1. Which of the following would be considered a real (as opposed to pecuniary) externality associated with migration?
Select one:
a. Capital owners in the origin will lose income as wages rise in response to reduced labor supply
b. More public services will be required in the destination and there will be excess capacity of public goods in the origin
c. Profits of capital owners at the origin will rise as migrants leave
d. Wages of destination workers will fall as migrants enter and add to labor supply
2. Questions 2 to 3 refer to the following graph.
The following probability distribution of wage offers is for Sally, who is currently unemployed and searching for a job:
If $8.50 is the acceptance wage, what is the probability of Sally finding her next wage offer acceptable?
Select one:
a. 0.25
b. 0.30
c. 0.50
d. 0.70
3. If $9.50 is the acceptance wage, what is the probability of Sally finding her next wage offer unacceptable?
Select one:
a. 0.25
b. 0.30
c. 0.50
d. 0.75
4. The probability of accepting the next wage offer is:
Select one:
a. higher, the higher is the acceptance wage
b. lower, the lower is the acceptance wage
c. lower, the higher is the acceptance wage
d. higher, the higher is unemployment compensation
5. The longer the expected length of tenure on the job:
Select one:
a. the higher the acceptance wage and the longer the expected job search duration
b. the higher the acceptance wage and the shorter the expected job search duration
c. the lower the acceptance wage and the longer the expected job search duration
d. the lower the acceptance wage and the shorter the expected job search duration
6. Internal labor markets are most likely to exist if:
Select one:
a. workers do not require extensive amounts of firm-specific training
b. there are substantial costs to the employer associated with worker turnover
c. costs of screening and recruiting job applicants are relatively low
d. workers ? Productivity does not increase with experience
7. Which of the following is not a benefit to employers of an internal labor market?
Select one:
a. A greater return from investments in specific training
b. A greater return from investment in general training
c. A solution to a principal-agent problem
d. Greater employee identification with the firm's objectives
8. Which of the following is a true statement?
Select one:
a. Unions accelerate the evolution of internal labor markets
b. Internal labor markets invite unionization
c. Both A. and B. are correct
d. Neither A. nor B. is correct
9. Because workers in internal labor markets are promoted on the basis of seniority:
Select one:
a. such markets are allocatively inefficient because seniority takes precedence over ability
b. dynamic efficiency is enhanced by removing a disincentive for older workers to pass along skills to younger workers
c. static efficiency is enhanced by allocating the most able workers to each job
d. some other scheme must be introduced, such as tournament pay, to improve efficiency in such markets