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Focused topic practice

human capital MCQs

Practise focused human capital questions with marked answers for exam preparation and subject revision.

human capital Mcqs
1. By restricting labor supply a trade union can _____ and _______?
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A. increase the wage, lower employment

B. maintain the wage, lower employment

C. increase the wage, increase employment

D. maintain the wage, increase employment

2. Which of the following is not a reason why some workers are paid above the equilibrium wage ?
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A. efficiency wages

B. unions

C. beauty

D. minimum-wage laws

3. The marginal revenue product of capital is the ?
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A. change in companys share price

B. change in a companys balance sheet when it acquires new plant

C. additional value of output from using more capital

D. changing value of the capital stock

4. Which of the following statements regarding discrimination is true ?
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A. The existence of a wage differential among groups is strong evidence of discrimination in the labour market

B. Discrimination can only persist in a competitive labour market it customers are willing to pay to maintain the discriminatory practice or the government requires discrimination

C. Bigoted employers are the main source of a persistent discriminatory wage differential in a competitive market

D. Discrimination cannot exist in a competitive labor market

5. If a person who works in coal mine gets paid more than a person with a similar background and skills who works in a safer job, then ?
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A. coal miners must have greater human capital than others

B. we have observed a compensating differential

C. coal miners must be more attractive than other workers

D. we have evidence of discrimination against workers outside the coal mine

6. Which of the following is not part of a workers human capital ?
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A. all of these answers are parts of a workers human capital

B. education

C. experience

D. on the job training

E. effort
7. Efficiency wages are ____ that raise _____?
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A. high wages, productivity

B. high wages, employment

C. high wages, labor supply

D. low wages, employment

8. All of the following would tend to increase a workers wage except ?
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A. doing a job that is fun

B. Working the night shift

C. working harder

D. having a greater amount of natural ability

E. more education

9. If workers get a real wage increase this will likely ____ and _____?
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A. encourage the use of less capital, reduce demand for all inputs

B. encourage the use of less capital reduce demand for all inputs

C. encourage the use of more capital increase demand for all inputs

D. encourage the use of more capital in the long run, reduce demand for all inputs

10. A profit-maximizing firm will hire labour until _____ equals the _______?
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A. long run marginal revenue, long run marginal cost

B. labor output ratio, capital output ratio

C. marginal revenue, marginal cost

D. marginal cost of labor, marginal revenue product
11. Involuntary unemployment exists if workers ?
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A. will not work because the hours are anti-social

B. Are not prepared to move house to get the job

C. would work at the going wage but cant find jobs

D. will not work at the offered wage

12. Land will be allocated between competing uses so that ?
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A. the equilibrium rental rate equilibrium total demand with supply

B. housing gets priority

C. industry gets priority

D. farming gets priority

13. Economists have hypothesized that the widening gap between the wages of unskilled workers and skilled workers may be due to ?
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A. decrease in the demand for unskilled workers are more poorly educated

B. increase in the number of unskilled workers available due to immigration into the UK.

C. increase in the number of unskilled workers available because workers are more poorly educated

D. decrease in the demand for unskilled workers because of increases in technology and increases in international trade
14. Which of the following is true regarding the earning of attractive versus unattractive workers ?
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A. Attractive people tend to earn less because attractive people are viewed as shallow and more self-absorbed and therefore, as less productive

B. Attractive people tend to earn less because attractive people usually have less human capital

C. Attractive people tend to earn more because attractive people usually have greater human capital

D. Attractive people tend to earn more because they may actually have a larger value of marginal product
15. Top footballers tend to earn more than lecturers because ?
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A. lecturers are lazy

B. the labor markets are imperfect

C. top footballers are relatively scarce in relation to lecturers

D. footballers give more entertainment

16. The difference between gross investment and net investment is ?
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A. dwellings

B. inventories

C. productive investment

D. depreciation of the existing capital stock
17. The opportunity cost of acquiring education is ?
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A. the earnings foregone

B. course fees

C. course fees and living expenses

D. Course fees living expenses and textbook

18. Which of the following professionals is most likely to be able to generate the income of a superstar ?
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A. the best writer

B. the best professor

C. the best medical doctor

D. The best accountant

E. All of these answers participate in markets that could generate a superstar

19. According to the signaling view of the education ?
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A. can make any worker into a superstar

B. only helps firms sort workers into high ability and low-ability workers

C. increases human capital and the wages of workers

D. reduces the wage gap between high-skill and low-skill workers.

20. Which of the following could result in women being paid less than men ?
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A. women obtaining less human capital because they dont plan to work continuously to the age of retirement

