Question : 21) Refer to Figure 14.3. If this firm pays the : 1381203

21) Refer to Figure 14.3. If this firm pays the efficient wage of $11,

A) the firm’s demand for labor will increase until $11 is also the equilibrium wage.

B) the supply of labor will decrease until $11 is also the equilibrium wage.

C) there will be an excess supply of labor of 2,000.

D) there will be an excess supply of labor of 3,000.

22) Efficiency wage theory suggests that firms may hold wages above the market clearing rate because

A) they believe that the productivity of workers increases with the wage rate.

B) unspoken agreements between workers and firms are in place.

C) it is required by law that they do so.

D) long-term contracts fix wage rates for a period of one to three years.

23) If productivity increases as wages increase and firms pay a wage above the market clearing wage, then

A) these firms will go out of business in the long run because they will not be able to compete with firms paying lower wages.

B) these firms will face an excess demand for labor and will be able to hire the best workers in the market.

C) these firms will have lower profit levels than their competitors.

D) a potential benefit these firms may receive is a reduction in employee turnover.

24) A firm may benefit by paying workers more than the market clearing wage because the higher wages may lead to all of the following EXCEPT

A) lower worker turnover.

B) improved worker morale.

C) reduced shirking of work.

D) reduced taxes.

25) If, as a result of imperfect information, firms set their wage rates below the market clearing wage rate

A) unemployment increases.

B) there will be a surplus of workers.

C) there will be a shortage of workers.

D) there will be equilibrium in the labor market.

26) If, as a result of imperfect information, firms set their wage rates above the market clearing wage rate,

A) unemployment decreases.

B) there will be a surplus of workers.

C) there will be a shortage of workers.

D) there will be equilibrium in the labor market.

27) Minimum wage laws contribute to a higher unemployment rate by

A) raising wages above the market clearing level in some labor markets.

B) pushing wages below the market clearing level in some labor markets.

C) raising wages above the market clearing level in all labor markets.

D) pushing wages below the market clearing level in all labor markets.

28) The minimum wage law contributes to a

A) lower unemployment rate among teenaged workers.

B) lower unemployment rate among adult workers.

C) higher unemployment rate among high skilled workers.

D) higher unemployment rate among teenaged workers.

Refer to the information provided in Figure 14.4 below to answer the questions that follow.

Figure 14.4

29) Refer to Figure 14.4. A minimum wage of $12

A) will lead to unemployment of 10.

B) will lead to unemployment of 20.

C) will lead to unemployment of 40.

D) will have no effect because the minimum wage is set above the equilibrium wage and for a minimum wage to have any effect on the labor market it must be below the equilibrium wage.

30) Refer to Figure 14.4. A minimum wage of $8

A) will lead to an excess demand for labor of 20.

B) will lead to an excess demand for labor of 40.

C) will lead to an excess demand for labor of 60.

D) will have no effect because the minimum wage is set below the equilibrium wage and for a minimum wage to have any effect on the labor market it must be above the equilibrium wage.