Human Resource Economics
Midterm Exam
Course Introduction
Human Resource Economics examines the economic principles underlying the functioning of labor markets and employment relationships within organizations. The course explores topics such as labor supply and demand, wage determination, human capital investment, labor productivity, and the impact of labor unions and government policies on employment. Through an analytical framework, students gain insights into how individuals and firms make decisions about hiring, training, compensation, and workforce development, as well as the implications of these decisions for efficiency, equity, and economic growth.
Recommended Textbook
Contemporary Labor Economics 10th Edition by Campbell McConnell
Available Study Resources on Quizplus
18 Chapters
829 Verified Questions
829 Flashcards
Source URL: https://quizplus.com/study-set/3090 Page 2
Chapter 1: Labor Economics: Introduction and Overview
Available Study Resources on Quizplus for this Chatper
13 Verified Questions
13 Flashcards
Source URL: https://quizplus.com/quiz/61255
Sample Questions
Q1) Nobel Laureate Gary Becker's basic professional contribution is his:
A)application of traditional theories of anthropology to labor markets
B)application of the economic perspective to law,sociology,demographics,and anthropology
C)statistical verification of race and gender discrimination
D)explanation of the limitations of the economic perspective in explaining labor markets
Answer: B
Q2) According to a newspaper account from Washington State,lottery winners in that state:
A)usually continued to work when prizes were $1 million or less and usually quit work when prizes exceeded $4 million
B)usually continued to work,no matter how large the prize
C)usually quit work,no matter how large the prize
D)were less likely to quit work the larger was the prize
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: The Theory of Individual Labor Supply
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/61254
Sample Questions
Q1) The substitution effect is:
A)the combination of leisure and wage rate that maximizes one's income
B)the part of the total change in desired work hours that is due to the change in real income resulting from a change in the wage rate
C)the part of the total change in desired work hours that is due to a change in the wage rate,with real income or utility constant
D)always dominated by the income effect
Answer: C
Q2) Sammy is required by her employer to work a standard eight-hour workday. Suppose her marginal rate of substitution of leisure for income exceeds the wage rate at this level of work effort. We can conclude that Sammy will:
A)feel underemployed
B)desire to find a second job
C)feel overemployed
D)desire to work voluntary overtime
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Population, Participation Rates, and Hours of Work
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/61253
Sample Questions
Q1) Most of the variations in U.S.population growth have resulted from changes in:
A)birthrates and net migration
B)birthrates and death rates
C)net migration and death rates
D)birthrates and technological change
Answer: A
Q2) Which of the following best exemplifies the Becker income effect? An increase in the market wage leads a household to:
A)substitute time for goods in the production of commodities
B)consume fewer time-intensive commodities and more goods-intensive commodities
C)consume more commodities
D)have fewer children
Answer: C
Q3) Compared to a high-wage worker,a low-wage worker will tend to:
A)pursue more goods-intensive activities
B)pursue more time-intensive activities
C)pursue fewer time-intensive activities
D)sacrifice time-intensive activities in favor of goods-intensive activities
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Labor Quality: Investing in Human Capital
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/61252
Sample Questions
Q1) The primary indirect cost of going to college is:
A)earnings given up by not entering the labor market directly after high school
B)an enhanced future flow of earnings
C)the value of room and board that would have been provided at home
D)tuition expenses
Q2) The private rate of return on human capital may _____ the social rate because _____.
