What is a fall in the supply of labour likely to cause?
Correct answer D. A higher equilibrium wage and lower quantity of labour
Topic / 36 questions
Labour Market MCQs
Page 2 of Labour Market multiple-choice questions with answers. Tap an option to check yourself.
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- Miscellaneous Economics 737
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In which case is the demand for labour more likely to be wage inelastic?
Correct answer D. Wages are a small proportion of total costs
In a perfectly competitive labour market, firms are wage takers. What is the marginal cost of labour equal to?
Correct answer A. The average cost of labour
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If the minimum wage is set above the equilibrium wage rate, other things being equal, what will result?
Correct answer B. There will be excess supply in the labour market
Supply-side policies are best suited to tackling which of these problems?
Correct answer B. Voluntary unemployment
What happens in the labour market when the real wage is set too high?
Correct answer A. The quantity of labour demanded is lower than the quantity supplied
When does occupational immobility of labour arise?
Correct answer B. When people do not have the right skills to work
What effect does reducing involuntary unemployment have in terms of the production possibility frontier?
Correct answer A. It helps the economy move on to its production possibility frontier
Which measure might a government use to reduce cyclical unemployment?
Correct answer D. Reduce interest rates
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According to the UK Office for National Statistics, how is a husband who stays at home to look after the household classified?
Correct answer B. Not in the labour force
What effect does a minimum wage law tend to have?
Correct answer A. It creates more unemployment in low-skill job markets than in high-skill job markets
What happens if, for whatever reason, the wage is kept above the competitive equilibrium wage?
Correct answer B. The quantity of labour supplied will exceed the quantity of labour demanded and there will be unemployment
Which government policy would NOT help to reduce the unemployment rate?
Correct answer C. Raising the minimum wage
Which of these is a reason why a firm might choose to pay efficiency wages?
Correct answer E. All of these answers
In which situation might a union actually improve efficiency?
Correct answer A. When it offsets the market power of a large firm that is the dominant employer in a region
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How do unions tend to widen the pay gap between insiders and outsiders?
Correct answer C. By increasing the wage in the unionised sector, which may create an increase in the supply of workers in the non-unionised sector