Principles of Macroeconomics 6Th Edition Frank Test Bank Full Chapter PDF

Principles of Macroeconomics 6th
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Chapter 06 TestBank - new
Student: ___________________________________________________________________________
1. In the twentieth century, average real wages have risen substantially:

A. only in the United States.
B. in industrial countries excluding the United States.
C. in industrial countries including the United States.
D. in neither the United States nor other industrial countries.
2. In the United Sates, the average annual rate of growth of real wages was fastest in the period:
A. 1960-1973.
B. 1960-1995.
C. 1996-2010.
D. 1973-1995.
3. The growth rate of average annual earnings in the United States from 1973 to 1995was:
A. higher than it was from 1960 to 1973.
B. lower than it was from 1960 to 1973.
C. the same as it was from 1960 to 1973.
D. roughly equal to zero.
4. Compared to the 1960 and 1973 period, average real earnings of workers ______ from 1973 to 1995 and then
______ from 1996 to 2010.
A. declined; grew more slowly
B. declined; declinedeven more
C. slowly; grew at about the same rate
D. grew more rapidly; declined
5. In the United States the real wages of the least-skilled, least educated workers have ______ and the wages of
best-educated, highest skilled workers have ______.
A. increased; increased
B. declined; increased
C. increased; declined
D. declined; remained constant
6. In the United States between 1970 and 2000, employment:

A. was constant, while the over-sixteen population increased.
B. decreased, while the over-sixteen population increased.
C. grew more rapidly than the over-sixteen population.
D. grew at approximately the same rate as the over-sixteen population.
7. Since the year2000, the share of the populationholding or actively looking forjobs have _______ in the United
States:
A. been record high.
B. increased.
C. remained approximately constant.
D. decreased.
8. One trend in labor markets is:

A. a decrease in average real wages in the United States and other industrial countries.
B. decreasing wage inequality in the United States.
C. weak rates of job creation in the United States since 1980.
D. a slowdown in real wage growth in the United States since 1973.

B. increasing wage inequality in the United States.
D. an increase in the rate of real wage growth since the early 1970s.
10. All of the following describe trends in U.S. labor markets except:
A. growing wage equality in the United States in recent decades.
B. a slowdown in real wage growth since the 1970s.
C. substantial growth in the level of employment in the United States.
D. substantial growth in real ages during the last century.
A. growing wage inequality in the United States in recent decades.
C. substantial growth in the level of employment in the United States since 2000.
D. substantial growth in real ages during the last century..
12. In the market for labor, the price of labor is the:

A. same as price of the product produced by the labor.
B. real wage.
C. marginal product of labor.
D. number of hours employed per year.
13. The demand for labor depends on ______ and _______.

A. the supply of labor; the marginal product of labor
B. the supply of labor; the price of output produced
C. the rate of price inflation; the price of the output produced
D. the marginal product of labor; the price of output produced
14. The marginal product of labor is the additional:

A. wage paid for an additional hour of work.
B. wage paid for an additional worker employed.
C. labor employed to produce one more unit of output.
D. output produced by one more worker.
15. According to the principle of diminishing returns to labor, if the amount of capital and other inputs are held
constant, employing additional workers:
A. increases output at an increasing rate.
B. increases output at a constant rate.
C. increases output at a decreasing rate.
D. decreases output at an increasing rate
16. The value of the marginal product of labor equals the marginal product of labor times the:
A. real wage.
B. nominal wage.
C. price of output.
D. quantity of labor.
17.
The following table provides information about production at the XYZ-TV Company.
Number of Workers TVs Produced Marginal Product Value of Marginal Product
0 0 --- ---
1 35 35 $35,000
2 68 33 $33,000
3 99 31 $31,000
4 128 29 $29,000
5 155 27 $27,000
How many workers will XYZ-TV Company hire if the going wage for TV production workers is $32,000?
A. 0
B. 1
C. 2
D. 3
18.
0 0 --- ---
1 35 35 $35,000
2 68 33 $33,000
3 99 31 $31,000
4 128 29 $29,000
5 155 27 $27,000
A. 0
B. 1
C. 2
D. 3
19.
0 0 --- ---
1 35 35 $35,000
2 68 33 $33,000
3 99 31 $31,000
4 128 29 $29,000
5 155 27 $27,000
A. 1
B. 2
C. 3
D. 4
20.
0 0 --- ---
1 35 35 $35,000
2 68 33 $33,000
3 99 31 $31,000
4 128 29 $29,000
5 155 27 $27,000
A. 0
B. 4
C. 5
D. More than 5
21.
High Tech, Inc. produces plastic chairs that sell for $10 each. The following table provides information about
how many plastic chairs can be produced per hour.
Number of Workers Chairs Produced Per Hour
0 0
1 10
2 18
3 24
4 28
5 30
How many workers will be hired if the hourly wage for workers is $70?
A. 1
B. 2
C. 3
D. 4
22.
0 0
1 10
2 18
3 24
4 28
5 30
A. 1
B. 2
C. 3
D. 4
23.
0 0
1 10
2 18
3 24
4 28
5 30
A. 0
B. 3
C. 5
D. More than 5
24. Firms will hire additional workers as long as the wage:

