ne of the following ways used to reduce or eliminate principal-agent problems are different from

Question

A. Pay for Performance

C. Labor Turnover Model

B. Shirking Model of Efficiency Wages

D. Wage-Productivity Dependence

14. If the minimum wage is set above the equilibrium wage rate in a competitive labor market, then other things being equal:

A. There will be equilibrium in the labor market C

. There will be excess supply in the labor market D. There will be excess demand in the labor market

B. More people will be employed

15. In a particular labor market which has competitive behavior labor supply is Ls 10+w and labor demand is Ed-40-4w, where Eis the level of employment and w is the hourly wage. What is equilibrium

wage rate and level of employment

A. 6 and 16 B. 8 and 2 C32 and 18 D. 18 and 8 E. None

16. Based on question No.15 suppose the government sets a minimum hourly wage of $8. Compared to competitive level, how many workers would lose their jobs and how many additional workers would want

a job at the minimum wage?

A. 6 and 16 B8 and 2 C32 and 18 D. 18 and 8 E. None

17. Marginal revenue product of labor (MRP) refers to the: A. Increase in total revenue resulting from the sale of an additional unit of output

B. Amount by which a firm's total labor cost increases when it employs one more unit of la C. Increase in total revenue resulting from the hire of one more unit of labor

D. Price at which additional units of labor can be employed in a monopsonist labor market 18. If a monopoly is a single seller of output, then a monopsony ist

A. The same as a monopoly only bigger B. A closed shop under government

C. A market with only one buyer of input D. A labor market with a union of workers

Answer questions 19

and 20 by referring the data in the following table

.

Wage rate (Birr)

Quantity

of Marginal

wage Marginal revenue product of labor (MRP) in Birr

labor supplied

cost (

MCL) in Birr

10

10 100

11

17

12

200

13

16

13

300

15

15

14

400

17

14

15

500

19

16

13

600

21

12

Ambo Universi

Answer 1

19. According to the data in the table, what is the equilibrium wage rate and quantity of labor supplied?

A. Wage rate of 14 Birr and quantity of labor supplied of 400

B. Wage rate of 15 Birr and quantity of labor supplied of 500

C. Wage rate of 16 Birr and quantity of labor supplied of 600

D. Wage rate of 17 Birr and quantity of labor supplied of 700

20. Based on the data in the table, at what wage rate would there be excess demand for labor?

A. 10 Birr

B. 11 Birr

C. 12 Birr

D. 13 Birr