MCQs on labour supply and wages.

1) Statistical studies in the United States have reached the conclusion which for most workers the response of labour supply to wage changes is

1. quite strong

2. not very strong

3. inverted

4. always zero.

2) One of the main reasons which people want to limit imports is the

1. fear which imports will decrease the income of Americans.

2. idea which cheap foreign labour destroys American jobs.

3. concept which if business benefits another country, it must harm the United States.

4. All of the above are correct.

3) Many fear which cheap foreign labour will destroy American jobs; in reality, wages in

1. the United States have risen spectacularly in the last 25 years as business grew.

2. countries which export to the United States are very low relative to the United States and show no sign of rising

3. countries which export to the United States have risen spectacularly in the last 25 years.

1. United States export companies are very low relative to wages in the same company in other countries.

2. All of the above are correct.

4) In the past, when the United States enjoyed a continuing business surplus, wages in the United States

1. were much lower than wages in countries which imported U.S. products.

2. were much higher than wages in countries which imported U.S. products.

3. were roughly the same as wages in countries which imported U.S. products.

4. fell throughout which period, enabling the continuing business surplus.

5. rose throughout which period, ending the business surplus.

5) The main reason why one nation businesss with another is to

1. save its natural resources from rapid depletion.

2. exploit the advantages of specialization.

3. eliminate the danger of retaliation from other nations.

4. improve political alliances.

6) One reason why nations business is because

1. trading provides opportunities to earn profits.

2. the rate of interest is not the same in all countries.

3. resources are not equally distributed to all nations.

4. some nations like to build one thing while others like to build another.