A. is less than the marginal product of labor.
B. equals the marginal product of labor.
C. is greater than the marginal product of labor.
D. is less than the value of the marginal product of labor.
25. An increase in the price of the output produced by labor will:

A. increase the supply of labor.
B. decrease the supply of labor.
C. increase the demand for labor.
D. decrease the demand for labor.
26. The introduction of a new technology that increases the productivity of labor will:
D. decrease the demand for labor
27. If the price of TVs produced by XYZ-TV Company falls from $1,000 to $750 per TV set, then the:
A. supply of labor to the XYZ-TV Company increases.
B. supply of labor to the XYZ-TV Company decreases.
C. demand for labor by the XYZ-TV Company increases.
D. demand for labor by the XYZ-TV Company decreases.
28. The demand for labor increases when the:
A. real wage increases.
B. real wage decreases.
C. value of the marginal product of labor increases.
D. value of the marginal product of labor decreases.
29. If the price of tables sold by All-Oak Table Co. increases from $400 to $500, then the:
A. supply of labor to All-Oak Table Co. increases.
B. supply of labor to All-Oak Table Co. decreases.
C. demand for labor by All-Oak Table Co. decreases.
D. demand for labor by All-Oak Table Co. increases.
30.
Production data for Joe's Pizza Parlor are as follows. For simplicity assume that labor is the only input. Each pizza
sells for $5.
Pizzas Baked Per Day

Number of Workers
0 0
1 10
2 18
3 24
4 30
5 32
A. 1
B. 2
C. 3
D. 4
31.
Production data for Joe's Pizza Parlor are as follows. For simplicity assume that labor is the only input. Each pizza
sells for $5.

Number of Workers
0 0
1 10
2 18
3 24
4 30
5 32
A. 1
B. 2
C. 3
D. 4
32. The minimum payment you are willing to accept to do a job is your:
A. nominal wage.
B. real wage.
C. reservation price.
D. value of marginal product.
33. An increase in the size of the working-age population:

