Question : 21) Doug currently not employed. He places a value of : 1381199

21) Doug is currently not employed. He places a value of $16 an hour on his time in nonmarket activities. If Doug is offered a job paying $12 an hour,

A) he should supply 0 hours in the labor market.

B) he should supply a positive number of hours in the labor market and allocate no time to nonmarket activities.

C) he is indifferent between supplying hours to the labor market and using his time in nonmarket activities.

D) he should supply a positive number of hours in the labor market and to nonmarket activities.

22) John is contemplating whether he should take a job offered to him. John should

A) not take the job if the value of his leisure is less than the wage rate the job pays.

B) not take the job if the value of his leisure is greater than the wage rate the job pays.

C) not take the job if taking the job implies he will enjoy less leisure.

D) take the job if taking the job implies he will enjoy more leisure.

23) A new policy is implemented that guarantees every adult an annual income of $10,000 whether they work or not. This will most likely shift the

A) labor demand curve to the right.

B) labor supply curve to the left.

C) labor supply curve to the right.

D) labor demand curve to the left.

24) The government lowers the marginal income tax rates so that after-tax wages are increased. This most likely will shift the labor

A) supply curve to the right.

B) supply curve to the left.

C) demand curve to the right.

D) demand curve to the left.

25) If a new governmental policy increases unemployment benefits, we would expect the labor ________ curve to shift to the ________.

A) supply; right

B) demand; right

C) supply; left

D) demand; left

26) One of the tenets of the classical view of the labor market is that the wage adjustments that are necessary to clear the labor market

A) occur very infrequently.

B) occur quickly.

C) don’t occur.

D) occur slowly.

27) If firms start offering more employment benefits, such as more stock options and a better dental plan, we would expect the labor ________ curve to shift to the ________.

A) demand; right

B) demand; left

C) supply; right

D) supply; left

28) The classical view of the labor market is basically consistent with the assumption of ________ aggregate supply curve.

A) a horizontal (or almost horizontal)

B) a downward-sloping

C) an upward-sloping

D) a vertical (or almost vertical)

29) Classical economists believe that the aggregate supply curve is vertical because

A) wages are flexible and they always change to clear the labor market.

B) the labor market is always in equilibrium.

C) people who are not working are those who have chosen not to work at the prevailing wage rate.

D) all of the above

30) According to the classical theory, an expansionary monetary policy ________ the price level and ________ output in the long run.

A) decreases; increases

B) increases; doesn’t change

C) increases; increases

D) doesn’t change; doesn’t change