Quiz 508

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Quiz 508

1. Which of the following is not correct?

a. Frictional unemployment results from the process of matching workers and jobs.
b. Structural unemployment results when the number of jobs is insufficient for the number of
workers.
c. Minimum wages are the predominant reason for unemployment in the U.S. economy.
d. When a minimum-wage law forces the wage to remain above the level that balances supply
and demand, it raises the quantity of labor supplied and reduces the quantity of labor demanded
compared to the equilibrium level.

2. Minimum-wage laws
a. create unemployment.
b. do not apply in states with right-to-work laws.
c. affect highly-educated workers more than high school dropouts.
d. cause labor shortages, which further raise wages above equilibrium.

3. Minimum-wage laws
a. reduce unemployment.
b. cause labor shortages, which further raise wages above equilibrium.
c. affect highly-educated workers more than high school dropouts.
d. None of the above is correct.

4. Minimum wages create unemployment in markets where they create a

a. shortage of labor. Unemployment of this type is called frictional.
b. shortage of labor. Unemployment of this type is called structural.
c. surplus of labor. Unemployment of this type is called frictional.
d. surplus of labor. Unemployment of this type is called structural.

5. Minimum wages create unemployment in markets where they create a

a. shortage of labor. Minimum wage laws are not the predominant reason for unemployment in
the U.S.
b. shortage of labor. Minimum wage laws are the predominant reason for unemployment in the
U.S.
c. surplus of labor. Minimum wage laws are not the predominant reason for unemployment in the
U.S.
d. surplus of labor. Minimum wage laws are the predominant reason for unemployment in the
U.S.

6. When a minimum-wage law forces the wage to remain above the equilibrium level, the result
is
a. both a shortage of labor and a shortage of jobs.
b. a shortage of labor and a surplus of jobs.
c. a surplus of labor and a shortage of jobs.
d. both surplus of labor and a surplus of jobs.

7. When a minimum-wage law forces the wage to remain above the equilibrium level, it
a. raises both the quantity of labor supplied and the quantity of labor demanded compared to the
equilibrium level.
b. raises the quantity of labor supplied and reduces the quantity of labor demanded compared to
the equilibrium level.
c. reduces the quantity of labor supplied and raises the quantity of labor demanded compared to
the equilibrium level.
d. reduces both the quantity of labor supplied and the quantity of labor demanded compared to
the equilibrium level.

8. Minimum-wage laws can keep wages

a. above equilibrium and cause a surplus of labor.
b. above equilibrium and cause a shortage of labor.
c. below equilibrium and cause a surplus of labor.
d. below equilibrium and cause a shortage of labor.

9. An increase in the minimum wage

a. increases both the quantity demanded and the quantity supplied of labor.
b. decreases both the quantity demanded and the quantity supplied of labor.
c. increases the quantity of labor demanded but decreases the quantity of labor supplied.
d. decreases the quantity of labor demanded but increases the quantity of labor supplied.

10. An increase in the minimum wage

a. reduces structural unemployment.
b. reduces frictional unemployment,
c. increases structural unemployment.
d. increases frictional unemployment.

11. If the minimum wage is currently above the equilibrium wage, then a decrease in the
minimum wage
a. increases both the quantity demanded and the quantity supplied of labor.
b. decreases both the quantity demanded and the quantity supplied of labor.
c. increases the quantity of labor demanded but decreases the quantity of labor supplied.
d. decreases the quantity of labor demanded but increases the quantity of labor supplied.

12. If the minimum wage were currently above the equilibrium wage, then a decrease in the
minimum wage that kept it above the equilibrium wage would
a. increase the surplus of labor.
b. reduce the surplus of labor.
c. increase the shortage of labor.
d. reduce the shortage of labor,

Table 28-7
Below is data about the labor market in the city of Productionville.
Wage Quantity Demanded Quantity Supplied
$8 6,000 16,000
$7 9,000 14,000
$6 12,000 12,000
$5 15,000 10,000
$4 18,000 8,000

13. Refer to Table 28-7. If the local government imposed a minimum wage of $4 in
Productionville, how many people would be unemployed?
a. 0
b. 2,000
c. 3,000
d. 10,000

14. Refer to Table 28-7. If the local government imposed a minimum wage of $5 in
Productionville, how many people would be unemployed?
a. 0
b. 2,000
c. 3,000
d. 5,000

15. Refer to Table 28-7. If the local government imposed a minimum wage of $6 in
Productionville, how many people would be unemployed?
a. 0
b. 2,000
c. 3,000
d. 5,000

16. Refer to Table 28-7. If the local government imposed a minimum wage of $7 in
Productionville, how many people would be unemployed?
a. 0
b. 2,000
c. 5,000
d. 10,000

17. Refer to Table 28-7. If the local government imposed a minimum wage of $8 in
Productionville, how many people would be unemployed?
a. 0
b. 2,000
c. 5,000
d. 10,000

Table 28-8
Below is data about the labor market in the state of Northwoods.
Wage Quantity Demanded Quantity Supplied
$10 80,000 120,000
$9 90,000 110,000
$8 100,000 100,000
$7 110,000 90,000
$6 120,000 80,000

18. Refer to Table 28-8. If the state government imposed a minimum wage of $8, how many
people would be unemployed?
a. 0
b. 10,000
c. 20,000
d. 40,000

