Title: Labor and Financial Markets
Course: TEST Course

Q: If the government increases the minimum wage, the social surplus would
- stay the same.
- increase.
- decrease.
A: decrease.

Q: An increase in minimum wage causes the social surplus to
- stay the same.
- increase.
- decrease.
A: decrease.

Q: Assume that currently banks pay 2% interest on money that customers deposit in savings accounts. As the overall amount of money held in savings accounts increases, in financial markets
- the demand for savings increases.
- both supply and demand are increasing.
- the supply of savings increases.
A: the supply of savings increases.

Q: As the number of people holding college degrees increases, assuming the demand for college educated labor stays constant, the wages of college educated people would
- increase as the supply of college educated labor increases.
- increase as the demand for jobs increases.
- decrease as the supply of college educated labor increases.
A: decrease as the supply of college educated labor increases.

Q: As the information technology advances and consumers buy products requiring more and more technology, the wages of people with high level programming and other technical skills would
- increase as the supply of high tech skills increases.
- decrease as the supply of high tech skills increases.
- increase as the demand for high tech skills increases.
A: increase as the demand for high tech skills increases.

Q: After a devastating hurricane, households try to secure loans to repair and rebuild. Other things equal, this would lead to
- an increase in interest rates of home repair loans as the supply for those loans decreased.
- a decrease in interest rates of home repair loans as the supply for those loans increased.
- an increase in interest rates of home repair loans as the demand for those loans increased.
A: an increase in interest rates of home repair loans as the demand for those loans increased.

Q: After earthquakes hit the California coast and damaged tens of thousands of cars, there was a growing demand and need for automotive repair, glass replacement, dent repair and repainting. In the labor market for car repair, the demand would be represented by
- car owners wanting car repairs and supply represented by automotive and glass repair and replacement companies.
- body shop workers looking for work and supply is represented by the automotive body shops and glass repair companies providing jobs.
- automotive body shops and glass repair and replacement companies, and supply represented by the automotive workers
A: automotive body shops and glass repair and replacement companies, and supply represented by the automotive workers

Q: After a tsunami washed over Hilo, Hawaii and surrounding towns it damaged thousands of boats, there was a growing demand for boat repair, glass replacement, dent repair and repainting. In the labor market for boat repair, the demand would be represented by
- boat owners wanting boat repairs and supply represented by boat body shops and glass repair and replacement companies.
- boat body shop workers looking for work and supply is represented by the boat body shops and glass repair companies providing jobs.
- boat body shops and glass repair and replacement companies, and supply represented by the boat workers.
A: boat body shops and glass repair and replacement companies, and supply represented by the boat workers.

Q: Advances in tax software such as TurboTax influenced the income tax preparer market in the following way:
- The supply for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.
- The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, the wages for tax preparer has increased
- The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.
A: The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.

Q: Advances in information technology reduced the cost of production of computers and other electronic devices. As a result,
- the supply of computers and electronic devices decreased and the price of these devices fell.
- the demand for computers and electronic devices increased and the price of these devices fell.
- the supply of computers and electronic devices increased and the price of these devices fell.
A: the supply of computers and electronic devices increased and the price of these devices fell.

Q: Online mortgage companies have been growing in numbers and size, and as a result, other things equal, traditional banks have to
- increase the interest on their mortgage loans as the demand for all mortgage loans increased.
- decrease the interest on their mortgage loans as the supply for all mortgage loans decreased.
- decrease the interest on their mortgage loans as the demand for traditional mortgage loans decreased.
A: decrease the interest on their mortgage loans as the demand for traditional mortgage loans decreased.

Q: Assume that currently banks pay 2% interest on money customers deposit in savings accounts. As the overall amount of money held in savings accounts increases, in financial markets, the interest rate paid on savings would
- increase.
- remain unaffected.
- decrease.
A: decrease.

Q: What effect over the last decade, has the increasingly efficient and inexpensive technology of online college courses had on the college textbook market?
- The supply for college textbooks has increased as a result there are fewer textbook publishing companies.
- The demand for textbooks has declined resulting in publishing companies increasing their demand of textbook editor jobs.
- The demand for physical textbooks have steadily decreased, and as a result more publishing companies are having less demand for high skilled textbook editor jobs.
A: The demand for physical textbooks have steadily decreased, and as a result more publishing companies are having less demand for high skilled textbook editor jobs.

Q: As the new technology of large capacity paint sprayers for house painting arrived in the market, what effect did it have on the house painting labor market?
- Painting companies supply of low skilled house painters decreased and the equilibrium price of wages for low skilled painters increased.
- The painting companies demand for higher skilled house painters decreased and the equilibrium price of wages for high skilled painters increased.
- Painting companies demand for low skilled house painters decreased and the equilibrium price of wages for low skilled painters decreased.
A: Painting companies demand for low skilled house painters decreased and the equilibrium price of wages for low skilled painters decreased.

Q: Many people have larger amounts of debt in America than before, and people in the market have become hesitant to take loans out for new cars. All other things being equal, what would car dealership do with their financing in this new market environment?
- They would increase the supply of car loans and increase the equilibrium price (interest rate) to remain competitive.
- They would decrease the supply of car loans and increase the equilibrium price (interest rate) to attract more car buyers.
- Dealership financing would decrease the supply of car loans and decrease the equilibrium price (interest rate) to make their car loans more attractive for people.
A: Dealership financing would decrease the supply of car loans and decrease the equilibrium price (interest rate) to make their car loans more attractive for people.

Q: The current economy is strong and many people are feeling confident about their future and ability to pay off debt. Because of this they are taking on more bank loans for things like new cars, renovating their homes, or buying new homes. Using the four step process with this type of market, what will banks most likely do with their loans?
- They would increase the supply of loans and decrease the interest rate.
- They would to decrease the quantity supplied of loans and decrease the interest rate.
- They would increase the quantity supplied of loans and increase the interest rate.
A: They would increase the quantity supplied of loans and increase the interest rate.