A. increases labor demand.
B. decreases labor demand.
C. increases labor supply.
D. decreases labor supply.
34. As the real wage decreases, the quantity of labor demanded ______ and the quantity of labor supplied
_______.
A. increases; increases
B. increases; decreases
C. decreases; decreases
D. decreases; increases
35. Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages of
agricultural workers will ______ and employment of agricultural workers will _____.
A. increase; increase
B. increase; decrease
C. decrease; not change
D. decrease; decrease
36. Holding other factors constant, if computers allow factory workers to manufacture more products per hour, then the
real wages of factory workers will ______ and employment of factory workers will _____.
D. decrease; increase
37. Holding other factors constant, if a larger proportion of the population enters the labor force as a result of a growing
social acceptance of women working, then the real wages of workers will ______ and employment of workers will
_____.
38. Holding other factors constant, if oil prices rise relative to the prices of other products, then the real wages of oil
workers will ______ and employment of oil workers will _____.
39. Holding other factors constant, if the education and skills of the typical worker in an economy increases, then the
real wages of workers will ______ and employment of workers will _____.
40. If the existence of alternative opportunities makes people become less willing to work in poultry processing
plants, then the real wage of unskilled workers in poultry processing plants is predicted to ______ and the
employment of unskilled workers in poultry processing plants is predicted to ______.
C. increase; not change
41. Real wages increased in industrialized countries in the twentieth century because the demand for labor:
A. increased more rapidly than the supply of labor increased.
B. increased more slowly than the supply of labor increased.
C. increased, while the supply of labor decreased.
D. decreased, while the supply of labor increased.
42. Holding other factors constant, technological progress ______ the real wage and ______ employment.
C. increases; does not change
43. The two most important factors contributing to increased productivity in industrialized countries in the twentieth
century were:
A. higher relative prices and a larger labor supply.
B. higher relative prices and technological progress.
C. technological progress and increases in the capital stock.
D. technological progress and increases in the labor supply.
44. Long-term increases in productivity that have increased the demand for labor, and raised real wages, have
resulted primarily from ______ and _____.
A. technological progress; a modernized capital stock
B. technological progress; an increased labor supply
C. a modernized capital stock; skill-biased technological change
D. a modernized capital stock; an increased labor supply
45. Larger increases in the demand for labor than in the supply of labor explain:
A. the substantial increase in real wages.
B. the slowdown in real wage growth.
C. increasing wage inequality.
D. skill-biased technological change.
46. Slower growth in labor demand in combination with increases in labor supply explains ____________
accompanied by __________.
A. a slowdown in real wage growth; a decline in employment
B. a slowdown in real wage growth; rapid employment growth
C. a slowdown in real wage growth; increasing wage inequality
D. accelerated real wage growth; a decline in employment
47. Holding other factors constant, an increase in the capital stock ______ the real wage and ______ employment.
48. A war destroys much of the capital stock in the country of Omega. As a result, holding other factors constant, the
real wage in Omega will ______ and employment in Omega will ______.
49. As a result of a war in the country of Omega, refugees flee to the country of Alpha to seek employment.
Holding other factors constant, the influx of refugees will ______ the real wage in Alpha and ______
employment in Alpha.
C. decrease; decrease
50. Factors increasing the U.S. labor supply and thereby contributing to the slowdown in real-wage growth that began
in the 1970s include ______ and _____.
A. skill-biased technological change; globalization
B. increased labor force participation by women; the coming-of-age of the baby-boom generation
C. technological progress; diminishing returns to labor
D. increasing wage inequality; globalization
51. The slowdown in the growth of real wages in the United States since 1973 is consistent with a concurrent:
A. slowdown in productivity gains.
B. slowdown in the growth of the working age population.
C. slowdown in immigration into the country.
D. speedup in the rate of inflation.
52. Slower real wage growth in the U.S. since the 1970s accompanied by rapid job growth, can be explained by:
A. skill-biased technological change.
B. globalization.
C. a productivity slowdown accompanied by an increase in the labor supply.
D. a productivity slowdown accompanied by a decrease in the labor supply.
53. In recent decades, slower growth in the demand for labor accompanied by an accelerated growth in the supply
of labor in the U.S. explains:
A. negativereal wage growth and double-digit rates of unemployment. B negative real wage growth and increasing
wage inequality.
B. negative real wage growth and an increase in the number of people with jobs.
C. increasing wage inequality and double-digit rates unemployment.
54. Two explanations for increasing wage inequality are ______ and ________.
B. increased labor supply; a slowdown in productivity growth
C. increased worker mobility; transition aid
D. globalization; skill-biased technological change
55. Initially, workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers
give domestic consumers access to cheaper shoes produced abroad, which causes domestic shoe prices fall. At
the same time, foreign consumers purchase more computers, raising the relative price of computers. As a result
of these changes, the demand for labor in the shoe industry ______ and the demand for labor in the computer
industry ______.
C. decreases; increases
D. decreases; decreases
56. Initially, workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers
give domestic consumers access to cheaper shoes produced abroad, so domestic shoe prices fall. At the same
time, foreign consumers purchase more computers, raising the relative price of computers. As a result of these
changes, wages in the shoe industry ______ and wages in the computer industry ______.
C. decrease; increase
57. Macroland produces dishes and glassware. Before trade, a set of dishes sells for $100 and a set of glasses sells
for $50. When Macroland opens to trade, foreign demand for domestically produced china is strong, raising the
price of a set of dishes to $125. But foreign competition reduces the demand for domestically produced glasses, so
they now sell for $25 a set. Assuming workers cannot move between industries, the wages of workers producing
dishes will ______ and the wages of workers producing glasses will ____.
B. increase; not change
C. increase; decrease
58. Globalization ______ the wages of workers in the exporting industries and ______ the wages of workers in
the import-competing industries.
A. raises; raises
B. raises; lowers
C. raises; does not change
D. lowers; raises
59. Increasing wage inequality results when international trade leads to ______ wages for workers in exporting
industries and ______ wages for workers in importing industries.
A. higher; higher
B. higher; lower
C. lower; no change in
D. lower; higher
60. An increase in the demand for workers producing computers for export versus producing agricultural products that
can be imported more cheaply from abroad is an example of how increasing wage inequality can result from:
A. the diminishing marginal product of labor.
B. the diminishing marginal product of capital.
C. increasing reservation prices.
D. globalization.
61. Globalization can increase wage inequality in the United States if international competition is primarily in industries
requiring ______ workers.
A. many
B. few
C. highly-skilled
D. low-skilled
62. The increase in wage inequality resulting from globalization can be reversed through:
A. revoking the principle of comparative advantage.
B. increases in worker mobility.
C. decreases in worker mobility.
D. making markets more competitive.
63. Technological change that affects the marginal products of high-skilled and low-skilled workers differently is called
______ technological change.
A. capital-labor
B. skill-biased
C. marginal-productivity
D. high-low
64. Skill-biased technological change increases wage inequality by altering the ______ high-skilled workers relative to
low-skilled workers.
A. reservation price of
B. mobility of
C. supply of
D. demand for
65. The introduction of word processing software that increases the demand for workers with computer skills relative to
those without such skills is an example of:
A. increasing reservation prices.
B. skill-biased technological change.
C. the diminishing marginal product of labor.
D. globalization.
66. Most economists generally argue ______ trying to block technological advances because these
technological advances ______.
A. in favor of; cause the economy to grow to rapidly
B. in favor of; increase wage inequality
C. against; are necessary for improved standards of living
D. against; promote wage equality
67. A Luddite is:

