CLEP Microeconomics chapter practice4 questions

27 Labor Markets and Hiring Decisions

These questions come directly from the chapter practice in the book. Choose the best answer, check your reasoning, and use the explanation to correct any gap.

Question 1

Question 1 of 4

In a competitive labor market, the equilibrium wage occurs where

The market wage balances the total quantity of labor employers want to hire with the quantity workers want to supply.
Show answer and explanation

D. market labor demand intersects market labor supply

The market wage balances the total quantity of labor employers want to hire with the quantity workers want to supply.

Question 2

Question 2 of 4

A small wage-taking employer faces a labor supply curve that is

The individual employer can hire at the market wage but cannot lower the wage and retain the same labor supply, so its supply curve is horizontal.
Show answer and explanation

B. horizontal at the market wage

The individual employer can hire at the market wage but cannot lower the wage and retain the same labor supply, so its supply curve is horizontal.

Question 3

Question 3 of 4

Which change most directly shifts market demand for nurses to the right?

Greater demand for the service nurses help produce raises their marginal revenue product and market labor demand.
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C. An increase in demand for medical services

Greater demand for the service nurses help produce raises their marginal revenue product and market labor demand.

Question 4

Question 4 of 4

Two jobs require the same skill, but one involves substantially greater injury risk. A persistent wage premium for the risky job is best explained by

The higher wage compensates workers for an undesirable nonwage job characteristic rather than proving higher productivity.
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A. a compensating wage differential

The higher wage compensates workers for an undesirable nonwage job characteristic rather than proving higher productivity.

Quiz complete