Question 1

Economists rank various methods of redistribution:

Accepted Answer

A)  by their ability to minimize the adverse consequences in terms of efficiency.
B)  according to their ethical content.
C)  using the Pareto efficiency criterion.
D)  according to their implicit degree of fairness.E) A) and C)
F) None of the above

Question 2

Which of the factors below does not influence the distribution of income?

Accepted Answer

A)  government policies such as minimum wage
B)  the presence of labour markets
C)  preferences of the actors involved
D)  the distribution of talentE) A) and D)
F) A) and C)

Question 3

The topping- up mechanism:

Accepted Answer

A)  insures Pareto optimality.
B)  is the most efficient transfer mechanism available.
C)  is also called the negative income tax.
D)  is a version of the welfare system.E) C) and D)
F) None of the above

Question 4

Discuss the nature of the inefficiency of the topping- up system.

Accepted Answer

In the case of the standard welfare syst...

Question 5

The challenge facing redistributionists is to redistribute income:

Accepted Answer

A)  in the face of entrenched interests.
B)  as quickly as possible.
C)  in a society of apathetic voters.
D)  while reducing adverse efficiency effects.E) A) and C)
F) C) and D)

Question 6

An efficient transfer mechanism:

Accepted Answer

A)  attempts to transfer as much income as possible.
B)  is not redistributional in nature.
C)  is an income- maintenance institution.
D)  is necessarily Pareto optimal.E) A) and C)
F) A) and B)

Question 7

Most labour markets are characterized by:

Accepted Answer

A)  mechanisms similar to the ones operating in the markets for superstars.
B)  pricing at marginal cost.
C)  incomes constrained by the ability to produce large volumes of goods and services.
D)  perfect competition.E) A) and B)
F) None of the above

Question 8

The size of everyone's slice of the economic pie is determined by:

Accepted Answer

A)  input endowments.
B)  input endowments and prices.
C)  prices formed in the input markets.
D)  tradition.E) None of the above
F) A) and B)

Question 9

The link between the redistribution and efficiency:

Accepted Answer

A)  is weak.
B)  is in the purview of political scientists, not economists.
C)  is not analyzed by economists.
D)  represents a tradeoff.E) B) and C)
F) A) and D)

Question 10

A potential explanation for wage differences between men and women is that most employers have a preference from the workers. if that explanation is correct which of the following would not be true?

Accepted Answer

A)  Women will self select into firms that don't discriminate
B)  the marginal product of female labor would rise
C)  As female labor force participation increased the gap between wages would increase
D)  Firms are maximizing profitsE) C) and D)
F) A) and D)

Question 11

Historical records suggest that that the Black Death of the 14th and 15th centuries

Accepted Answer

A)  decreased labor productivity
B)  increased labor productivity
C)  reduced labor's share of output
D)  caused a shift of wealth from peasants to landownersE) None of the above
F) B) and D)

Question 12

A monopsonist uses only labor (L)to produce her output (Q)which she sells in a competitive market at the fixed price P=3. The production function is Q=15L2- 0.2L3 and the labor supply function is w=144+23.4L.
a)Determine the profit- maximizing values of L, Q, and w.
b)Explain why you have chosen the answer that maximizes profit instead of one that minimizes it.

Accepted Answer

a)L = 20 (not L = 4), Q= 4400,...

Question 13

Explain why wage differentials based solely on discrimination is inconsistent with profit maximizing behavior.

Accepted Answer

If women are paid a wage rate below the ...

Question 14

Which of the following are not determinants of income distribution?

Accepted Answer

A)  preferences
B)  fairness
C)  human capital investments
D)  luckE) B) and C)
F) C) and D)

Question 15

The markets playing the most important role in the distribution of income are:

Accepted Answer

A)  the money market.
B)  the political markets.
C)  the goods & services market.
D)  the input markets.E) A) and D)
F) B) and D)

Question 16

Martina has the following utility function: U(C, L)= (CL)1/2 where C is the quantity of goods consumed and L is the number of hours of leisure. Martina requires eight hours of rest each day. Therefore she has 16 hours available for work. Let H be the number of hours employed such that H = 16 - L. Let P be the price of C and W be the hourly wage.
i)Assume she is required to pay an income tax of T = 0.3( Y - 60)where Y is her pretax income. How many hours per day will she work at P = $1 and W = $10?
ii)Assume there is no income tax but her terms of employment change. She is now paid time and a half for work in excess of 6 hours per day. How many hours per day will she choose to work at P = $1, W = $10, and overtime of W' = $15?

Accepted Answer

i)When P = 1 and W = 10 then L...

Question 17

Suppose that the equilibrium wage in the low- skilled labor market is $6.25 per hour. Further, suppose the federal government raises the minimum wage to $6.00 an hour from its present level of
$5.15. The government's action of increasing the minimum wage will result in:

Accepted Answer

A)  a shortage of low- skilled labor.
B)  an increase in unemployment.
C)  a decrease in unemployment.
D)  neither a shortage nor a surplus of labor in the low- skilled labor market.E) None of the above
F) A) and D)

Question 18

In competitive markets, economic actors are paid the value of their marginal product. Does this mean that markets are more important in determining the level of income than sheer talent?

Accepted Answer

In market economies, it is the demand an...

