Question : 31) The figure above shows the market for fast food : 1240950

 

 

 

 

 

31) The figure above shows the market for fast food restaurant employees in a college town in a small nation to the East. The local Taco Bell pays its workers $12 an hour. This wage rate is

A) an efficiency wage aimed at reducing employee turnover.

B) designed reduce the unemployment rate.

C) an effort to increase the demand for labor.

D) the actual equilibrium wage rate.

E) illegal because the equilibrium wage rate is $6 an hour.

32) The figure above shows the labor market in a small town. If the government imposes a wage of $10 that firms must at least pay,

A) the government has imposed a minimum wage and market forces are not allowed to work.

B) the government has imposed an efficiency wage.

C) job search will decrease.

D) job rationing will decrease.

E) inflation will occur as wages rise.

 

33) The figure above shows the labor market in a small town. If the government imposes ________ that firms must at least pay, the effect will be ________ because ________.

A) a minimum wage of $10; an increase in unemployment; a surplus of labor is created

B) a minimum wage of $10; a decrease in unemployment; a shortage of labor is created

C) an efficiency wage of $10; a decrease in unemployment; a surplus of labor is created

D) an efficiency wage of $10; an increase in unemployment; a shortage of labor is created

E) a minimum wage of $10; no change in unemployment; it will not affect how firms demand labor

 

34) To increase workers’ incomes, the City of New York’s government set a wage below which it is illegal for employers to pay employees. This wage is referred to as the

A) minimum wage.

B) efficiency wage.

C) government wage.

D) union wage.

E) city wage.

35) A minimum wage rate that is set ________ the equilibrium real wage rate creates a ________ of labor.

A) above; surplus

B) above; shortage

C) below; surplus

D) below; shortage

E) equal to; shortage

 

36) If the minimum wage rate is set above the equilibrium wage rate, then

A) unemployment definitely increases.

B) unemployment definitely decreases.

C) unemployment definitely does not change.

D) unemployment either decreases or does not change.

E) None of the above answers is correct because the minimum wage decreases search but its effect on unemployment is ambiguous.

 

37) The minimum wage is a

A) possible cause of job search because it lowers wages below their equilibrium.

B) possible cause of job rationing because it lowers wages below their equilibrium.

C) government established highest wage that is legal to pay.

D) possible cause of job rationing because it raises wages above their equilibrium.

E) factor that decreases unemployment because fewer people search for work if the minimum wage is increased.

38) A minimum wage set above the equilibrium wage rate

A) increases the natural unemployment rate.

B) increases the demand for labor.

C) increases the number of workers employed.

D) decreases job rationing.

E) decreases the natural unemployment rate because fewer workers will become unemployed.

 

39) Which of the following will increase the natural unemployment rate?

i.a minimum wage set above the equilibrium wage rate

ii.efficiency wages

iii.union-negotiated wages

A) i only

B) i and ii

C) i and iii only

D) ii and iii only

E) i, ii and iii

 

40) If the minimum wage is set

A) below the equilibrium wage rate, it will create unemployment.

B) above the equilibrium wage rate, it will create unemployment.

C) equal to the equilibrium wage rate, it will create a shortage of labor.

D) below the equilibrium wage rate, it will create a shortage of labor.

E) equal to the equilibrium wage rate, it will create a surplus of labor.

 

41) According to the above table, if the minimum wage is set at $20 per hour, then

A) there is an excess demand for labor.

B) the quantity of labor supplied exceeds the quantity of labor demanded by 50 million hours per month.

C) the quantity of labor demanded will increase until it is equal to the quantity of labor supplied.

D) the labor demand curve will shift until $20 is the new equilibrium real wage rate.

E) the labor supply curve will shift until $20 is the new equilibrium real wage rate.

 

 

42) The table above gives the labor market for a small foreign economy. Equilibrium in the labor market occurs at a real wage rate of

A) $7.15 per hour.

B) $7.65 per hour.

C) $8.00 per hour.

D) $8.50 per hour.

E) $9.00 per hour.

43) The table above gives the labor market for a small foreign economy. A minimum wage law that sets the minimum wage at $8.50 per hour produces

A) equilibrium in the labor market.

B) a labor surplus of 25 million hours.

C) a labor shortage of 25 million hours.

D) a labor surplus of $0.50 per hour.

E) a labor surplus of 65 million hours.

 

44) The table above gives the labor market for a small foreign economy. A(n) ________ would create ________.

A) minimum wage of $5.00; an increase in job rationing.

B) union-negotiated wage of $7.50; unemployment and job rationing.

C) efficiency wage of $8.00; unemployment and job rationing.

D) efficiency wage of $9.00; an increase in job rationing.

E) minimum wage of $9.00; a decrease in job search.