Question : 71) An increase in the real wage rate ________ the : 1228333

71) An increase in the real wage rate ________ the quantity of labor demanded and ________ the quantity of labor supplied.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) does not change; does not change

72) The demand for labor curve is

A) a vertical line because firms have to hire labor.

B) upward sloping, showing that as the real wage rate increases, more workers are hired.

C) a horizontal line because we assume that the real wage rate is fixed.

D) downward sloping, showing that the quantity of labor demanded increases when the real wage falls.

E) U-shaped.

73) A firm’s demand for labor depends on the

A) nominal wage rate because it pays workers in dollars.

B) real wage rate, which equals the nominal wage divided by the price level.

C) real wage rate, which equals the nominal wage divided by the hours worked.

D) nominal wage rate, which equals the real wage divided by the price level.

E) supply of labor.

74) The quantity of labor demanded by a firm depends upon

A) the nominal wage rate not the real wage rate.

B) the real wage rate not the nominal wage rate.

C) both the real wage rate and the nominal wage rate.

D) neither the real wage rate nor the nominal wage rate.

E) either the real wage rate or the nominal wage rate, depending whether the price level is increasing or decreasing.

75) A firm hires labor up to the point where the

A) real wage rate equals the nominal wage rate.

B) additional hour of labor produces extra output that equals the real wage rate.

C) additional hour of labor produces extra output that equals the nominal wage rate.

D) firm can sell the extra output.

E) real wage rate exceeds the nominal wage rate.

76) Firms hire more labor as long as

A) the real wage rate is less than the additional output the labor produces.

B) the real wage rate is greater than the additional output the labor produces.

C) extra labor will produce more output.

D) the nominal wage rate exceeds the real wage rate.

E) the nominal wage rate is less than the real wage rate.

77) As long as an additional worker hired by a firm produces

A) more output than the real wage rate, the firm will hire that worker.

B) more output than the real wage rate, the firm will not hire that worker.

C) less output than the real wage rate, the firm will hire that worker.

D) some output, the firm will hire that worker.

E) more output than the nominal wage rate, the firm will hire that worker.

78) Hershey Chocolate Factory pays a money wage rate equal to $30 per hour and sells its candy bars for $1.50 each. Hershey Chocolate Factory should hire labor until an additional unit of labor produces ________ candy bars an hour.

A) 45

B) 1.5

C) 20

D) 30

E) 10

79) The Bubby Gum factory produces bubble gum. Joanne is one of the employees, and she produce 10 packs of bubble gum per hour. Joanne’s money wage rate is $12 per hour. Based on this information, the Bubby Gum company should

A) keep Joanne because she creates a profit for the firm.

B) fire Joanne because she creates a loss for the firm.

C) decrease Joanne’s wage rate because she is paid too much.

D) increase its demand for labor.

E) None of the above answers are correct because more information about Joanne’s real wage is needed to decide what to do.

80) The Bubby Gum factory produces bubble gum. Joanne is one of the employees, and she produces 10 packs of bubble gum per hour. Joanne’s money wage rate is $12 per hour. If a packet of bubble gum sells for $1.00, then

A) Joanne is creating a $2.00 per hour loss for the firm.

B) Joanne is creating a $2.00 per hour profit for the firm.

C) the Bubby Gum company should decrease the price of the bubble gum so it sells more and makes a larger profit.

D) the Bubby Gum company should pay Joanne more.

E) None of the above answers are correct because more information about Joanne’s real wage is needed to decide what to do.