A. someone who opposes the introduction of new technologies.
B. a worker whose real wage rises as a result of globalization.
C. a fictional character from American folk history.
D. a consumer who refuses to buy imported goods, even if they are cheaper.
68. If the Luddites had succeeded in ______ the introduction of labor-saving machinery, economic growth in
Great Britain may have been ______.
A. blocking; slower
B. blocking; more rapid
C. promoting; slower
D. promoting; more rapid
69. Skill-biased technological has different effects on the marginal products of ______ workers and ______
workers.
A. male; female
B. union; nonunion
C. government; private-sector
D. higher-skilled; lower-skilled
70. Globalization and skill-biased technological change have contributed to:

A. the long-term growth in real wages.
B. the slowdown in productivity since 1973.
D. high rates of employment in Western Europe.
71. From an economic perspective, the best response to increased wage inequality is to:
A. block future technological change.
B. stop all international trade.
C. provide transition aid to disadvantaged workers.
D. make skill-biased technological change illegal.
72. Each person who is 16 years or older is considered to be in one of the following categories:
A. employed, unemployed, or discouraged worker.
B. part-time worker, full-time worker, or unemployed.
C. part-time worker, full-time worker, or out of the labor force.
D. employed, unemployed, or out of the labor force.
73. A person 16 years or older who does not work, but is actively looking for work, is officially classified as:
A. employed.
B. unemployed.
C. chronically unemployed.
D. out of the labor force.
74. Who from among the following would be counted as unemployed?

A. A person with a part-time job who wants and is looking for a full-time job.
B. A person who is willing to work and has looked for a job in the last week.
C. A person who is willing to work but has not looked for a job in two months.
D. All of these people would be counted as unemployed.
75. Who from among the following would be classified as out of the labor force?
A. A person with a part-time job who wants and is looking for a full-time job.
B. A person who is willing to work and has looked for a job in the last week.
C. A person who is willing to work but has not looked for a job in two months.
D. None of these people would be classified as out of the labor force.
76. Which of the following events would increase the unemployment rate, if nothing else changed?
A. Unemployed workers leave the labor force.
B. Employed workers leave the labor force.
C. Workers from outside the labor force become employed.
D. Unemployed workers become employed.
77.
Based on the information in the table, how big is the labor force?
Population 16 and older 1,000,000
Participation Rate 80%
Employed Workers 720,000
A. 576,000
B. 720,000
C. 800,000
D. 1,000,000
78.
Based on the information in the table, what is the unemployment rate?
A. 7.2%
B. 8.0%
C. 10.0%
D. 28.0%
79.
Based on the information in the table, how many people are out of the labor force?
A. 144,000
B. 200,000
C. 280,000
D. 576,000
80. Who from among the following would be classified as employed?

