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1
Question
2
A)
In the market for labor, demand describes
(1 point)
the relationship between the quantity of labor that workers are willing to provide and the wages they
are willing to accept.
the quantity of labor that workers are willing to provide.
the quantity of labor that firms are willing to hire.
the relationship between the quantity of labor that firms are willing to hire and the wage that they are
willing to pay.
A)
The derived demand for labor comes from the
(1 point)
wages accepted by workers.
difficulty of the labor involved in producing the goods and services.
wages paid to workers.
demand for the goods and services that the labor produces.
Question
3
Question
4
A)
Olivia is considering working a secretary job for a small law firm. Given the opportunity costs ofworking the job, she will not accept a wage less than
$
12
per hour. Which of the following is likelyto raise Olivia's reservation wage?
(1 point)
Olivia learns that employees are paid bonuses at the end of every month.
Olivia learns that the job is more challenging than she initially thought.
Olivia takes on more debt and is struggling to make payments on time.
Olivia has spent all of her savings and is struggling to pay rent.
A)
Which of the following describes the substitution effect?
(1 point)
As wages increase, an individual's leisure becomes more costly, making him less likely to choose
leisure over labor. As the price of Coca Cola rises consumers purchase more Sprite.
As wages increase, an individuals leisure becomes less costly, making him more likely to choose
leisure over labor. As hamburgers becomes cheaper consumers purchase more steak.
As wages increase, an individual's total potential income rises, making him more likely to choose
leisure over labor. A consumer buys more milk each time they purchase cereal.
As wages increase, an individual's total potential income rises, making him less likely to choose
leisure over labor. As a consumer increases their income they purchase more desserts, a normal
good.
Question
5
A)
In response to a lack of qualified nurses in the area, a state government has funded acampaign to increase the number of high school graduates interested in nursing careers. Ifsuccessful, the campaign would
(1 point)
shift the labor supply curve to the right.
shift the labor demand curve to the right.
shift the labor demand curve to the left.
shift the labor supply curve to the left.

1 answer

Here are the answers to each question based on standard economic theories regarding labor markets:

  1. In the market for labor, demand describes:

    • Answer: the relationship between the quantity of labor that firms are willing to hire and the wage that they are willing to pay.

  2. The derived demand for labor comes from the:

    • Answer: demand for the goods and services that the labor produces.

  3. Olivia is considering working a secretary job for a small law firm. Given the opportunity costs of working the job, she will not accept a wage less than $12 per hour. Which of the following is likely to raise Olivia's reservation wage?

    • Answer: Olivia has spent all of her savings and is struggling to pay rent.

    (This suggests an increased need for income, raising her minimum acceptable wage.)

  4. Which of the following describes the substitution effect?

    • Answer: As wages increase, an individual's leisure becomes more costly, making him less likely to choose leisure over labor.

  5. In response to a lack of qualified nurses in the area, a state government has funded a campaign to increase the number of high school graduates interested in nursing careers. If successful, the campaign would:

    • Answer: shift the labor supply curve to the right.

    (This is because more individuals would be entering the nursing profession, increasing the overall supply of labor in that field.)