B. all of these answers

C. women preferring to work in pleasant clean safe work places

D. customers preferring to deal with men

E. Women entering and leaving the labour force to care for children

21. the cost of using capital services is the ?
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A. wage rate of capital

B. rental rate for capital

C. marginal capital cost

D. interest charges

22. A wage differential among groups may not by itself be evidence of discrimination in the labour market because different groups have ?
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A. different levels of job experience

B. different preferences for the type of work they are willing to do

C. different levels of education

D. all of these answers are correct
23. In a competitive market, which of the following is least, likely to be the source of a persistent discriminatory wage differential ?
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A. the government

B. the employer

C. the customer

D. All of these answers could be source of a persistent discriminatory wage differential

24. Which of the following explanations of wage differentials is not likely to be true ?
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A. Men have more human capital than women

B. None of the above

C. Men have more job experience than women

D. Employers in competitive markets are bigots
25. In the short run, the supply of capital is ________ and in the long run will depend on _______?
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A. fixed, rental rate of capital

B. variable, interest rates

C. variable, technology

D. fixed, expectations

26. The participation rate in the labour force is affected by ?
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A. lower non-labour income

B. all of the above

C. lower fixed costs of working

D. changes in tastes between leisure and work

E. higher real wages

27. Which of the following is likely to generate a compensating differential ?
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A. One employee is willing to work the nightshift while another is not.

B. One employee is more attractive than another

C. All of these answers generated

D. One employee works harder than another

E. One employee is more educated than another

28. In the West Women and non-whites on average receive lower incomes than white men because ?
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A. all of the above

B. firms are reluctant to invest in training

C. educational disadvantage

D. they tend to work in relatively unskilled jobs

29. Human capital can be described as ?
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A. the tools used by workers to enhance productivity

B. the stock of expertise accumulated by a worker

C. a person inherited ability

D. education

30. Skilled labor is relatively scarce because ?
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A. it is costly to acquire human capital

B. too few student places in higher education

C. teachers salaries are too low

D. there are too few teachers

31. Different capital intensity in different industries is mainly explained by _______ and ________?
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A. technology, the ease of factor substitution

B. patents, skill shortages

C. government grants, international competition

D. wage differentials, skill levels

32. Competitive markets tend to ?
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A. reduce labour market discrimination because non-discrimination firms will employ cheaper labour earn more profits and drive discriminating firms out of the market

B. increase labour market discrimination because bigoted employers can charge any price they want in a competitive market to cover the cost of their discrimination

C. have no impact on labour market discrimination

D. Increase labor market discrimination because some workers can charge more for their services than other workers in a competitive market

33. The downward sloping marginal physical product of labor is the firms ?
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A. ginal revenue product of labor

B. marginal cost of labour

C. Supply of labor

D. Short-run demand curve for labor
34. The value of an asset depends upon ?
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A. its depreciation

B. its scrap values

C. the cost of loans

D. the present value of the future stream of income it can earn
35. Unions achieve a higher wage differential the more _____ and the more ______?
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A. the economy is growing, people prefer leisure

B. inelastic the demand for labour, they can restrict the supply of labour

C. members they have, aggressive they behave

D. the productivity is growing vacancies exist

36. According to the human capital view of education ?
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A. increases human capital and the wages of workers

B. only helps firms sort workers into high ability and low-ability workers.

C. can make any worker into a superstar

D. has no impact on the human capital of workers?

37. In order for a market to support superstars it must have which of the following characteristics ?
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A. It must be involved in professional athletics

B. Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low cost

C. Every customer must be willing to pay an enormous amount for the product and the product must be a necessity

D. Every customer must be indifferent to the price they pay, and the seller must be a competitor in the market for the product

38. It is not considered discrimination when an employer offers different opportunities to individuals that differ only by them ?
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A. sex

B. race

C. age

D. productivity
39. If two jobs require the same amount of skills and experience the job that pays the most is most likely to be the one that is ?
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A. fun

B. safe

C. unpleasant

D. all these answers

E. easy

40. The most important source of wage differentials are ?
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A. unionization

B. regional variation

C. relative danger

D. skills
41. The functional distribution of income shows how national income is divided between ?
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A. the population

B. the working population

C. the factors of production

D. employees

42. The substitution effect of a rise in the price of labour will ____ the quantity of labour and the output, effect will ____ it
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A. increase; increase

B. increase; reduce

C. reduce; increase

D. reduce; reduce