Practice Questions
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In a labor supply and demand graph, what is structural unemployment primarily caused by?
Structural unemployment happens when people's skills don't match the jobs that are open. Other options are incorrect because Some people think that se...
In a labor market, if there is a significant increase in demand for goods produced by a certain industry, what is likely to happen to the equilibrium wage and employment levels in that industry?
When more people want to buy goods, companies need to make more. Other options are incorrect because This answer suggests that both pay and jobs would...
How does government intervention typically affect structural unemployment in the labor supply and demand graph?
Government rules, like minimum wage laws, can make it hard for some people to get jobs. Other options are incorrect because Some might think that incr...
In a labor market graph, what happens to the equilibrium wage if the labor force participation rate increases, assuming demand remains constant?
When more people want to work, the supply of labor goes up. Other options are incorrect because Some might think that more workers means lower wages; ...
In a labor market graph illustrating the equilibrium wage and employment level, how might a government intervention aimed at increasing the labor force participation rate affect the supply and demand curves?
When the government helps more people join the workforce, the supply of workers increases. Other options are incorrect because This option suggests th...
In a labor supply and demand graph, what happens to the equilibrium wage when there is an increase in the demand for labor?
When more companies want to hire workers, they compete for employees. Other options are incorrect because Some might think that more demand means lowe...
In a labor supply and demand graph, what happens to the equilibrium wage when the demand for labor increases while the supply remains constant?
When more companies want to hire workers, they offer higher wages to attract them. Other options are incorrect because Some might think that more dema...
What occurs at the equilibrium wage in the labor market?
At the equilibrium wage, the amount of workers wanting jobs matches the number of jobs available. Other options are incorrect because A surplus means ...
A firm is deciding how many workers to hire based on the MRPL and the marginal factor cost. Which of the following scenarios best illustrates the equilibrium point in a perfectly competitive labor market?
A firm hires workers until the MRPL equals the marginal factor cost. Other options are incorrect because This option suggests hiring based on average ...
In a perfectly competitive labor market, what does the intersection of the labor supply and demand curves indicate?
The point where supply and demand meet shows the wage and number of workers. Other options are incorrect because Some might think this shows the highe...
A technology company is experiencing a sudden increase in demand for its products, leading to a need for additional skilled labor. Assuming the labor market is perfectly competitive, how would this shift in demand for labor affect the equilibrium wage rate and the number of workers hired by the company? Consider the implications on the marginal revenue product of labor (MRPL) and marginal factor cost.
When demand for products goes up, companies need more workers. Other options are incorrect because This suggests that higher costs lead to fewer worke...
In a perfectly competitive labor market, the equilibrium wage is determined where the marginal revenue product of labor (MRPL) equals the __________.
The marginal factor cost is the cost of hiring one more worker. Other options are incorrect because Some might think marginal cost of labor is the sam...
Arrange the following steps in the correct sequence to analyze the labor market equilibrium in a perfectly competitive labor market: A) Identify the intersection point of the labor supply and demand curves; B) Determine the marginal revenue product of labor; C) Analyze the equilibrium wage rate and number of workers hired; D) Plot the labor supply and demand curves on a graph.
First, you plot the supply and demand curves. Other options are incorrect because This option suggests starting with the intersection point; This opti...
If a firm's labor supply curve is horizontal, what does this indicate about the wage rate and employment level?
A horizontal labor supply curve means that the wage stays the same no matter how many workers are hired. Other options are incorrect because Some migh...
Labor supply is to the number of workers available as the marginal revenue product of labor (MRPL) is to what?
The MRPL shows how much money a worker can make for a company. Other options are incorrect because Some might think MRPL is about total output, but it...
If a firm observes an increase in the equilibrium wage rate in a perfectly competitive labor market, what is the most likely underlying cause of this change?
When more people want to buy a firm's products, the firm needs more workers. Other options are incorrect because Some might think fewer workers means ...
Which of the following statements accurately describe the relationship between labor supply and demand in a perfectly competitive labor market? Select all that apply.
Other options are incorrect because The labor supply curve usually goes up, meaning more workers want jobs when pay is higher; The MRPL shows how much...
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