#1
What is the definition of the labor force in economics?
The total number of individuals capable of working, including both employed and unemployed individuals
ExplanationLabor force encompasses all capable individuals for work, employed or not.
#2
Which of the following is NOT a factor affecting labor supply?
Government regulations
ExplanationGovernment regulations do not directly affect labor supply.
#3
What is the concept of labor market equilibrium?
The point where the quantity of labor demanded equals the quantity of labor supplied
ExplanationLabor market equilibrium is where demand matches supply.
#4
What is the concept of frictional unemployment in labor markets?
Frictional unemployment occurs when there is a temporary mismatch between the skills or location of available workers and the requirements of available jobs.
ExplanationFrictional unemployment results from temporary skill or location mismatches.
#5
What is the concept of a labor market equilibrium wage?
The wage level where the quantity of labor supplied equals the quantity of labor demanded.
ExplanationEquilibrium wage is where supplied labor matches demanded labor.
#6
What is the substitution effect in labor economics?
The tendency of workers to switch to alternative activities as wages change
ExplanationWorkers shift to other activities with changing wages.
#7
What is the concept of human capital in labor economics?
The knowledge, skills, and experience possessed by individuals that contribute to their productivity
ExplanationHuman capital comprises skills and knowledge impacting productivity.
#8
What is the difference between nominal wage and real wage?
Real wage is adjusted for inflation, while nominal wage is not.
ExplanationReal wage accounts for inflation, unlike nominal wage.
#9
Which of the following is an example of labor market discrimination?
An employer refusing to hire individuals based on their race or gender
ExplanationRefusing employment based on race or gender is labor market discrimination.
#10
What is the impact of minimum wage laws on the labor market?
Minimum wage laws can lead to unemployment for low-skilled workers if set above the equilibrium wage.
ExplanationMinimum wage above equilibrium may cause unemployment for low-skilled workers.
#11
What is the theory of compensating wage differentials?
The theory that wages compensate workers for non-monetary aspects of a job, such as risk or undesirable working conditions
ExplanationWages adjust for non-monetary job aspects like risk.
#12
What is the difference between monopsony and perfect competition in labor markets?
In monopsony, there is only one buyer of labor, while in perfect competition, there are many buyers.
ExplanationMonopsony has one labor buyer; perfect competition has many.
#13
What is the impact of immigration on wages in the labor market?
Immigration increases wages for native-born workers in the short run but decreases wages in the long run.
ExplanationShort-term, immigration raises native-born workers' wages; long-term, it lowers wages.
#14
What is the concept of wage elasticity of labor supply?
The measure of how changes in wages affect the quantity of labor supplied.
ExplanationWage elasticity shows how wage changes affect labor quantity.
#15
What is the difference between a labor union and a labor market cartel?
A labor union represents workers' interests collectively, while a labor market cartel involves collusion among employers to fix wages and employment levels.
ExplanationUnions represent workers; cartels collude among employers for wage control.