Question

The demand curve for labor:

A) slopes downward.

B) is based on the marginal revenue product of labor.

C) shows the amount of labor that will be demanded at any given wage.

D) all of the above.

Which of the following factors, in addition to income, might be considered by an individual deciding to enter a labor market?

A) Location.

B) Long-term gains.

C) Psychological rewards.

D) All of the above.

A decrease in the equilibrium wage rate and equilibrium quantity of workers in a labor market would be caused by:

A) a decrease in labor supply.

B) an increase in labor supply.

C) a decrease in labor demand.

D) an increase in labor demand.

The basic supply and demand model predicts that a decrease in labor demand will shift the demand curve to the:

A) left and reduce wages.

B) left and increase wages.

C) right and reduce wages.

D) right and increase wages.

If labor supply decreases and labor demand increases, we should expect that:

A) wages will increase.

B) wages will decrease.

C) employment will increase.

D) employment will decrease.

Which of the following would NOT cause a supply curve of labor to shift?

A) Demographic trends.

B) Changes in the wage rate.

C) Cyclical changes in economic conditions.

D) Changing expectations of future job prospects.

Answer 1

1. A.) Slopes downwards

The demand curve is downward sloping due to the law of diminishing returns; as more workers are hired, the marginal product of labor begins declining, causing the marginal revenue product of labor to fall as well.

2. D.) All of the above

The factors that individual consider by an deciding a labor market are location, long term gains and Psychological rewards.

3. D.) An increase in labor demand

If the wages and salaries decrease, employers are more likely to hire a greater number of workers. But when the labor Supply decreases then the demand for the labor Supply increases.

4. A) left and reduce wages.

If the wages and salaries decrease, employers are more likely to hire a greater number of workers. The quantity of labor demanded will increase, resulting in a downward movement along the demand curve.

5. A.) Wages will increase

As when more demand of labor and less Supply it will lead to increase in wages

6. C) Cyclical changes in economic conditions

the cost of resources used to produce a good increases, sellers will be less inclined to supply the same quantity at a given price, and the supply curve will shift to the left. Technology - technological advances that increase production efficiency shift the supply curve to the right.