EU29L2

  • 1

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    When labour increases with no change in labour productivity, _________________.

    the PPF shifts outward
    a movement down along the production function occurs
    a movement up along the production function occurs
    the PPF shifts inward

  • 2

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    _______ is the knowledge and skill that people have obtained from education and on-the-job training.

    Human capital
    Capital
    Learning-by-doing
    Technology

  • 3

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    When the real wage rate rises, ___________________.

    the quantity of labour demanded decreases
    the quantity of labour demanded increases
    a shortage of labour increases
    a surplus of labour decreases

  • 4

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    As the quantity of labour employed increases, the _________________.

    marginal product of labour diminishes
    marginal product of labour does not change
    real wage rate rises
    money wage rate rises

  • 5

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    When a rise in the real wage rate occurs, most households will have an _________________.

    income effect that is stronger than the opportunity cost effect
    opportunity cost effect that is equal to the income effect
    opportunity cost effect that is stronger than the income effect
    increase in their labour supply

  • 6

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    When the population increases with no change in labour productivity, potential GDP _______ and potential GDP per hour work _______.

    increases; increases
    decreases; decreases
    increases; decreases
    decreases; increases

  • 7

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    The time spent on job search falls when _______________________.

    the opportunity cost of not working decreases
    unemployment benefits increase
    unemployment benefits decrease
    the efficiency wage is lowered

  • 8

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    Job rationing creates _________________________.

    a decrease in the natural rate of unemployment
    a surplus of jobs
    a surplus of labour
    a wage rate below the equilibrium wage rate

  • 9

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    The efficiency wage _____________________.

    does not motivate employees
    is equal to the minimum wage
    maximizes the firm's profit
    results in a high labour turnover

  • 10

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    A minimum wage ______________________.

    discourages job rationing
    must be set below £5.15 an hour to be effective
    set below the equilibrium wage is effective
    set above the equilibrium wage is effective