Question : 14.2   The Classical View of the Labor Market 1) The shape : 1381485

 

14.2   The Classical View of the Labor Market

 

1) The shape of the short run aggregate supply curve is impacted by changes in the

A) money market.

B) labor market.

C) goods market.

D) financial market.

2) According to ________ economists, the only types of unemployment that exist in an economy are structural and frictional unemployment.

A) classical

B) Keynesian

C) monetarist

D) Marxist

 

3) According to classical economists, ________ unemployment does not persist in the economy because wages will always adjust to ensure equilibrium in the labor market.

A) excessive

B) structural

C) frictional

D) the natural rate of

 

Refer to the information provided in Figure 14.1 below to answer the questions that follow.

 

 

Figure 14.1

 

4) Refer to Figure 14.1. Suppose there is an increase in the fertility rate and this causes some men and women to place a higher value on their time spent in non-market activities. This will cause

A) the labor supply curve to shift to the left of S.

B) the labor supply curve to shift to the right of S.

C) the labor demand curve to shift from D to D’.

D) the labor demand curve to shift from D’ to D.

5) Refer to Figure 14.1. If the demand for labor ________ and wages are sticky on the downward side, there will be unemployment of 150 million.

A) falls from D to D’

B) rises from D’ to D

C) remains at D’

D) falls from D

 

6) Refer to Figure 14.1. The demand for labor falls from D to D’. If firms enter into social, or implicit, contracts with workers not to cut wages, then the wage rate will ________ and employment will ________.

A) remain at $10; fall to 150 million

B) remain at $10; fall to 200 million

C) fall to $8; remain at 300 million

D) fall to $8; fall to 200 million

 

7) One way to reduce employee turnover is to pay efficiency wages

A) at the equilibrium wage.

B) below the equilibrium wage.

C) at the going market wage.

D) above the equilibrium wage.

Refer to the information provided in Figure 14.2 below to answer the questions that follow.

 

 

Figure 14.2

 

8) Refer to Figure 14.2. The equilibrium number of people employed is ________ million people and the equilibrium wage rate is $________.

A) 270; 15

B) 210; 9

C) 180; 6

D) 150; 15

 

9) Refer to Figure 14.2. At a wage rate of $________, there is a surplus of labor equal to ________ million people.

A) 6; 60

B) 6; 180

C) 15; 150

D) 15; 120

10) Refer to Figure 14.2. At a wage rate of $________ , there is a shortage of labor equal to ________ million people.

A) 6; 60

B) 6; 180

C) 15; 150

D) 15; 120

 

11) Refer to Figure 14.2. According to classical economists, if the wage rate is $15 the wage rate will ________ to eliminate the ________.

A) decline; surplus

B) decline; shortage

C) increase; surplus

D) increase; shortage

 

12) Refer to Figure 14.2. If the value people put on their leisure time increases, the equilibrium wage rate

A) could change from $9 to $6.

B) could change from $9 to $15.

C) would stay at $15.

D) would increase to $15.

 

13) Refer to Figure 14.2. If the productivity of workers decreases, the equilibrium wage rate

A) could change from $9 to $6.

B) could change from $9 to $15.

C) would stay at $15.

D) would increase to $15.