A)understate; schooling is subsidized
B)understate; schooling provides external benefits
C)overstate; schooling provides external benefits
D)overstate; schooling and ability are positively correlated
Q3) Suppose there is now a 25% likelihood that a person's work career may be interrupted for ten years after schooling has been completed.In the diagram above,this development would:
A)have no impact
B)shrink area 1 and reduce the likelihood of investing in a college education
C)shrink area 2 and increase the likelihood of investing in a college education
D)shrink area 3 and reduce the likelihood of investing in a college education
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: The Demand for Labor
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/61251
Sample Questions
Q1) The market wage increases from $9 to $11and the firm responds by reducing its labor force by 16%.The wage elasticity coefficient is:
A)8,indicating elastic demand
B)0.8,indicating inelastic demand
C)1.2,indicating elastic demand
D)1.6,indicating elastic demand
Q2) If energy and unskilled labor are gross complements,an increase in the price of energy will:
A)increase the supply of unskilled labor,decreasing the unskilled wage
B)increase the demand for unskilled labor,raising the unskilled wage
C)decrease the demand for unskilled labor,decreasing the unskilled wage
D)either increase or decrease the demand for unskilled labor,depending on the relative strengths of the output effect and the substitution effect
Q3) (appendix)An isoquant shows all combinations of:
A)wage rates and per unit costs of capital that yield the same total profit
B)labor and capital that yield the same total profit
C)labor and capital that yield the same total cost
D)labor and capital that yield the same total output
To view all questions and flashcards with answers, click on the resource link above.
7
Chapter 6: Wage Determination and the Allocation of Labor
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/61250
Sample Questions
Q1) There will be a shortage of labor in a particular market if:
A)labor supply increases and demand decreases
B)the current wage is above the wage that would clear the market
C)there is a decrease in the price of a substitute resource
D)the current wage is below the wage that would clear the market
Q2) A perfectly competitive labor market may be characterized by all of the following except:
A)neither firms nor workers have any control over the market wage
B)a few firms that dominate hiring in the market
C)numerous equally qualified workers
D)perfect information
Q3) Compared to a monopsonist that sells its output in a competitive product market,an otherwise identical monopsonist with monopoly power in the product market will pay:
A)a lower wage
B)a higher wage
C)the same wage
D)more information is needed
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Alternative Pay Schemes and Labor Efficiency
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/61249
Sample Questions
Q1) According to efficiency wage models,the firm's profits will increase whenever the wage causes:
A)worker productivity to increase by a larger proportion than the wage increase
B)worker productivity to increase
C)worker turnover to fall
D)worker nutrition to increase
Q2) Given isoprofit line 1,this worker's wage-fringe optimum is given by point:
A)A
B)B
C)C
D)D
Q3) The slope of a wage-fringe indifference curve reflects:
A)the overall utility level of a person
B)a worker's willingness to give up an extra dollar of wages in exchange for an extra dollar of fringe benefits
C)the firm's cost of paying an extra dollar of compensation as wages rather than fringe benefits
D)an increasing marginal rate of substitution of fringe benefits for cash
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: The Wage Structure
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/61248
Sample Questions
Q1) The hedonic theory of wages predicts that:
A)workers and firms will be matched randomly,but in equilibrium firms will be maximizing profits and workers will be maximizing utility
B)other things equal,workers who value job safety least will tend to work for firms that have the lowest cost of providing safe jobs
C)other things equal,workers who value job safety least will tend to work for firms that have the highest cost of providing safe jobs
D)other things equal,workers who value job safety most will tend to work for firms that have the highest cost of providing safe jobs
Q2) Of the following industries,2011 average hourly earnings were greatest in:
A)public administration
B)services
C)mining
D)construction
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: Mobility,Migration,and Efficiency
Available Study Resources on Quizplus for this Chatper
50 Verified Questions
50 Flashcards
Source URL: https://quizplus.com/quiz/61247
Sample Questions
Q1) The combined gain in efficiency of the two countries is equal to:
A)area kijl - area ebcf
B)kl - ef
C)area W<sub>U</sub>ijW<sub>e</sub> - area W<sub>M</sub>bcW<sub>e</sub>
D)W<sub>U</sub> + W<sub>M</sub>
Q2) Suppose there is an increase in immigration rates of unskilled,illegal aliens.Which of the following is not likely to result?