A. Brenda Smith, an 18 year old full-time college student.
B. Mario Faubert, a NHL hockey player at home sick with the flu.
C. Jack Little, a 21 year old new college graduate actively looking for his first job.
D. Sarah Lopez, a retired public school teacher.
81. Who from among the following would be classified as out of the labor force?
A. Brenda Smith, an 18 year old college student employed part-time at a fast food restaurant.
B. Mario Faubert, a NHL hockey player at home sick with the flu.
C. Jack Little, a 21 year old new college graduate actively looking for his first job.
D. Amanda Pie, a full-time homemaker.
82. The labor force equals the number of people:
A. employed.
B. aged 16 years and older.
C. both employed and unemployed.
D. employed, unemployed and discouraged.
83. The unemployment rate equals the number of people:

A. unemployed.
B. unemployed divided by the number employed.
C. unemployed divided by the labor force.
D. unemployed plus discouraged workers divided by the labor force.
84. The participation rate is the number of people:

A. employed divided by the labor force.
B. employed divided by the population aged 16 years and older.
C. employed and unemployed divided by the labor force.
D. employed and unemployed divided by the population aged 16 years and older.
85. In a country with 200 million people aged 16 years and older, 120 million are in the labor force, and 114 million are
employed, what is the participation rate?
A. 40 percent
B. 57 percent
C. 60 percent
D. 95 percent
86. In a small town of 100 people, there are 10 children under 16, 10 retired people, 60 people with full-time jobs, 3
people with part-time jobs, 3 full-time students over 16, and 4 full-time homemakers. The remaining people did not
have jobs, but wanted jobs. What is the unemployment rate in this town?
A. 10.0%
B. 11.0%
C. 13.7 %
D. 14.5%
87. In a small town of 100 people, there are 10 children under 16, 10 retired people, 60 people with full-time jobs, 3
people with part-time jobs, 3 full-time students over 16, and 4 full-time homemakers. The remaining people did not
have jobs, but wanted them.What is the participation rate in this town?
A. 63.0%
B. 72.0%
C. 81.1%
D. 87.5%
88. The number of unemployed divided by the labor force equals the:
A. labor-force participation rate.
B. employment rate.
C. unemployment rate.
D. duration rate.
89. The labor force divided by the working age population equals the:
A. unemployment rate.
B. employment rate.
C. participation rate.
D. population rate.
90. Data for an economy show that the unemployment rate is 6 percent, the participation rate is 60 percent, and 200
million people 16 years or older are not in the labor force. How many people are in the working-age population in
this economy?
A. 333 million
B. 500 million
C. 800 million
D. 1.20 billion
91. Data for an economy show that the unemployment rate is 6 percent, the participation rate 60 percent, and 200
million people 16 years or older are not in the labor force. How many people are unemployed this economy?
A. 12.0 million
B. 18.0 million
C. 28.8 million
D. 43.2 million
92. Data for an economy show that the unemployment rate is 6 percent, the participation rate 60 percent, and 200
million people 16 years or older are not in the labor force. How many people are employed in this economy?
A. 30 million
B. 188 million
C. 282 million
D. 300 million
93. Data for an economy shows that the unemployment rate is 10%, the participation rate 80 percent, and 200
million people 16 years or older are not in the labor force. How many people are in the working-age population in
this economy?
A. 250 million
B. 800 million
C. 1.0 billion
D. 1.6 billion
94. Data for an economy shows that the unemployment rate is 10%, the participation rate 80 percent, and 200 million
people 16 years or older are not in the labor force. How many people are in the labor force in this economy?
A. 80 million
B. 200 million
C. 800 million
D. 1.0 billion
95. Income lost by the unemployed is an example of the ______ cost of unemployment, while the additional spending
to control crime is an example of the _____ cost of unemployment.
A. social; psychological
B. economic; social
C. economic; psychological
D. psychological; economic
96. Depression and lost self-esteem are examples of the ______ costs of unemployment, while the lost income and
tax revenue are examples of the ______ costs of unemployment.
A. social; psychological
B. economic; social
C. economic; psychological
D. psychological; economic
97. An "unemployment spell" is a period during which:

