.16..objective.

Question 1 An increase in the wage rate: a) Will usually lead to more people employed b) Will decrease total earnings if the demand for labour is wage elastic c) Is illegal in a free market d) Will cause a shift in the demand for labour Question 2 The Marginal Revenue Product is likely to be wage inelastic if: a) Labour costs are a high percentage of total costs b) Demand for the final product is price inelastic c) It is relatively easy to substitute capital for labour d) There are many substitutes for the final product Question 3 A fall in demand for labour is likely to lead to: a) A lower equilibrium wage and lower quantity of labour employed b) A lower equilibrium wage and higherquantity of labour employed c) A higher equilibrium wage and higher quantity of labour employed d) A higher equilibrium wage and lowerquantity of labour employed Question 4 A decrease in the supply of labour is likely to lead to: a) A lower equilibrium wage and lower quantity of labour employed b) A lower equilibrium wage and higherquantity of labour employed c) A higher equilibrium wage and higher quantity of labour employed d) A higher equilibrium wage and lowerquantity of labour employed Question 5 The Marginal Revenue Product is: a) Upward sloping due to the law of demand b) Upward sloping due to the law of marginal utility c) Downward sloping due to the law of diminishing returns d) Downward sloping due to the law of supply Question 6 A monopsony occurs if there is: a) A major employer of labour b) A highly unionised workforce c) A major provider of employees d) A single seller in a market Question 7 A profit maximizing firm will employ labour up to the point where: a) Marginal revenue = marginal product b) Marginal cost = marginal product c) Marginal revenue product = average cost of labour d) Marginal revenue product = marginalcost of labour Question 8 In a perfectly competitive labour marketfirms are wage takers and the marginal cost of labour equals: a) The average cost of labour b) The marginal product c) The marginal revenue d) The total cost of labour Question 9 If employees cannot accept a job because of the costs of moving this is known as: a) Occupational immobility b) Cyclical unemployment c) Structural immobility d) Geographical immobility Question 10 If the minimum wage is set above the equilibrium wage rate, then other things unchanged: a) There will be equilibrium in the labour market b) There will excess demand in the labour market c) There will be excess supply in the labour market d) More people will be employed