Question 1 We often think of technology and labor as substitutes...

Question 1

1. We often think of technology and labor as substitutes for each other, but technology can lead to the hiring of more labor if it:

   	A.	decreases the compensating differential.
   	B.	decreases the average total cost of production.
   	C.	increases the marginal product of labor.
   	D.	increases the opportunity cost of labor.

Question 2

1. The general rule of hiring workers is to hire:

   	A.	the most productive workers, regardless of the wage.
   	B.	educated workers before noneducated workers.
   	C.	workers if they contribute more to the firms' revenues than the firm's costs.
   	D.	workers if their marginal product of labor is less than or equal to the wage.

Question 3

1. A high demand for labor in one industry will:

   	A.	decrease the number of hours worked in that industry.
   	B.	cause a shortage of workers.
   	C.	cause a surplus of workers.
   	D.	attract workers from another industry.

Question 4

1. Which of the following is most likely to improve the productivity of workers?

   	A.	investment in human capital labor market issues
   	B.	federal legislation mandating benefits
   	C.	an increase in the minimum wage
   	D.	an increase in unionization

Question 5

1. The supply of nurses in country A is the same as the supply in country B, but the nurses in country A earn 90% more than the nurses in country B. What can explain this difference?

   	A.	Although the labor supplies are equal across the two countries, the labor supply curve in country A is downward sloping.
   	B.	The labor demand curve for nurses in country A is upward sloping.
   	C.	Country A's economy is more productive than country B's, so the demand for nurses is higher in country A.
   	D.	Country A uses relatively more doctors than nurses to treat patients than country B.

Question 6

1. Suppose all students received the average grade on exams, regardless of how well each person did. What is the most likely grade each student will get (assume a very large class)?

   	A.	a higher grade than what they would get under conventional grading
   	B.	zero or near zero points
   	C.	about what they would get under conventional grading
   	D.	a slightly lower grade than what they would get under conventional grading

Question 7

1. Advertising is a way for club goods to be given away free.

    True

    False