A. the unemployment rate is less than 10 percent.
B. the unemployment rate exceeds 15 percent.
C. an unemployed individual leaves the labor force and then returns.
D. an individual is continuously unemployed.
98. Leaving the labor force or finding a job are two ways that:
A. a person can become a discouraged worker.
B. a person can become an involuntary part-time worker.
C. an unemployment spell can begin.
D. an unemployment spell can end.
99. The towns of Jekyll and Hyde each have a labor force of 2,000 people. In Jekyll, 500 people were
unemployed for the entire year, while the rest of the labor force was employed continuously. In Hyde, every
member of the labor force was unemployed for three months and was employed for nine months. The average
duration of unemployment spells over the year was ______ months in Jekyll and ______ months in Hyde.
A. 3; 3
B. 3; 9
C. 12; 3
D. 12; 9
100. The duration of an unemployment spell is a measure of the:

A. income lost while unemployed.
B. length of time a spell of unemployment lasts.
C. number of times during a year a worker becomes unemployed.
D. number of workers unemployed during a specific period of time.
101. Workers whose spells of unemployment are broken up by brief periods of employment or withdrawal from the labor
force are referred to as ______ workers
A. short-term unemployed
B. discouraged
C. long-term unemployed
D. chronically unemployed
102. In an economy of 100 people in the labor force, if 10 people are unemployed for 4 weeks during the year, and 30
people are unemployed for 8 weeks during the year, and the rest are employed continuously throughout the
year, then the average duration of unemployment in this economy is:
A. 5 weeks.
B. 6 weeks.
C. 7 weeks.
D. 8 weeks.
103. People who say that they would like to have a job, but have not made an effort to find a job in the past four weeks,
are called ______ workers.
A. unemployed
B. involuntary part-time
C. discouraged
D. chronically unemployed
104. Jim Brown would like to work, but has not looked for work in the past four weeks because he does not believe
any jobs are available. In the official employment statistics, Jim is classified as:
A. employed.
B. unemployed.
C. out of the labor force.
D. underemployed.
105. Susan Suarez would like to work forty hours per week, but can only find twenty hours per week of work. In the
official employment statistics, Susan is classified as:
A. employed.
B. unemployed.
C. out of the labor force.
D. underemployed.
106. Who of the following would be considered a discouraged worker?

A. Ray wants to work forty hours per week, but can only find work for twenty hours per week.
B. Anna Marie has been looking for a job every day for the last month, but has not been hired.
C. Frank would like to work, but has not looked for work because he believes no jobs are available.
D. Melissa has a Ph.D. in physics, but is currently employed full time driving a taxi.
107. Who from among the following is counted as employed?

A. Ray wants to work forty hours per week, but can only find work for twenty hours per week.
B. Anna Marie spends all of her time taking care of her children at home.
C. Frank would like to work, but has not looked for work because he believes no jobs are available.
D. Martin has been offered several jobs in the past four weeks, but has chosen not to accept any of the offers.
108. Involuntary part-time workers are:

A. chronically unemployed.
B. considered out of the labor force.
C. short-term unemployed workers.
D. not counted as unemployed.
109. Two groups of workers not counted as unemployed in the official unemployment statistics are ______ workers.
A. chronically unemployed and short-term unemployed
B. chronically-unemployed and discouraged
C. chronically unemployed and involuntary part-time
D. discouraged and involuntary part-time
110. Frictional unemployment is:

A. the unemployment that results when people retire or leave the labor force.
B. the additional unemployment not captured in official statistics resulting from discouraged workers and
involuntary part-time workers.
C. the extra unemployment that occurs during periods of recession.
D. short-term unemployment that is associated with the process of matching workers with jobs.
111. Structural unemployment is:
A. the additional unemployment not captured in official statistics resulting from discouraged workers and
B. the extra unemployment that occurs during periods of recession.
C. short-term unemployment that is associated with the process of matching workers with jobs.
D. long-term and chronic unemployment that exists even when the economy is producing at a normal rate.
112. Cyclical unemployment is:

