ECN2802

Quiz 11

1. The effect that explains why workers tend to supply more hours when wages increase is called the: 
   A. income effect.
   B. social effect.
   C. substitution effect.
   D. work effect.

CORRECT ANSWER: C

2. An increase in the marginal income tax rate is likely to: 
   A. increase the quantity of labor supplied.
   B. decrease the quantity of labor supplied.
   C. decrease the quantity of labor demanded.
   D. increase the quantity of labor demanded.

CORRECT ANSWER: B

3. The elasticity of the labor supply curve depends on all of the following factors except: 
   A. individuals' opportunity cost of working.
   B. the number of workers who enter or leave the labor market.
   C. the elasticity of demand for a firm's output.
   D. the elasticity of individuals' labor supply curves.

CORRECT ANSWER: C

4. The demand for labor is a derived demand because: 
   A. many workers are self-employed.
   B. the income workers earn adds to the demand for output.
   C. the demand for output comes from the demand for labor.
   D. the demand for labor comes from the demand for output.

CORRECT ANSWER: D

5. The elasticity of labor demand does not depend on the: 
   A. elasticity of demand for the firm's product.
   B. relative importance of the factor in the production process.
   C. possibility of, and cost of, substitution in production.
   D. elasticity of labor supply.

CORRECT ANSWER: D