Economics MCQs

Page No. 233

If the real wage is too high in the labour market ?


aThe quantity demanded of labour is higher than the quantity supplied


bThe quantity demanded of labour equals the quantity supplied


cThe quantity demanded of labour is lower than the quantity supplied


dIt will automatically adjust in the short run to bring equilibrium



Supply side policies are most appropriate to cure ?


aInvoluntary unemployment


bCyclical unemployment


c Voluntary unemployment


d A fall in aggregate demand



If the minimum wage is set above the equilibrium wage rate, then another thing unchanged ?


aThere will be equilibrium in the labour market


bThere will excess demand in the labour market


cThere will be excess supply in the labour market


dMore people will be employed



In a perfectly competitive labour market firms are wage takers and the marginal cost of labour equals?


aThe average cost of labour


bThe marginal product


c The marginal revenue


d The total cost of labour



Demand for labour is more likely to be wage inelastic if ?


aWages are a small proportion of total costs


bDemand for the final product is price elastic


cIt is easy to replace labour


dCapital is a good substitute for labour



A decrease in the supply of labour is likely to lead to ?


a A lower equilibrium wage and lower quantity of labour


bA lower equilibrium wage and higher quantity of labour


c A higher equilibrium wage and higher quantity of labour


dA higher equilibrium wage and lower quantity of labour



The Marginal Revenue Product is likely to be wage inelastic if ?


aLabour costs are a high percentage of total costs


bDemand for the final product is price inelastic


cIt is relatively easy to substitute capital for labour


dThere are many substitutes for the final product



IF Unemployment insurance were so generous that it paid laid off workers 95 percent of their regular salary ?


aFrictional Unemployment would fall


bThe official unemployment rate would probably understate true unemployment


cThe official unemployment rate would probably overstate true unemployment


dNone of these answers



Which of the following types of unemployment will exist even if the wage is at the competitive equilibrium ?


aUnemployment due to unions


bUnemployment due to efficiency wages


cFrictional Unemployment


d Unemployment due to minimum-wage laws



Which of the following statements about efficiency wage theory is true ?


aPaying above the competitive equilibrium wage tends to cause workers to shirk their responsibilities


bFirms do not have a choice about whether they pay efficiency wages or not because these wages are determined by law


cPaying the lowest possible wage is always the most efficient (Profitable)


dPaying above the competitive equilibrium wage may improve worker health lower worker turnover improve worker quality and increase worker effort



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