A)Unskilled workers would lose if they are gross substitutes with illegal immigrants
B)Skilled workers would benefit if they are gross complements with unskilled workers
C)The wages of unskilled workers would fall in those markets not protected by minimum wages
D)For each immigrant who receives a job there would be one less job available for a native worker
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Labor Unions and Collective Bargaining
Available Study Resources on Quizplus for this Chatper
53 Verified Questions
53 Flashcards
Source URL: https://quizplus.com/quiz/61246
Sample Questions
Q1) In response to declines in membership,unions have recently:
A)avoided labor organization mergers
B)intensified attempts to organize blue-collar workers as opposed to white-collar workers
C)given increased priority to wage increases and put less emphasis on non-wage issues
D)substituted work slowdowns for strikes as a way of preventing replacement by permanent strikebreakers
Q2) An example of a union federation is the:
A)American Medical Association
B)Air Line Pilots Association
C)United Auto Workers
D)AFL-CIO
Q3) The authors suggest that unions developed primarily in response to:
A)purposeful mistreatment by employers
B)the inability of preindustrial workers to be self-sufficient
C)dependency of workers on factory owners as a result of industrialization
D)attempts by employers to achieve an eight-hour day
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: The Economic Impact of Unions
Available Study Resources on Quizplus for this Chatper
50 Verified Questions
50 Flashcards
Source URL: https://quizplus.com/quiz/61245
Sample Questions
Q1) If union workers in a given occupation are paid $20 per hour while nonunion workers receive $16 per hour,the measured union wage advantage is:
A)20%
B)25%
C)80%
D)more information is required
Q2) Which one of the following is a true statement?
A)The union wage advantage narrows during recessions
B)There is no union wage advantage for African American males
C)Unions achieve bigger wage gains for clerical workers than workers in crafts
D)The union wage advantage is bigger for workers with less education than for workers with more education
Q3) Which one of the following observations supports the argument that unions increase productivity?
A)Turnover in union firms is lower than in nonunion firms
B)Unions alter the allocation of labor between union and nonunion firms
C)Training at union firms is lower than at nonunion firms
D)Unions provide an "exit" option whereas nonunion workers only have a "voice" option
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Government and the Labor Market:
Employment, Expenditures, and Taxation
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/61244
Sample Questions
Q1) Which of the following is an example of an exhaustive government expenditure?
A)Government payroll expenditures
B)Government transfer payments
C)Government subsidies
D)U.S.government loans to foreign buyers of U.S.exports
Q2) According to the theory of individual labor supply,a reduction in income tax rates leads to:
A)a reduction in hours worked,provided the income and substitution effects work in opposing directions
B)an increase in hours worked,provided the income and substitution effects work in opposing directions
C)no change in hours worked,because the income and substitution effects cancel each other
D)an unpredictable change in hours worked,depending on the relative strengths of the income and substitution effects
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Government and the Labor Market: Legislation and Regulation
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/61243
Sample Questions
Q1) Of the following laws,which one contributed most to union membership?
A)Landrum-Griffin Act
B)Norris-LaGuardia Act
C)Sherman Act
D)Taft-Hartley Act
Q2) Consider the diagram.Suppose the government establishes a minimum wage of $7.00 in this market.Employment would decline by _____ workers and unemployment would increase by _____ workers.
A)20,20
B)20,35
C)35,20
D)35,35
Q3) Public sector union growth was most encouraged by:
A)the Wagner Act
B)the Taft-Hartley Act
C)The Landrum-Griffin Act
D)a series of executive orders and state laws recognizing the rights of public sector workers to organize
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Labor Market Discrimination
Available Study Resources on Quizplus for this Chatper
60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/61242
Sample Questions
Q1) The index of segregation for this economy is:
A).20
B).30
C).40
D).70
Q2) According to the "demand and supply" interpretation of Becker's model,which one of the following will tend to reduce the male-female wage gap?
