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Focused topic practice

labour market MCQs

Practise focused labour market questions with marked answers for exam preparation and subject revision.

labour market Mcqs

1. A minimum wage law tends to ?
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A. Create more unemployment in low-skill job markets than in high-skill job markets

B. Create more Unemployment is high-skill job markets than in low-skill job markets

C. have no impact on unemployment as long as it is set above the competitive equilibrium wage

D. Help all teenagers because they receive a higher wage than they would otherwise

2. Supply side policies are most appropriate to cure ?
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A. Cyclical unemployment

B. Involuntary unemployment

C. A fall in aggregate demand

D. Voluntary unemployment

3. Union might increase efficiency in the case Where they ?
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A. Lower the wage of local outsiders

B. Raise the wage for insiders above the competitive equilibrium

C. Offset the market power of a large firm that is the dominant employer in a region

D. Threaten a strike but dont actually follow through so there are not lost hours of work

4. Which of the following government policies would fail to lower the unemployment rate ?
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A. Establishing employment agencies

B. Establishing right-to-work laws

C. Raising the minimum wage

D. Reducing unemployment benefits

E. Establishing worker training Programs

5. Reducing involuntary unemployment ?
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A. Helps the economy move along its Production Possibility Frontier

B. Helps the economy move on the to Production Possibility Frontier

C. Helps the economy move inside the Production Possibility Frontier

D. Helps shift the economys Production Possibility Frontier outwards

6. Occupational immobility of labour occurs if ?
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A. People cannot afford to move location

B. People do not have the right skills to work

C. People do not want to work

D. People lack information

7. Unions tend to increase the disparity in pay between insiders and outsiders by ?
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A. increasing the wage in the Unionized sector, Which may create a decrease in the supply of workers in the non-unionized sector

B. Increasing the demand for workers in the Unionized sector

C. Increasing the wage in the Unionized sector which may create an increase in the supply of workers in the non-unionized sector

D. decreasing the demand for workers in the Unionized sector

8. Which of the following is an example of a reason why firms might pay efficiency wages ?
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A. At equilibrium wages workers often quit to find better jobs.

B. At equilibrium wages workers sleep when the boss is not looking because workers are not deeply concerned about being fired

C. All of these answers

D. At equilibrium wages, workers cannot afford a healthy diet so they fall asleep at work due to a lack of energy

E. At equilibrium wages only minimally qualified workers apply for the job

9. Refer to Figure 1. The unemployment rate is ?
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A. Not Enough

B. 5.8 Percent

C. 5.7 Percent

D. 3.2 Percent

10. If the minimum wage is set above the equilibrium wage rate, then another thing unchanged ?
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A. More people will be employed

B. There will excess demand in the labour market

C. There will be equilibrium in the labour market

D. There will be excess supply in the labour market

11. According to the Office of National Statistics UK, a husband who chooses to stay home and take care of household is ?
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A. Employed

B. Not in the labour force

C. A discouraged worker

D. Unemployed

12. TO reduce cyclical unemployment the government might ?
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A. Increase the budget surplus

B. Reduce interest rates

C. Increase the balance of payment deficit

D. Reduce government expenditure

13. If, for any reason the wage is held above the competitive equilibrium wage?
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A. The quantity of labour supplied will exceed the quantity of labour demanded and there will be Unemployment

B. The quantity of labour demanded will exceed the quantity of labour supplied and there will be a labour shortage

C. The quality of workers in the applicant pool will tend to fall

D. Unions will likely Strike and the wage will fall to equilibrium

14. If the real wage is too high in the labour market ?
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A. The quantity demanded of labour is lower than the quantity supplied

B. The quantity demanded of labour is higher than the quantity supplied

C. The quantity demanded of labour equals the quantity supplied

D. It will automatically adjust in the short run to bring equilibrium

15. The Marginal Revenue Product is ?
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A. Upward sloping due to the law of demand

B. Upward sloping due to the law of marginal utility

C. Downward sloping due to the law of diminishing returns

D. Downward sloping due to the law of supply

16. Some frictional Unemployment is inevitable because ?
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A. Efficiency wages may hold the wage

B. of minimum wage laws

C. All of these answers

D. There are changes in the demand for labour among different firms.

E. Of unions

17. If there is cyclical unemployment in the economy the government might ?
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A. Reduce government spending

B. Cut taxes

C. Increase interest rates

D. Encourage savings

18. Less demand in the economy may increase unemployment; this may lead to less spending which may reduce demand further. This is called ?
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A. The downward mpc

B. The downward multiplier

C. The upward PPF

D. The upward accelerator

19. Sector shifts tend to raise which type of unemployment ?
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A. Unemployment due to unions

B. Unemployment due to efficiency wages

C. Structural Unemployment

D. Frictional Unemployment

20. Which of the following types of unemployment will exist even if the wage is at the competitive equilibrium ?
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A. Unemployment due to minimum-wage laws

B. Unemployment due to efficiency wages

C. Frictional Unemployment

D. Unemployment due to unions

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