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AP Microeconomics Labor Markets and Income — practice questions

Explore 21 free Labor Markets and Income questions in AP Microeconomics Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Labor Markets and Income questions and exercises with answers

Showing questions 1–21 of 21.

Most household income is made up of wages, salaries, commissions, tips and other:Read the answer and worked solution →Payments such as wages for labor and interest for financial capital are determined in:Read the answer and worked solution →A labor union seeks to change the balance of power between workers and:Read the answer and worked solution →A union changes bargaining by requiring employers to deal with workers:Read the answer and worked solution →Negotiations between unions and firms are sometimes called:Read the answer and worked solution →Without a union, labor market equilibrium occurs at the intersection of labor supply and:Read the answer and worked solution →Through negotiation, a union achieves a union wage that is, relative to the equilibrium wage:Read the answer and worked solution →Setting a union wage above the equilibrium wage produces, for union jobs, an:Read the answer and worked solution →If firms will not agree to the wages demanded, a union can threaten that workers will:Read the answer and worked solution →From a firm's point of view, the key question about union wages is whether they are matched by higher:Read the answer and worked solution →Firms facing union demands for higher wages may choose production methods that use more:Read the answer and worked solution →Substituting physical capital for labor in response to union wages results in increased:Read the answer and worked solution →Working full time at minimum wage, at 40 hours per week for 52 weeks, earns before taxes:Read the answer and worked solution →The 15,080 dollars earned at full-time minimum wage was compared with a 2016 public university year costing:Read the answer and worked solution →A union that wins higher wages without any productivity gain raises the firm's:Read the answer and worked solution →Labor markets are described as one example of a broader category, namely:Read the answer and worked solution →Match each labor market termRead the answer and worked solution →True or false: labor marketsRead the answer and worked solution →Order the union bargaining chainRead the answer and worked solution →Tap what belongs to each sideRead the answer and worked solution →Complete the union storyRead the answer and worked solution →

Worked practice questions

Most household income is made up of wages, salaries, commissions, tips and other:

  1. Labor income
  2. Rental income
  3. Lottery income
  4. Inherited wealth
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Correct answer: A. Labor income

1. Household income comes mainly from one source. 2. Most of our income is wages, salaries, commissions and tips. 3. These are described as other types of labor income. 4. Interest and rent make up much smaller shares. _Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 15 'Labor Markets and Income'_

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Payments such as wages for labor and interest for financial capital are determined in:

  1. Factor markets
  2. Product markets
  3. Foreign markets
  4. Futures markets
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Correct answer: A. Factor markets

1. Inputs to production are traded in their own markets. 2. Wages for labor and interest for financial capital are factor payments. 3. Each of these factor payments is determined in their respective factor markets. 4. Product markets instead trade finished goods. _Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 15 'Labor Markets and Income'_

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A labor union seeks to change the balance of power between workers and:

  1. Shareholders
  2. Employers
  3. Consumers
  4. Regulators
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Correct answer: B. Employers

1. A union exists to shift bargaining power. 2. A labor union seeks to change the balance of power between employers and workers. 3. It does so by requiring employers to deal with workers collectively. 4. That is instead of dealing with them as individuals. _Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 15 'Labor Markets and Income'_

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