Question : 21) The figure above shows the labor market in a : 1239125

21) The figure above shows the labor market in a region. If a minimum wage of $8 an hour is imposed, then the quantity of labor supplied is ________ and the quantity of labor demanded is ________.

A) 60,000; 60,000

B) 80,000; 40,000

C) 40,000; 60,000

D) 60,000; 40,000

E) 40,000; 40,000

22) The figure above shows the labor market in a region. In which of the following cases would the amount of unemployment be the largest?

A) when the market is at its equilibrium, with no minimum wage

B) when a minimum wage of $4 an hour is imposed

C) when a minimum wage of $6 an hour is imposed

D) when a minimum wage of $8 an hour is imposed

E) None of the above because the market will adjust so that there is no unemployment.

23) One result of the minimum wage is

A) a black market for labor that pays more than the minimum wage.

B) a black market for labor that pays less than the minimum wage.

C) decreased job search activity.

D) a decrease in unemployment among poor and unskilled workers.

E) an increase in employment among poor and unskilled workers.

24) One result of a minimum wage is

A) illegal hiring of people at wages below the minimum wage.

B) more people with jobs.

C) a change in the equilibrium wage.

D) lower costs paid by firms.

E) fewer people searching for work because they realize that firms have decreased the number of people hired.

25) A minimum wage law

A) lowers the wage rate of workers who are able to get a job.

B) increases employment.

C) increases the time spent searching by workers who cannot find a job.

D) creates efficiency in the labor market.

E) must be set below the equilibrium wage rate in order to have an impact.

26) An increase in the minimum wage to $15 per hour would lead to

A) an increase in search activity for many workers.

B) a decrease in search activity for many workers.

C) a decrease in unemployment.

D) no change in unemployment.

E) no change in employment.

27) Suppose the marginal benefit the owner of a cherry orchard derives from hiring Lauren to pick cherries is $8 per hour. If the wage rate that Lauren earns is $7 per hour, then the orchard owner’s surplus from Lauren’s labor is ________ per hour.

A) $7

B) $15

C) $1

D) $8

E) $0

28) An efficient allocation of labor occurs when the

A) marginal benefit to workers exceeds the marginal benefit to firms.

B) marginal benefit to firms exceeds the marginal benefit to workers.

C) marginal cost to workers is equal to the marginal benefit to firms.

D) marginal cost and marginal benefit of both workers and the firms are equal to zero.

E) marginal benefit of workers exceeds the marginal cost to firms by as much as possible.

29) If the minimum wage is set above the equilibrium wage, after taking into account the resources lost in job search, the firms’ surplus ________ and the workers’ surplus ________.

A) increases; increases

B) increases; decreases.

C) decreases; increases

D) decreases; decreases

E) does not change; decreases

30) A minimum wage set above the equilibrium wage

A) decreases the deadweight loss in the market.

B) decreases the workers’ surplus because workers must spend resources looking for jobs.

C) increases the firm’s surplus.

D) increases the market’s efficiency.

E) has no effect on the market.