1.What has been the greatest cause of economic inequality in recent years?
Inequality in wages
2. Which of following factors is the primary reason for the Great Divergence in the United States?
Widening wage gap between middle and top earners.
3. Which type of worker will contribute proportionally more to firm profit?
The workers demanded more because of the difference between marginal productivity and marginal cost.
4. An improvement in the available technology may result in _______________.
All of these answers
5. Which of the following is equivalent to the marginal revenue product of labor?
The marginal product of labor multiplied by the price of output
6. If the demand for labor increases and the supply of labor remains unchanged, what will happen to the wage rate?
Wages will increase
7. A warehouse adopts a new technological innovation, and the wages and quantity of workers at the warehouse increase. What must be true about the technology?
It increases the productivity of labor
8. Capital costs in a country decreases. Which of the following will occur due to this shift in factor price?
All of these answers.
9. Which of these may be a topic of collective bargaining between a union and an employer?
All of these answers
10. A factory is an example of which type of factor of production?
Capital.
11. The law of diminishing returns states that ______________.
adding more of one factor of production eventually yields smaller increases in output
12. Imagine that a newspaper that employs five journalists is able to publish 50 articles a week. It then hires a sixth journalist and its production increases to 54 articles per week. What is the marginal product of labor?
4 articles
13. A worker takes a position in a dangerous area and receives hazard pay. This is an example of which of the following wage differentials?
Compensating differential
14. A competitive employer will hire additional labor as long as:
MRPL exceeds the wage rate
15. Which of these is true about the backward-bending supply curve of labor theory?
At low wage levels the substitution effect dominates the income effect
16. Economic costs include _______________.
accounting costs plus opportunity costs
17. The production function gives the relationship between:
a given combination of inputs and all possible levels of output
18. Which type of worker will gain proportionally more of the total income?
The workers demanded more because of the difference between marginal productivity and marginal cost.
19. Which of the following are variable costs?
Employee wages and raw materials
20. How do economic profit and accounting profit differ?
Economic profit includes implicit (opportunity) costs and accounting profit does not.
21. Total cost is equal to ___________.
Fixed cost plus variable cost
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