Question 19

Minimum wages typically apply to unskilled workers. Which of the following would lead unionized workers to push for higher minimum wages

Accepted Answer

A)  higher minimum wages mean union workers provide less effort
B)  excess supply in one market is accompanied by excess demand in another
C)  unionize workers try to do what's best for all workers
D)  higher minimum wages cause inflation and push- up union wagesE) B) and D)
F) A) and C)

Question 20

The current prevalence of the market for superstars:

Accepted Answer

A)  is the proliferation of large networks.
B)  cannot be explained by economists.
C)  is a passing fad.
D)  is consistent with the advent of the internet.E) A) and D)
F) All of the above

Exam 12: Labour Market Applications

Correct Answer
verified
i)When P = 1 and W = 10 then L...
View Answer

In competitive markets, economic actors are paid the value of their marginal product. Does this mean that markets are more important in determining the level of income than sheer talent?

Correct Answer
verified
In market economies, it is the demand an...
View Answer

The current prevalence of the market for superstars:

Correct Answer
verified

The topping- up mechanism:

Correct Answer
verified

Which of the factors below does not influence the distribution of income?

Correct Answer
verified

Discuss the nature of the inefficiency of the topping- up system.

Correct Answer
verified
In the case of the standard welfare syst...
View Answer

The markets playing the most important role in the distribution of income are:

Correct Answer
verified

The size of everyone's slice of the economic pie is determined by:

Correct Answer
verified

The challenge facing redistributionists is to redistribute income:

Correct Answer
verified

A potential explanation for wage differences between men and women is that most employers have a preference from the workers. if that explanation is correct which of the following would not be true?

Correct Answer
verified

Suppose that the equilibrium wage in the low- skilled labor market is $6.25 per hour. Further, suppose the federal government raises the minimum wage to $6.00 an hour from its present level of $5.15. The government's action of increasing the minimum wage will result in:

Correct Answer
verified

Historical records suggest that that the Black Death of the 14th and 15th centuries

Correct Answer
verified

The link between the redistribution and efficiency:

Correct Answer
verified

Which of the following are not determinants of income distribution?

Correct Answer
verified

An efficient transfer mechanism:

Correct Answer
verified

Correct Answer
verified
a)L = 20 (not L = 4), Q= 4400,...
View Answer

Minimum wages typically apply to unskilled workers. Which of the following would lead unionized workers to push for higher minimum wages

Correct Answer
verified

Explain why wage differentials based solely on discrimination is inconsistent with profit maximizing behavior.

Correct Answer
verified
If women are paid a wage rate below the ...
View Answer

Economists rank various methods of redistribution:

Correct Answer
verified

Most labour markets are characterized by:

Correct Answer
verified

Exam 12: Labour Market Applications

Correct Answerverifiedi)When P = 1 and W = 10 then L...View AnswerShow Answer

In competitive markets, economic actors are paid the value of their marginal product. Does this mean that markets are more important in determining the level of income than sheer talent?

Correct AnswerverifiedIn market economies, it is the demand an...View AnswerShow Answer

The current prevalence of the market for superstars:

Correct AnswerverifiedShow Answer

The topping- up mechanism:

Correct AnswerverifiedShow Answer

Which of the factors below does not influence the distribution of income?

Correct AnswerverifiedShow Answer

Discuss the nature of the inefficiency of the topping- up system.

Correct AnswerverifiedIn the case of the standard welfare syst...View AnswerShow Answer

The markets playing the most important role in the distribution of income are:

Correct AnswerverifiedShow Answer

The size of everyone's slice of the economic pie is determined by:

Correct AnswerverifiedShow Answer

The challenge facing redistributionists is to redistribute income:

Correct AnswerverifiedShow Answer

A potential explanation for wage differences between men and women is that most employers have a preference from the workers. if that explanation is correct which of the following would not be true?

Correct AnswerverifiedShow Answer

Suppose that the equilibrium wage in the low- skilled labor market is $6.25 per hour. Further, suppose the federal government raises the minimum wage to $6.00 an hour from its present level of $5.15. The government's action of increasing the minimum wage will result in:

Correct AnswerverifiedShow Answer

Historical records suggest that that the Black Death of the 14th and 15th centuries

Correct AnswerverifiedShow Answer

The link between the redistribution and efficiency:

Correct AnswerverifiedShow Answer

Which of the following are not determinants of income distribution?

Correct AnswerverifiedShow Answer

An efficient transfer mechanism:

Correct AnswerverifiedShow Answer

Correct Answerverifieda)L = 20 (not L = 4), Q= 4400,...View AnswerShow Answer

Minimum wages typically apply to unskilled workers. Which of the following would lead unionized workers to push for higher minimum wages

Correct AnswerverifiedShow Answer

Explain why wage differentials based solely on discrimination is inconsistent with profit maximizing behavior.

Correct AnswerverifiedIf women are paid a wage rate below the ...View AnswerShow Answer

Economists rank various methods of redistribution:

Correct AnswerverifiedShow Answer

Most labour markets are characterized by:

Correct AnswerverifiedShow Answer

Correct Answer
verified
i)When P = 1 and W = 10 then L...
View Answer

Correct Answer
verified
In market economies, it is the demand an...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In the case of the standard welfare syst...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a)L = 20 (not L = 4), Q= 4400,...
View Answer

Correct Answer
verified

Correct Answer
verified
If women are paid a wage rate below the ...
View Answer

Correct Answer
verified

Correct Answer
verified