A. the additional unemployment not captured in official statistics resulting from discouraged workers and
B. the extra unemployment that occurs during periods of recession.
C. short-term unemployment that is associated with the process of matching workers with jobs.
D. long-term and chronic unemployment that exists even when the economy is producing at a normal rate.
113. Heterogeneity and the dynamic nature of labor markets are the principal causes of ______ unemployment.
A. cyclical
B. chronic
C. structural
D. frictional
114. Which of the following is an example of cyclical unemployment?

A.Dora lost her job when the textile factory closed. She does not have skills to work in another industry and has
been unemployed for over a year.
B Marsha was laid off from her job with the airline because the recession reduced demand for airline travel. She
. expects to get her job back when the economy picks up.
C. George is an unskilled worker who mows lawns in the summer, but is unemployed the rest of the year.
D Jim had a job as an engineer, but quit when his wife was transferred to another state. He looked for a month
. before finding a new job that he liked.
115. Which of the following is an example of structural unemployment?

B Marsha was laid off from her job with the airline because the recession has reduced the demand for airline travel.
. She expects to get her job back when the economy picks up.
CAlan, a software engineer, lost his job when the internet startup he worked for went bankrupt. He interviewed with
. five companies in the area before taking a job with another firm in the industry.
D Jim had a job as an engineer, but quit when his wife was transferred to another state. He looked for a month
. before finding a new job that he liked.
116. Which of the following is an example of frictional unemployment?

B Marsha was laid off from her job with the airline because the recession has reduced the demand for airline travel.
. She expects to get her job back when the economy picks up.
C. George is an unskilled worker who mows lawns in the summer, but is unemployed the rest of the year.
DHector looked for a job for five weeks after finishing college. He turned down several jobs that didn't fit his skills,
. but now has a job that requires the expertise he gained in college.
117. The costs of unemployment are lowest (and perhaps even negative) for ______ unemployment.
A. frictional
B. cyclical
C. structural
D. cyclical and structural
118. Martha did not like her job as a receptionist, so she quit and is looking for one that better suits her artistic talents.
Ting Pei would like to work, but employers are not willing to hire him because he does not speak English. Martha is
______ unemployed and Ting Pei is ______ unemployed.
A. frictionally; structurally
B. structurally; frictionally
C. cyclically; structurally
D. structurally; cyclically
119. Frictional unemployment may be economically beneficial if:

A. its psychological costs are borne only by the unemployed worker.
B. losses in economic output are small.
C. it leads to a better match between worker and job.
D. the social costs are limited to smaller tax revenues collected.
120. Arthur is an unskilled worker who is currently unemployed. He has been offered a job that pays $40 a day, but he
is currently receiving unemployment insurance benefits equal to $50 a day, so he chooses not to accept the job
and to continue looking for a better job. Arthur is ______ unemployed.
A. frictionally
B. structurally
C. cyclically
D. not
121. A long-term mismatch between the skills of some workers and the jobs available is a principal cause of ______
unemployment.
A. cyclical
B. structural
C. global
D. frictional
122. Periods of unusually low production in an economy result in ______ unemployment.

A. cyclical
B. environmental
C. structural
D. frictional
123. Features of the labor market that are likely to cause structural unemployment include all of the following except:
A. labor unions.
B. minimum wage laws.
C. unemployment compensation.
D. differences in the skills and experience of workers.
124. Minimum wage laws contribute to structural unemployment by:

A. keeping wages above the market-clearing level.
B. keeping wages below the market-clearing level.
C. allowing unemployed workers to search longer or less intensively for jobs.
D. forcing unemployed workers to take the first job offered to them.
125. Assume the minimum wage exceeds the market-clearing wage. If there is an increase in the supply of labor
then the number of workers who are unemployed will ______, and the number of workers who are employed will
_______.
C. increase, not change
126.
Based on the labor market diagram below, if the minimum wage is set at $10 per hour, there will be ______
unemployed workers.
A. 7
B. 15
C. 22
D. 27
127.
Based on the labor market diagram below, if the minimum wage is increased from $10 to $12 per hour, the
numbered of unemployed workers will increase by ______ workers.
A. 5
B. 8
C. 13
D. 15
128. Labor unions contribute to structural unemployment by:

