Chapter 4 Reading Quiz

1. Which of the following would be an example of derived demand?

1.  An increased demand for dogs leads to an increased demand for dog groomers 
2.  The invention of the ATM machine leads to lower demand for bank tellers 
3. Stricter immigration laws lead to a lower supply of labor 
4. hot weather leads to a higher demand for ice cream 

2.   The U.S. government requires mechanics to become trained and certified. How does this affect the market for mechanics?

1.  demand for mechanics increase and supply of mechanics decrease 
2. demand for mechanics decrease and supply of mechanics increase 
3. demand for mechanics increase and supply of mechanics increase 
4. demand for mechanics decrease and supply of mechanics decrease 

3.  Unemployment occurs when 

1. the supply of labor exceeds the demand for labor 
2. the demand for labor equals the supply of labor
3. the demand for labor exceeds the supply of labor
4. the demand for labor is less than the supply of labor 

4.  The table below displays the demand and supply schedule for babysitters

What is the equilibrium wage and quantity?

1. wage = $18, quantity 80 
2. wage = $17, quantity = 100
3. wage = $15, quantity = 60
4. wage = $19, quantity = 80 

5. Restrictions on immigration will have what effect on the labor market?

1.  the labor demand curve will shift right
2. the labor supply curve will shift left
3. the labor demand curve will shift left
4. the labor supply curve will shift right 

6.  ATM machines and online banking reduce the demand for bank tellers. Technology, in this case, is a(n)

1. aid to labor
2. complement to labor
3. example of derived demand
4. substitute for labor 

7.  Minimum wage is an example of a

1. price ceiling 
2. equilibrium wage
3. efficient wage
4. price floor 

8. Millions of people leave the labor force due to the pandemic. What effect does this have on the labor market?

1. the supply of labor increases and wages rise 
2. the supply of labor decreases and wages rise
3. the supply of labor decreases and wages fall
4. the supply of labor increases and wages fall 

9. A wage that is higher and ensures that workers can afford a basic standard of living is called a(n)

1. living wage
2. equilibrium wage
3. maximum wage
4. minimum wage 

10. The table below displays the demand and supply schedule for babysitters

If the government sets a minimum wage for babysitters at $19 per hour, this will result in a

1. surplus of 140 labor hours
2. shortage of 60 labor hours
3. surplus of 60 labor hours
4. shortage of 80 labor hours