal revenue equals the nominal wage rate. D) The marginal product of labor equals the nominal wage rate. (OVER)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Winter Semester 2008 Form 1 2 Figure 1 8. In Figure 1, the displayed shift in labor demand could be caused by A) an increase in the firm’s capital stock. B)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

Econ102_Exam2_V1_Winter08 - Winter Semester 2008 Economics...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online