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Zestaw-7-Labour Economics Labour Economics History of Economic Thought General Economics SET 7-B Labour Economics 1. A perfectly competitive labour market is a market: A. with no frictions or costs related to job search B. where workers and firms are perfectly informed about wages and vacancies offered by other firms C. with costs related to job search D. answers A and B are correct E. answers B and C are correct 2. In a certain country there are 50 million people, in that 30 million are employed, 5 million are unemployed and 15 million are inactive. What is the employment rate? A. 35% B. 50% C. 60% D. 70% E. it is not possible to calculate it based on data above 3. In the monopsony: A. the fewer employees the monopsony wants to hire, the more the salary increases B. the number of employees in the monopsony has no impact on wages C. there are few people on the market who want to work D. the more employees the monopsony wants to hire, the more the salary increases E. real salaries are fixed (do not change) 4. In a competitive labour market a minimum wage set above the market clearing level: A. tends to reduce unemployment and increase the market wage B. tends to reduce employment and decrease the market wage C. tends to reduce employment and increase the market wage D. tends to increase employment and decrease the market wage E. has no effect on employment or market wage 1 Labour Economics History of Economic Thought General Economics 5. Under collective bargaining of the right-to-manage type: A. wages will be higher the stronger the bargaining power of employers, and the stronger the responsiveness of labour demand and of profits to wages B. employment will be higher than without collective bargaining C. wages will be higher the higher GDP per capita D. employment will be higher the higher GDP per capita E. wages will be higher the stronger the bargaining power of trade unions, and the lower the responsiveness of labour demand and of profits to wages 6. Why is unemployment insurance not provided by private insurance companies? A. because of moral hazard and adverse selection B. because of lack of demand for such an insurance C. due to a prohibition on advertising for such a product D. because such an insurance would compete with sickness insurance E. nobody knows, why 7. What part of the sentence is missing: „People working in the shadow economy … registered as unemployed.”? A. are never B. could be C. always are D. do not know if they can be E. none answer is correct 8. Dominating income effect means that when wages increase: A. labour supply decreases (assuming that leisure is a normal good) B. labour supply increases (assuming that leisure is a normal good) C. labour demand increases D. labour demand decreases E. labour demand is equal to labour supply 9. Persons neither working nor looking for a job are: A. employed B. unemployed C. entrepreneurs D. inactive E. poor 2 Labour Economics History of Economic Thought General Economics 10. Active labour market policies (ALMP) do not include: A. trainings B. programmes supporting the employment of graduates C. subsidized employment D. employment services E. all the above are included in ALMP 11. The insider-outsider model explains involuntary unemployment by: A. higher bargaining power of employees than unemployed persons, due to the labour turnover costs B. the willingness of employers to pay too much to their employees C. business cycle D. too high minimum wage E. unemployment benefits 12. „Homogenous workforce”: A. means that no women are included B. adapts to demand shocks C. is a workforce with majority of older workers D. consists of unemployed persons and workers with the same characteristics and productivity E. consists of persons differing in productivity 3 Labour Economics History of Economic Thought General Economics History of Economic Thought 13. It is assumed that the classical period in economics covers the years: A. 1939-1945 B. 1960-2008 C. 1776-1890 D. 1500-1700 E. the whole period before Christ 14. Who presented his own ideas on capital and interest theory, arguing, among others, that present goods are, as a rule, worth more than future goods of a like kind and number? A. Adam Smith B. Thomas Malthus C. David Ricardo D. John Stuart Mill E. Eugen von Böhm-Bawerk 15. John R. Commons is classified as: A. classical economist B. neoclassical economist C. orthodox economist D. heterodox economist E. Austrian School economist 4 Labour Economics History of Economic Thought General Economics General Economics 16. Below is information on the price elasticity of demand for five goods. For which of them will the percentage drop in demand be greatest when the price increases by 10%? A. –1.44 B. –0.78 C. –1.26 D. –0.18 E. –1 17. The introduction of the price ceiling (the maximum price) below the market equilibrium price leads to: A. excess supply B. a decrease in demand C. an increase in output D. excess demand E. an increase in the price paid by consumers 18. Consumer’s nominal income is 4000 PLN per month. The consumer purchases 12 cinema tickets (market price 200 PLN) and 24 pizzas (market price 50 PLN) per month. Which of the following statements is true? A. the consumer saves 200 PLN per month B. the consumer cannot increase utility from consumption C. the current consumption bundle is on the consumer’s budget line D. the number of tickets purchased can be increased without reducing the consumption of pizzas E. the consumer’s consumption expenditures are equal to his nominal income 19. If the indifference curves have a typical convex shape, then the substitution effect of a price change: A. causes an increase in consumption of a good whose price has raised B. causes a decrease in consumption of a good whose price has fallen C. causes an increase in consumption of a good whose price has fallen D. does not change consumption of a good whose price has raised E. does not change consumption of a good whose price has fallen 5 Labour Economics History of Economic Thought General Economics 20. The income elasticity of demand for good X is 0.5 and the income elasticity of demand for good Y is 2.5. The income expansion path for a consumer who has the option of buying only these two goods is (in a coordinate system where the quantity of X is plotted on the horizontal axis and the quantity of Y on the vertical axis): A. downward-sloping B. horizontal C. vertical D. upward-sloping E. horizontal at the beginning, and then downward-sloping 21. In the current period, the consumer works and earns 50000 $. In the future period, the consumer will retire and his retirement benefits will be equal to 30000 $. In the current period, the market interest rate at which the consumer can take a loan equals 25%. The maximum level of consumer’s total spending in the current period is (in $): A. 80000 B. more than 80000 C. less than 50000 D. 50000 E. less than 80000 22. The following statements refer to marginal revenue of a monopoly (which does not price discriminate). Which one is correct? A. marginal revenue is the same for each level of output B. for each level of output, marginal revenue is equal to price C. for each level of output, marginal revenue is equal to marginal cost D. marginal revenue increases with output E. for each level of output, marginal revenue is lower than price 23. For the firm’s current level of output, marginal cost is equal to the average total cost. It means that: A. the firm is in economic optimum (profit maximization / loss minimization) B. average variable cost is minimized C. the firm makes economic loss D. average total cost is minimized E. total cost is minimized 6 Labour Economics History of Economic Thought General Economics 24. For the current level of output of the perfectly competitive firm, price is equal to marginal cost and average total cost. Which statement is correct? A. the firm is not in economic optimum B. the firm makes economic loss C. the firm makes only normal profit D. the firm can further reduce average total cost E. the firm makes both normal and supernormal (economic) profit 25. For the current level of output of the monopoly, marginal revenue, long-run average total cost and long-run marginal cost are equal to 20 $. What long-run decision should be made by the firm? A. to exit the industry B. to continue producing the current level of output C. to increase output and to decrease price D. to decrease output and to increase price E. only to increase price 26. Which of the following is not an oligopoly model? A. the Tiebout model B. the Cournot model C. the Stackelberg model D. the Bertrand model E. the kinked demand curve model 27. Which statement about Nash equilibrium is correct? A. if players do not have a dominant strategy, there is no Nash equilibrium B. there can be maximum one Nash equilibrium in a game C. in Nash equilibrium, players do not want to change unilaterally their strategies D. in the prisoner’s dilemma game, there is no Nash equilibrium E. each Nash equilibrium is Pareto optimal 28. For the firm that is a monopsony in the labor market and a monopoly in the output market, the condition for the optimal level of employment is (MCL – marginal cost of labor; MRPL – marginal revenue product of labor): A.
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