Question

45. 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. 46. 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 the product C. the demand for output comes from the demand for labor D. the demand for labor comes from the demand for the product 47. Suppose both wages and employment increase. These changes most likely were caused by A. an increase in labor demand. B. an increase in labor supply C. a decrease in labor demand. D. a decrease in labor supply 48. A wage differential among groups may not by itself be evidence of discrimination in the labor market because different groups have: A. different levels of education. B. different preferences for the type of work they are willing to do. C, different levels of job experience. D all of the above. 49. A monopsonist will pay a wage that: A. is greater than that in a perfectly competitive labor market. B. is the same as that in a perfectly competitive labor market C. is less than that in a perfectly competitive labor market. D. maybe greater than, less than, or equal to that in a competitive labor market, depending on labor supply S0. If a single union supplies all the labor in a competitive labor market, the union probably will: A. increase labor supply to raise employment. B. restrict labor supply to raise wages. C. increase union membership to increase wages. D. behave as a monopsonist. 51. Transfer payments are not included in measures of income distribution, therefore income distribution A. overestimates the inequality of living standards. B. understates the inequality of living standards. C. accurately represents the true inequality of living standards. D. could exaggerate or understate the inequality of living standards depending on whether the transfers are goods or services. 52. To which of the following policies is the Earned Income Tax Credit most closely related? A. minimum-wage laws. B. welfare. C. negative income tax. D. transfer payments. A. they make recipients more comfortable than most middle-class Americans B. benefits are reduced at such a high rate when recipients earn more income that there is little or no 53. Current antipoverty welfare programs discourage work because: incentive to work once one is receiving benefits. C. antipoverty programs attract naturally lazy people to begin with. D. in order to be eligible for benefits, a recipient cannot have a job.

Answer 1

45.

A

Increase in marginal income tax rate, will reduce disposable income and workers will work more to compensate it.

46.

D

It is the demand for the product that causes supply and workers are demanded to produce goods. So, it is a derived demand.

47.

B

More workers will join the labor market and labor supply increase.

48.

B

It is the preference and unpleasant nature of work that attract wage differentials.

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