1.
Which of the following is the best example of an equity-efficiency tradeoff:
A) When a budget surplus is present, the government can provide more welfare payments while providing more tax breaks for the wealthy.
B) Welfare programs reduce income inequality but also reduce the incentive for welfare recipients to work.
C) Employment services provided by state governments provide information that allows more workers to work and more job vacancies to be filled.
D) None of the above involves an equity-efficiency tradeoff.
2.
A national labor market occurs when:
A) there are many workers and firms in all localities in the nation.
B) there are effective barriers to immigration.
C) there are few workers and employers in most localities.
D) All of the above are correct.
E) None of the above is correct.
3.
Which of the following is an incorrect statement concerning internal labor markets?
A) The U.S. military operates using an internal labor market.
B) One reason for the existence of internal labor markets is that they reduce the hiring and search costs associated that exist as a result of imperfect information.
C) The use of internal labor markets provides incentives for workers at lower levels of the hierarchy to work harder to enhance their chances of promotion.
D) The use of internal labor markets always guarantees that the most highly qualified workers fill high level positions within a firm.
4.
Workers with limited job skills work in:
A) the primary labor market.
B) the secondary labor market.
C) the tertiary labor market.
D) None of the above is correct.
5.
For any given worker, total compensation is _______ earnings.
A) greater than or equal to
B) less than or equal to
C) equal to
D) sometimes greater than and sometimes less than

