Economics multiple choice

1. As the price of a resource (e.g., labor) decreases,
a) demand for that resource increases
b) the quantity demanded of that resource decreases
c) the supply of that resource increases
d) producers are more willing and able to hire that resource

2. One determinant of the derived demand for a resource is the
a) price of the product made using the resource
b) extra cost of the resource
c) marginal resource cost of the resource
d) availability of the resource in the marketplace

3. A temporary price differential in resource markets is
a) eliminated by resource movements
b) caused by a failure of firms to maximize profits
c) eliminated by resources moving from highly-valued uses to lower-valued uses
d) caused by Congress increasing the federal minimum wage

4. The division of a resource's earnings between economic rent and opportunity cost depends on the resource owner's
a) elasticity of labor supply
b) price elasticity of labor demand
c) income elasticity of labor demand
d) cross-price elasticity of demand

5. A profit-maximizing firm will employ a resource up to the point where
a) its marginal resource cost equals its marginal revenue product
b) its marginal resource cost equals its marginal product
c) its marginal resource cost equals the marginal revenue of the output
d) its marginal resource cost equals the price of the resource

6. The quantity of labor an individual supplies to any market
a) never increases as the market wage rate rises
b) is contingent upon the wage rates offered in other labor markets
c) always decreases as the market wage rate rises
d) could never be zero over the realistic range of wage rates

7. People who can earn higher market wages, other things constant, will
a) provide more labor to nonmarket work
b) be more inclined to supply their labor to market work than to nonmarket work
c) be more inclined to supply their labor to nonmarket work than to market work
d) provide more labor to nonmarket work even if the market can provide the services more cheaply

8. At a low wage rate,
a) there is no substitution effect
b) there is no income effect
c) the substitution effect usually outweighs the income effect
d) the income effect usually outweighs the substitution effect

9. Through collective bargaining,
a) representatives of an employer negotiate with the rank and file of the union membership
b) union and nonunion members combine forces in negotiation
c) craft and industrial unions combine forces in negotiation
d) contracts are worked out between representatives of the union and employer representatives

10. If union demands result in a surplus of labor in some industries, the resulting
a) increased demand for labor in the nonunion sector drives nonunion wages up
b) decreased demand for labor in the nonunion sector drives nonunion wages down
c) increased supply of labor in the nonunion sector drives nonunion wages down
d) increased supply of labor in the nonunion sector drives nonunion wages up