labour market MCQs – Page 2

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

labour market Mcqs

21. A profit maximising firm will employ labour up to the point where ?
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A. Marginal revenue product = average cost of labour

B. Marginal revenue product = marginal cost of labour

C. Marginal cost = marginal product

D. Marginal revenue = marginal product

22. If employees cannot accept a job because of the costs of moving this is known as ?
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A. Structural immobility

B. Geographical immobility

C. Occupational immobility

D. Cyclical unemployment

23. A miner who has been unable to find work for so long that he has stopped looking for work is considered to be ?
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A. Unemployed

B. Not in the adult population

C. Employed

D. Not in the labour force

24. Which of the following statements about efficiency wage theory is true ?
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A. Paying above the competitive equilibrium wage may improve worker health lower worker turnover improve worker quality and increase worker effort

B. Paying the lowest possible wage is always the most efficient (Profitable)

C. Paying above the competitive equilibrium wage tends to cause workers to shirk their responsibilities

D. Firms do not have a choice about whether they pay efficiency wages or not because these wages are determined by law

25. Demand for labour is more likely to be wage inelastic if ?
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A. It is easy to replace labour

B. Wages are a small proportion of total costs

C. Capital is a good substitute for labour

D. Demand for the final product is price elastic

26. If people are made unemployed because of a fall in aggregate demand this is known as ?
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A. Cyclical unemployment

B. Frictional unemployment

C. Seasonal unemployment

D. Structural unemployment

27. In a perfectly competitive labour market firms are wage takers and the marginal cost of labour equals?
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A. The marginal product

B. The marginal revenue

C. The total cost of labour

D. The average cost of labour

28. A decrease in the supply of labour is likely to lead to ?
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A. A lower equilibrium wage and lower quantity of labour

B. A higher equilibrium wage and higher quantity of labour

C. A lower equilibrium wage and higher quantity of labour

D. A higher equilibrium wage and lower quantity of labour

29. Which of the following is not a supply side measure ?
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A. Providing more information

B. Helping individuals to move location to find work

C. Increasing spending on existing industries

D. Increased training

30. The natural rate of unemployment is likely to fall if ?
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A. Geographical immobility increases

B. unemployment benefits increase

C. Income tax increases

D. More training is available for the unemployed

31. A reservation wage is the ?
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A. tip necessary to get a waiter to reserve a table

B. competitive equilibrium wage.

C. Maximum wage the firm is willing to pay

D. minimum wage the worker is willing to accept

32. An increase in the wage rate ?
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A. is illegal in a free market

B. Will decrease total earning if the demand for labour is wage elastic

C. Will usually lead to more people employed

D. will cause a shift in the demand for labour

33. The Marginal Revenue Product is likely to be wage inelastic if ?
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A. Labour costs are a high percentage of total costs

B. There are many substitutes for the final product

C. It is relatively easy to substitute capital for labour

D. Demand for the final product is price inelastic

34. Refer to Figure 1 The labour fouce is ?
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A. 134.0 million

B. 98.0 million

C. None of theses answers

D. 92.3 million

35. IF Unemployment insurance were so generous that it paid laid off workers 95 percent of their regular salary ?
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A. None of these answers

B. The official unemployment rate would probably overstate true unemployment

C. The official unemployment rate would probably understate true unemployment

D. Frictional Unemployment would fall

E. There would be no impact on the official unemployment rate

36. A fall in demand for labour is likely to lead to ?
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A. A higher equilibrium wage and lower quantity of labour

B. A lower equilibrium wage and higher quantity of labour

C. A lower equilibrium wage and lower quantity of labour

D. A higher equilibrium wage and higher quantity of labour

37. Which one of the following types of Unemployment results from the wage being held above the competitive equilibrium wage ?
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A. None of these answers

B. Sectoral Unemployment

C. Structural unemployment

D. Cyclical Unemployment

E. Frictional Unemployment

38. Refer to Figure 1. The labour force participation rate is ?
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A. 50.2 Percent

B. 70.2 Percent

C. 65.9 Percent

D. 47.1 Percent

39. The amount of unemployment that the economy normally experiences is known as ?
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A. The natural rate of unemployment

B. frictional unemployment

C. cyclical unemployment

D. efficiency wage unemployment

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