1. Assume that worker productivity in Country X increases due to improved training. At the same time, there is a decrease in the labor force due to people moving out of Country X. What happens to the country's market equilibrium quantity of labor and wage rate?

a. The quantity of labor increases, and the wage rate increases.

b. The quantity of labor decreases, and the wage rate increases.

c. The quantity of labor and the wage rate both remain constant.

d. The effect on the quantity of labor is indeterminate, and the wage rate increases.

e. The quantity of labor increases, and the effect on the wage rate is indeterminate.



2. The number of units of output that a machine will produce increases, ceteris paribus. How will this change in productivity affect demand for the machine?

a. Demand for the machine will increase.

b. Demand for the machine will decrease.

c. There will be no change in demand for the machine.

d. Demand will not change, but quantity demanded will decrease.

e. Demand will not change, but quantity demanded will increase.



3. Based on the graph, which of the following factors can cause the market labor supply curve for the telecommunications industry to shift from S1 to S2? (The supply curve is shifting left)

a. A decrease in the number of workers qualified to work in telecommunications

b. A shift in cultural values toward work within telecommunications

c. A decrease in the number of domestic residents emigrating to foreign countries

d. A decrease in the wage rate of all telecommunications workers within the country

e. A decrease in the value of leisure time by all domestic telecommunications workers



4. If the price of a factor of production decreases, ceteris paribus, the suppliers of that factor will respond by

a. changing the quality

b. increasing the quantity available

c. increasing the productivity

d. decreasing the productivity

e. decreasing the quantity available