An \"efficiency wage\" describes a wage rate that is: A) Above the equilibrium w

Question

An "efficiency wage" describes a wage rate that is:
A) Above the equilibrium wage and is paid in order to provide workers with an incentive to perform efficiently.
B) Efficient because it is exactly equal to the wage rate implied by the marginal productivity theory.
C) Determined by collective bargaining between unions and management.
D) Equal to the VMPL adjusted to make the structure of compensation more equitable.


Benny employs people to sell candy bars at intersections. The marginal product of the last worker Benny hired is 20
Candy bars per hour. Benny pays $7 per worker per hour, and sells the candy bars for $ I each. If the price of candy
Bars rises to $2.00, then:
A) The demand for labour increases.
B) The demand for Labour decreases.
C) The quantity demanded of labour increases, but the demand for labour curve does not shift,
D) The quantity demanded of labour decreases, but the demand for labour curve does not shift.


Phil's Photo studio pays its workers $60 per day and sells photos for $10 per print. Now the market wage rises to $70.
What happens to Phil's labour demand?
A) The demand for labour increases.
B) The demand for labour decreases.
C) The quantity demanded of labour increases, but the demand for labour curve does not shift.
D) The quantity demanded of labour decreases, but the demand for labour curve does not shift



Market structures are categorized by the following two criteria:
A) The number of firms and the size of the firms.
B) Whether or not products are differentiated and the extent of advertising.
C) The number of firms and whether products are differentiated'
D) The size of the firms and the extent of advertising.


The following are four differences between monopoly and perfect competition. Which of these is CORRECT?
A) A monopolist has market power while a perfect competitor does not'
B) Unlike a perfectly competitive firm, a monopoly can make positive economic profits in the long run,
C) A monopoly will charge a higher price and produce a smaller quantity than a competitive market with the same demand and cost structure.
D) All of the above are connect.


Compared to a perfectly competitive industry, a monopolist:
A) Produces a large quantity,
B) Charges a higher price.
C) Increases consumer surplus.
D) Does all of the above.



Suppose the cross-price elasticity between demand for Burger King burgers and the price of McDonald's burgers is 0.8.
If McDonald's increases the price of its burgers by 1096, then:
A) Burger King will sell 10% more burgers.
B) Burger King will sell 8% more burgers.
C) Burger King will sell 8% fewer burgers.
D) We cannot tell what will happen to Burger King, but McDonald's will sell 8?6 fewer burgers.


Suppose the price of cereal rose by 25Yo and the quantity of milk sold decreased by 50%. Then we know the:
A) cross-price elasticity between cereal and milk is -2.
B) cross-price elasticity between cereal and milk is -0.5.
C) Price elasticity of demand for milk is 2.
D) cross-price elasticity of demand for milk is 2.
Egg producers know that the elasticity of demand for eggs is 0.1. If they want to increase sales by 5%, they will have to lower price by:
.A) 01%
B) 1%
c) 5%
D) 50%






Which of the following is a barrier to entry?
A) Control of scarce resources
B) Economies of scale
C) government-created such as patents and copyrights
D) all of the above


Suppose the province of Saskatchewan in conjunction with The Canadian Wheat Board creates a price floor in the Market for wheat. If the floor is set below the current market-clearing price for wheat, then:
A) The price floor will keep prices artificially low.
B) The price floor will increase the quality of the good.
C) The price floor will have no effect on the equilibrium price of wheat.
D) None of the above will occur.



Rapidly increasing rental costs have been a major political concern since at least 1992. Suppose that to control rising Rental costs the government sets the maximum price for a normal apartment at $600, but the current market price is $800. Then:
A) More people will try to get an apartment, but fewer units will be available.
B) The same number of people will try to get an apartment, and fewer units will be available.
C) More people will be able to get an apartment, since the price is lower.
D) Fewer people will try to get an apartment, and fewer units will be available.




Andre Cummings, the production manager of Electric Designs, has asked his boss for a pay raise. His boss is Concerned that if he increases Andre's salary, Andre might work less. In other words, Andre's boss is concerned that leisure is a normal good for Andre and that his:
A) Income and substitution effects might move in the same direction.
B) Income effect might be greater than his substitution effect.
C) Substitution effect might be greater than his income effect.
D) Income and substitution effects might cancel out to zero.


An increase in wealth:
A) Will cause the labour supply curve to shift leftward, if leisure is a normal good.
B) Will cause the labour supply curve to be upward sloping, if leisure is an inferior good.
C) Will cause the labour supply curve to be backward bending, if income effect outweighs the substitution effect of a Change in wealth and leisure is a normal good.



One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a demand curve, while the purely competitive firm has a
A) downward-sloping; perfectly elastic
B) Perfectly inelastic; perfectly elastic
C) downward-sloping; perfectly inelastic
D) Perfectly elastic; downward-sloping Demand curve,




Suppose the National Assembly, the governing body in Quebec, imposes a price ceiling of $ 10 per month for cheque account charges. If the average market-clearing price for monthly cheque accounts charges is $5, then:
A) The price ceiling will keep prices artificially low.
B) The price ceiling will increase the quality of the good.
C) The price ceiling will not be binding in this instance.
D) None of the above will occur


The "quota rent" refers to:
A) The difference between the demand price and the supply price at the quota limit.
B) The rent received by landlords who own rent-controlled apartments.
C) The opportunity cost of using a quota-controlled service, or of buying a good that is subject to an import quota,
D) The minimum rent that the owner of a building must receive before he/she is willing to rent out the building,


Diamond rings are relatively scarce because;
A) According to geologists, diamonds are less common than any other gem-quality colored stone.
B) The demand for diamonds is so high.
C) DeBeers limits the quantity of diamonds supplied to the market,
D) Of all of the above.

Explanation / Answer

A B B C D A C C B D D A A C A D A

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