ECON 203 – Ch04 Labor and Financial Markets

Ch04 Labor and Financial Markets

Multiple Choice Questions

1. The “law of supply” functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied.

A. price
B. demand
C. supply
D. quantity

Answer: A Reference:

Explanation:

2. As the __________ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left.

A. high-skill labor
B. lower wage
C. technology
D. market

Answer: C Reference:

Explanation:

3. Improvements in the productivity of labor will tend to:

A. decrease wages.
B. decrease the supply of labor.
C. increase wages.
D. increase the supply of labor.

Answer: C Reference:

Explanation:

4. Which of the following will not result in a leftward shift of the market demand curve for labor?

A. a decrease in labor productivity
B. a decrease in demand for the firm’s product
C. an increase in the wage rate
D. a decrease in the firm’s product price

Answer: C Reference:

Explanation:

5. Which of the following results in a rightward shift of the market demand curve for labor?

A. a decrease in labor productivity
B. a decrease in the firm’s product price
C. an increase in the wage rate
D. an increase in demand for the firm’s product

Answer: D Reference:

Explanation:

6. Which of the following will not result in a rightward shift of the market supply curve for labor?

A. a decrease in non-wage income
B. an increase in the working-age population
C. an increase in labor productivity
D. an increase in immigration

Answer: C Reference:

Explanation:

7. If the demand for software engineers __________ slower than does supply, then wages of software engineers will __________.

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