California State University, Sacramento

ECON 1A

Quiz 4

Question1)Consider the 2014-2015 salaries (in millions of dollars) for the starting five players for the Golden State Warriors and Cleveland Cavaliers, who played in the NBA Finals last season:

 

 

 

 

Question 2

Consider the salaries given above in Question 1. Based on this data, the Gini coefficient:

Question 3

The fact that workers must share a limited amount of space and equipment results in

                            marginal productivity of labor.

Question 4

A competitive firm should continue to hire workers until:

 

 

Question 5

As wages increase, the income effect causes workers to:

Question 6

When Josh’s wage rises and he decides to work more hours, we know that the                                     ef- fect has dominated the                                              effect.

Question 7

If immigration increases in a specific labor market, ceteris paribus, then:

 

 

 

 

Question 8

The demand for labor is a derived demand, which means:

 

 

Question 9

The Black Death during the 14th century killed between 75 million and 200 million Europeans. Using the labor demand and labor supply model, we would predict:

 

 

Question 10

Suppose that there in an increase in technology that increases the marginal product of workers. In this case,

 

 

 

Question 11

Consider a profit-maximizing firm in the short-run, where the supplies of capital, human capital, natural resources, and technology are constant. The table below represents the relationship be- tween the amount of output produced (Q) and the number of workers employed (L):

Q	L
0	0
10	1
18	2
24	3
28	4

If each unit of output can be sold for $3, and the firm decides to hire 2 workers, then the wage rate could be: (hint: find the marginal product and the value of the marginal product)

 

 

Question 12

Refer to Question 11 above. Assuming that labor supply is upward sloping, if the price of the output produced by workers decreases from$3 to $2 per unit, then                                                                              will

                                  and the equilibrium wage rate will                                              .

Question 13

The labor supply curve is given by the equation LS = 20 +3W and the labor demand curve is given by the equation LD = 80 - 2W. The equilibrium wage in this labor market is:

 

 

 

 

Question 14

Which of the following statements is correct?

 

 

Question 15