1. American adults of working age work on average 35-40 % more hours per week th
ID: 1118689 • Letter: 1
Question
1. American adults of working age work on average 35-40 % more hours per week than their counterparts in France and Germany. All of the following have been mentioned by researchers as possible explanations, except:
a. Higher payroll and incomes taxes applied to both workers and firms.
b. A greater inherent laziness among the French and the Germans.
c. Extensive regulations regarding working and employment practices.
d. Social interactions between workers during time allocated to leisure.
2. What has empirical research on the incidence of the payroll tax found?
a. That most of the burden falls upon workers
b. That there is no burden at all because the tax is free
c. That most of the burden falls upon firms
d. That payroll taxes are indeed "job killers", as claimed by economic conservatives.
3. If the labour market is perfectly competitive, labour demand function is given by ND = a + bW and labour supply function is given by NS = c + dW; W is the wage rate. After imposing a payroll tax T, market equilibrium wage rate will be:
a. lower than before the tax, and workers pay b/(b - d) share of the tax.
b. lower than before the tax, and the firm pays b/(b - d) share of the tax.
c. higher than before the tax, and the firm pays b/(b - d) share of the tax.
d. equal to its level before the tax.
4. Which of the following statements regarding the demand for labour is false?
a. If a firm is a monopsonist in the labour market, the firm's supply curve for labour is not perfectly elastic.
b. If a firm is a monopolist in the product market, the firm's demand curve is more elastic than it would be if the firm were operating in a perfectly competitive product market.
c. If a firm is a monopolist in the product market, it may still behave as a wage taker in the labour market.
d. If the firm is an monopolist in the product market, the firm's demand curve is flatter than it would be if the firm were operating in a perfectly competitive product market.
5. Which of the following statements is true in regarding to the marginal cost of labour?
a. is derived from the marginal revenue product curve.
b. shows the increase in revenue received by the firm if it hires one more worker.
c. is equal to the wage paid if the firm is a monopsonist.
d. is the same as the supply curve of labour for a monopsonist.
Explanation / Answer
1. c , Germany and France have working laws which are workers friendly and mandates a minimum number of working hours .
2 d, Payroll taxes are job killers and conservatives also argue for reducing the payroll taxes.
4..d , because in both industry both firms will have downward sloping demand curve.
5. c, wage paid is equal to Marginal Cost of hiring one more unit of labour .
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