19. Refer to Table 28-8. If the state government imposed a minimum wage of $9, how many
people would be unemployed?
a. 0
b. 10,000
c. 20,000
d. 40,000

20. Refer to Table 28-8. If the state government imposed a minimum wage of $10, how many
people would be unemployed?
a. 0
b. 10,000
c. 20,000
d. 40,000

Figure 28-3

21. Refer to Figure 28-3. At the equilibrium wage, how many workers are unemployed?
a. 0
b. 4,000
c. 5,000
d. 8,000

22. Refer to Figure 28-3. At the equilibrium wage, how many workers are employed?
a. 0
b. 1,000
c. 5,000
d. 9,000

23. Refer to Figure 28-3. If the government imposes a minimum wage of $4, how many workers
will be unemployed?
a. 0
b. 3,000
c. 4,000
d. 7,000

24. Refer to Figure 28-3. If the government imposes a minimum wage of $4, how many workers
will be employed?
a. 3,000
b. 4,000
c. 5,000
d. 7,000

25. Refer to Figure 28-3. If the government imposes a minimum wage of $4, then unemployment
will increase by
a. 0 workers.
b. 2,000 workers.
c. 4,000 workers.
d. 5,000 workers.

26. Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment
will decrease by
a. 0 workers.
b. 2,000 workers.
c. 3,000 workers.
d. 4,000 workers.

27. Refer to Figure 28-3. If the government imposes a minimum wage of $8, then how many
workers will be unemployed?
a. 0
b. 3,000
c. 4,000
d. 7,000

28. Refer to Figure 28-3. If the government imposes a minimum wage of $8, then how many
workers will be employed?
a. 3,000
b. 4,000
c. 5,000
d. 7,000

29. Refer to Figure 28-3. If the government imposes a minimum wage of $8, then unemployment
will increase by
a. 0 workers.
b. 2,000 workers.
c. 4,000 workers.
d. 7,000 workers.

30. Refer to Figure 28-3. If the government imposes a minimum wage of $8, then employment
will decrease by
a. 0 workers.
b. 2,000 workers.
c. 3,000 workers.
d. 4,000 workers.

31. Refer to Figure 28-3. If unemployment is 2,000 workers, then the minimum wage must be
a. $4.
b. $5.
c. $7.
d. $8.

Figure 28-4

32. Refer to Figure 28-4. If the government imposes a minimum wage of $4, how many workers
will be unemployed?
a. 0
b. 4,000
c. 6,000
d. 12,000

33. Refer to Figure 28-4. If the government imposes a minimum wage of $6, how many workers
will be unemployed?
a. 0
b. 4,000
c. 8,000
d. 12,000

34. Refer to Figure 28-4. If the government imposes a minimum wage of $8, how many workers
will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 8,000

35. Refer to Figure 28-4. If the government imposes a minimum wage of $10, how many
workers will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 8,000

36. Refer to Figure 28-4. If the government imposes a minimum wage of $12, how many
workers will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 10,000

37. Refer to Figure 28-4. If the government imposes a minimum wage of $16, how many
workers will be unemployed?
a. 0
b. 4,000
c. 8,000
d. 12,000

38. Refer to Figure 28-4. If 4,000 workers are unemployed, then the minimum wage must be
a. $6
b. $8.
c. $12.
d. $14.

39. Refer to Figure 28-4. If 12,000 workers are unemployed, then the minimum wage must be
a. $4.
b. $6.
c. $14
d. $16.

40. Refer to Figure 28-4. If 8,000 workers are unemployed, then the minimum wage must be
a. $6
b. $8
c. $12.
d. $14.

Figure 28-5

41. Refer to Figure 28-5. If the minimum wage is set at $125, then
a. the quantity of labor demanded will equal 20.
b. the quantity of labor supplied will equal 35.
c. the surplus of labor will equal 25.
d. unemployment will equal 10.

42. Minimum-wage laws are most likely to affect the wages paid to
a. teenagers.
b. people with advanced technical training.
c. people who are self-employed.
d. union members.

43. Minimum-wage laws are least likely to affect the wages paid to
a. teenagers.
b. low-skill workers.
c. inexperienced workers.
d. highly-educated workers.

44. If the wage is kept above the equilibrium wage for any reason, the result is
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.

45. Wages in excess of their equilibrium level help explain

a. frictional but not structural unemployment.
b. structural but not frictional unemployment.
c. both frictional and structural unemployment.
d. neither frictional nor structural unemployment.

46. Wages in excess of their equilibrium level help explain

a. structural unemployment but not the natural rate of unemployment.
b. the natural rate of unemployment but not structural unemployment.
c. both structural unemployment and the natural rate of unemployment.
d. neither structural unemployment nor the natural rate of unemployment.

47. Other things the same, an increase in wages above their equilibrium level
a. increases frictional unemployment but leaves the natural rate of unemployment unchanged.
b. increases frictional unemployment and increases the natural rate of unemployment.
c. increases structural unemployment but leaves the natural rate of unemployment unchanged.
d. increases structural unemployment and increases the natural rate of unemployment.

48. When the wage is above the equilibrium level,

a. the labor market is functioning more efficiently than it otherwise would function.
b. there is a shortage of labor.
c. the quantity of labor supplied exceeds the quantity of labor demanded.
d. job search is the primary explanation for the unemployment that is observed.
49. Workers searching for jobs that best suit them is most closely associated with
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.

50. Workers waiting for jobs to open up is most closely associated with
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.