Economics: Chapter 9 Test Review

The more productive a resource is, the more a firm is willing to pay for it.

• True
• False

As the price of a resource rises, firms are more willing to employ that resource.

• True
• False

Resource suppliers tend to be more willing and able to supply the resource as its price (wage) increases.

• True
• False

Some jobs pay more because they require a long and expensive training period.

• True
• False

Unions try to increase wages of their members by reducing the supply of labor and increasing the demand for union labor.

• True
• False

The derived demand for a resource arises from

• the cost of raw materials
• the number of workers in the labor market
• the demand for the product the resource produces.
• the value of the resource itself

Suppose the cost of machine-made cabinets increased. How would this affect the supply & demand graph for custom cabinet makers?

• The demand curve will shift to the right.
• the demand curve will shift to the left.
• the supply curve will shift right & demand curve will shift left.
• the supply curve will shift left.

Which of the following pairs are resource complements?

• lumber/plastics
• teachers/parents
• cab drivers/cabs
• truck drivers/railroads

Suppose more businesses began providing health insurance to their employees? How would this affect the labor market?

• the demand for labor would increase
• the supply of labor would increase
• the cost of labor would decrease
• the quantity of labor demanded would increase

Workers who have more education and experience earn more because they are 

• older
• better wage negotiators
• more productive
• more willing to take risks