1. the demand for the product of labour declines

2. the price of substitute input falls

3. the productivity of labour increases

4. the minimum wage increases

5. None of the above.

C

32. Mandating fringe benefits (such as health insurance) for all workers would most likely:

1. increase both labor supply and demand.

2. decrease both labor supply and demand.

3. increase labor supply and decrease labor demand.

4. increase labor supply and have no impact on labor demand.

5. decrease labor demand and have no impact on labor supply

C

33. Assume that the government imposes a minimum wage in a perfectly competitive labor market where the equilibrium wage was below the new minimum. Which of the following will be the expected effect on employment and total wage payments?

Employment Total Wage Payments

1. Decrease Increase

2. Decrease Decrease

3. Decrease Might either increase or decrease

4. Increase Increase

5. Increase Might either increase or decrease

C

34. A backward-bending labor supply curve would mean that:

1. the income effect dominates the substitution effect.

2. the substitution effect dominates the income effect.

3. both effects are negative.

4. Both effects are positive.

5. None of the above.

A

35. A firm that produces good X and sells it in the perfectly competitive market and maximizing should

1. hire labour as long as its marginal product is above its wage under imperfect competition in the labour market

2. hire labour as long as its marginal product is above its wage under perfect competition in the labour market

3. hire labour as long as its marginal product multiplied by price of X is above its marginal cost of labour under imperfect competition in the labour market

4. hire labour as long as its marginal product multiplied by price of X is above its wage under perfect competition in the labour market

5. more than one answer is correct

D

36. A firm uses two resource inputs, the prices of which are the same. In order to minimize costs the firm should use

1. equal amounts of the inputs

2. amounts of the inputs such that the marginal physical product of each is maximized

3. amounts of the inputs such that the total product of each is maximized

4. amounts of the inputs such that their marginal physical products are equal

5. any one of the inputs

D

37. The firm is considering investment which will cost it $100 today, but will bring revenues of $50 at the end of the first year, $50 at the end of the second year,and can be sold for $50 in the end of the 2^nd year. Given that the market rate of interest of 30% the firm

1. should undertake this investment

2. should undertake this investment only if it has $ 100 readily available and does not have to borrow this money from the bank

3. should not undertake this investment

4. should undertake this investment only if it can reinvest the revenue

5. not enough information to answer the question

C

(проверить числа)

38.A change in which of the following will NOT cause a shift in the demand curve for a factor of production?

1. Demand for the goods produced by the factor

2. Prices of the goods produced by the factor

3. Prices of substitute factors

4. Supply of the factor

5. Supply of substitute factors

D

39.Taxes on externality-producing activities

A) are designed to eliminate externalities.

B) will lead to a zero level of output.

C) are simply meant to force economic agents to consider the full costs

of their actions.

D) are designed primarily as a way to raise money so that the government

can compensate the victims of the externality.

E) may have no effect on the output decision

C

40. Demand for capital is downward sloping because