A)An increase in the supply of female labor
B)An increase in the discrimination coefficients of some employers
C)An increase in the number of nondiscriminating firms
D)An overall increase in the demand for labor
Q3) At firms obligated to undertake affirmative action,female and minority shares of employment:
A)grew consistently from 1975 to the present
B)grew from 1975 to 1980,but have not changed appreciably since then
C)did not change appreciably from 1965 to 1975,but have grown consistently since then
D)did not change from 1965 to the present
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Job Search: External and Internal
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/61241
Sample Questions
Q1) An unanticipated reduction in the rate of inflation is expected to:
A)reduce the unemployment rate in the short run,but not in the long run
B)reduce the unemployment rate in the both the short run and the long run
C)increase the unemployment rate in the short run,but not in the long run
D)have very little impact on the unemployment rate in either the short run or the long run
Q2) Empirical studies of the job search model suggest that:
A)variations in acceptance rates explain most of the variation in unemployment duration
B)higher levels of unemployment benefits have little impact on unemployment duration
C)unemployment duration increases with age
D)longer eligibility limits on unemployment benefits have little impact on unemployment duration
Q3) Internal labor markets are most likely to exist if:
A)workers do not require extensive amounts of firm-specific training
B)there are substantial costs to the employer associated with worker turnover
C)costs of screening and recruiting job applicants are relatively low
D)workers' productivity does not increase with experience
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: The Distribution of Personal Earnings
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/61240
Sample Questions
Q1) Econometric studies that hold other factors constant show that:
A)there is a positive relationship between education and earnings
B)there is no relationship between education and earnings
C)there is no relationship between the quality of education and earnings
D)formal schooling explains most of the differences in individual earnings
Q2) The number of persons with annual earnings between $30,000 and $50,000 is:
A)7,000
B)8,000
C)14,000
D)20,000
Q3) Among the following industrial countries,income inequality is greatest in:
A)Germany
B)Italy
C)Canada
D)the U.S.
Q4) Including fringe benefits with earnings,the Lorenz curve moves:
A)away from the diagonal and the Gini coefficient rises
B)away from the diagonal and the Gini coefficient falls
C)toward the diagonal and the Gini coefficient rises
D)toward the diagonal and the Gini coefficient falls
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Labor Productivity: Wages,Prices,and
Available Study Resources on Quizplus for this Chatper
42 Verified Questions
42 Flashcards
Source URL: https://quizplus.com/quiz/61239
Sample Questions
Q1) The critical determinants of productivity growth include all of the following except:
A)the average quality of the labor force
B)the amount of capital goods employed with each worker hour of labor
C)the efficiency with which inputs are combined
D)the extent of import restrictions
Q2) Productivity growth:
A)falls below its trend rate in a recession and rises above it in an expansion
B)rises above its trend rate in a recession and falls below it in an expansion
C)is counter-cyclical
D)is independent of the business cycle
Q3) Productivity growth:
A)has been associated with rising aggregate unemployment
B)has been associated with growing aggregate employment
C)in specific industries results in growing employment in those industries
D)in specific industries results in growing unemployment in those industries
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Employment and Unemployment
Available Study Resources on Quizplus for this Chatper
52 Verified Questions
52 Flashcards
Source URL: https://quizplus.com/quiz/61238
Sample Questions
Q1) Crowding out occurs when:
A)unemployment rises as a result of downward wage rigidity
B)unemployment rises because workers are displaced
C)government borrowing pushes up interest rates,causing private investment to fall
D)government borrowing pushes up interest rates,causing fiscal policy to overshoot the expansion of aggregate demand
Q2) Suppose that a policy response to cyclical unemployment is mistimed or overshoots its target,resulting in output above the full-employment level.Output will:
A)eventually return to the full-employment level because at some point,workers will no longer continue to supply as much labor at each nominal wage
B)eventually return to the full-employment level because nominal wage rates are rigid
C)eventually return to the full-employment level because workers will not adjust their acceptance wages
D)stay above the full-employment level until corrective policy action is taken
To view all questions and flashcards with answers, click on the resource link above.