1. Suppose that all other nonwage aspects of the jobs in these two markets are identical. We would expect labor supply in B to increase if: a)the probability of job loss rises in B b)earnings are more variable in A c)job safety improves in A d)there are better prospects for advancement in A

2. a)Flow, Inc. is a more prestigious firm than Stock Co b)earnings are subject to greater variability at Stock, Co. c)Stock Co. offers better pension and insurance benefits than Flow, Inc. d)the demand for labor at Stock Co. exceeds the demand for labor at Flow, Inc. The wage rate paid workers at Flow, Inc. will most likely exceed that at otherwise identical Stock Co. if:

3. Currently, the minimum wage law does not apply to about 12% of non-supervisory workers. Assuming that all consequently displaced workers find jobs in the uncovered sector, an increase in the minimum wage will: a)make all workers better off b)cause a migration of workers from the uncovered to the covered sector c)create additional output in the uncovered sector of a lower value than the output lost in the covered sector d)cause an increase in economic rent to original workers in the uncovered sector

4. Consider a proposed law to deregulate the hair-care industry. Barbers would be allowed to do work previously confined to stylists, and the latter would no longer be required to pass strict licensure exams. Which outcome would you expect to result from this deregulation? a)A decrease in economic rent to current stylists b)A decrease in economic rent to current barbers c)An increase in economic rent to beauty school operators d)An increase in economic rent to workers in occupations in which displaced stylists find jobs

5. a)reduce job search duration by shifting the wage offer distribution to the left b)reduce job search duration by decreasing the acceptance wage and intensifying job search c)reduce job search duration by shifting the wage offer distribution to the right d)have no effect on job search duration, as the acceptance wage will decrease to offset the effect of the shifting wage offer distribution In addition to their regular unemployment benefits, a recent Washington state program offered an average of $562 to any job loser who became reemployed within 13 weeks of filing for unemployment compensation. Economic theory suggests that such a “bounty” scheme should: