Elasticity of demand for labor measures the percentage change in quantity demanded of labor that is brought about by a percentage change in the
a.demand for the product produced by labor.
b.price of the product.
c.quantity supplied of labor.
e.price of substitute factors.
44.The wage rate increases 15 percent, and the quantity demanded of labor falls by 25 percent. The absolute value of the elasticity of demand for labor is
e.none of the above
45.The lower the elasticity of demand for a product,
a.the higher the ratio of labor costs to total costs.
b.the lower the ratio of labor costs to total costs.
c.the lower the elasticity of demand for the labor that produces the product.
d.the higher the elasticity of demand for the labor that produces the product.
e.none of the above
46.Which of the following statements is true?
a.The higher the labor cost-total cost ratio, the lower the elasticity of demand for labor.
b.The lower the labor cost-total cost ratio, the higher the elasticity of demand for labor.
c.The more substitutes for labor, the higher the elasticity of demand for labor.
d.The fewer substitutes for labor, the higher the elasticity of demand for labor.
e.b and c
47.If the wage rate increases from $9 to $10 and, as a result, the quantity demanded of labor decreases from 400 workers to 350 workers, then the absolute value of the elasticity of demand for labor is
48.Firm A has a higher labor cost-total cost ratio than Firm B. If both firms employ the same type of labor, and the wage rate rises $1, then Firm A's product price will most likely ____________ than Firm B's product price.
a.rise by more
b.fall by more
c.fall by less
d.rise by less
49.If the demand for a product that labor produces is highly elastic, a small percentage increase in price will __________ quantity demanded of the product by a relatively __________ percentage, which, in turn, will __________ the demand for the labor that produces the product.
a.increase; small; slightly reduce
b.decrease; small; greatly increase
c.decrease; large; greatly increase
d.decrease; large; greatly reduce
e.increase; large; greatly reduce
50.The market supply curve of labor
a.slopes downward, indicating that as the wage rate falls, the quantity supplied of labor rises.
b.slopes upward, indicating that as the wage rate rises, the quantity supplied of labor rises.
c.is vertical, indicating that the quantity supplied of labor is independent of the wage rate.
d.slopes upward, indicating that as the wage rate falls, the quantity supplied of labor rises.
51.Suppose there are two labor markets, A and B, and labor is homogeneous between markets. The wage rate in labor market A falls relative to the wage rate in labor market B. What happens in labor market B?
a.The supply curve of labor shifts leftward.
b.The supply curve of labor shifts rightward.
c.The demand curve for labor shifts leftward.
d.b and c
e.none of the above
52.A decrease in the wage rate
a.shifts the supply curve of labor rightward.
b.increases the quantity supplied of labor.
c.shifts the supply curve of labor leftward.
d.decreases the quantity supplied of labor.
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