129. Assume that the union wage already exceeds the market-clearing wage. If the union wage is increased, holding
other factors constant, then the number unemployed ______ and the number employed _____.
130. Structural unemployment is increased when the wage is kept above the market-clearing wage by:
A. unemployment insurance.
B. worker mobility.
C. skill-biased technological change.
D. labor unions.
131.
Based on the figure, if a union contract requires that workers be paid $25 per hour, there will be ______
unemployed workers.
A. 9
B. 12
C. 21
D. 31
132.
Based on the figure, if a union contract requires that the wage workers are paid be raised from $25 to $30 per
hour, the number of unemployed workers will increase by ______ workers.
A. 8
B. 10
C. 17
D. 18
133. If there is a floor on wages created by a minimum wage, union contracts, or other factors, then a decline in the
marginal productivity of low-skilled workers will ______ the demand for low-skilled workers and ______ the
number of unemployed workers.
134. Assume the union contract wage exceeds the market-clearing wage. If there is an increase in the labor supply, then
the number of unemployed workers will ______ and the number of employed workers will _______.
135. An increase in unemployment insurance benefits will:

A. increase the demand for labor.
B. decrease the demand for labor.
C. increase job search efforts of unemployed workers.
D. decrease job search efforts of unemployed workers.
136. Unemployment insurance contributes to structural unemployment by:

137. When unemployment insurance benefits exceed the wages a worker could earn when employed, the worker
will have an incentive to:
A. remain unemployed longer than otherwise.
B. have his/her unemployment insurance benefits cancelled.
C. accept the first job offered.
D. decrease his/her reservation price.
138. Structural unemployment will decrease when:

A. the minimum wage is increased.
B. the minimum wage is decreased.
C. unemployment insurance benefits are increased.
D. union wages are increased.
139. Government regulations that increase the cost to the employer of hiring workers will:
A. increase the demand for labor.
B. decrease the demand for labor.
C. increase the supply of labor.
D. decrease the supply of labor.
140. Health and safety regulations in the labor market:

A. are always efficient because they improve working conditions.
B. should be evaluated by comparing their costs to their benefits.
C. are necessarily inefficient if they impose additional costs on employers.
D. can lead to an increase in frictional unemployment.
141. Government health and safety regulations or anti-discrimination laws can reduce real wages by:
A. decreasing the demand for labor.
B. decreasing the supply of labor.
C. reducing employer costs.
D. increasing worker productivity.
Chapter 06 TestBank - new Key
1. In the twentieth century, average real wages have risen substantially:
A. only in the United States.
B. in industrial countries excluding the United States.
C. in industrial countries including the United States.
D. in neither the United States nor other industrial countries.
The United States and most industrial countries around the world have seen substantial increases in average
real wages over the past 100 years.
AACSB: Reflective Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 06-01
Topic: Three Important Labor Market Trends
2. In the United Sates, the average annual rate of growth of real wages was fastest in the period:
A. 1960-1973.
B. 1960-1995.
C. 1996-2010.
D. 1973-1995.
The decade of the 1960’s, and spilling into the 70’s, saw large increases in average real wages.
Blooms: Remember
Difficulty: 01 Easy
3. The growth rate of average annual earnings in the United States from 1973 to 1995was:
A. higher than it was from 1960 to 1973.
B. lower than it was from 1960 to 1973.
C. the same as it was from 1960 to 1973.
D. roughly equal to zero.
The U.S. growth rate of average annual earnings slowed in the early 1970’s, and was negative until 1995.

Blooms: Remember
Difficulty: 01 Easy
4. Compared to the 1960 and 1973 period, average real earnings of workers ______ from 1973 to 1995 and then
______ from 1996 to 2010.
A. declined; grew more slowly
B. declined; declinedeven more
C. slowly; grew at about the same rate
D. grew more rapidly; declined
The U.S. growth rate of average annual earnings started to decline in the early 1970’s, and declined annually
until 1995. Average annual earnings started growing again after 1996, in part because of the Internet, but at a
rate lower than seen in the 1960s.

Blooms: Remember
Difficulty: 02 Medium
5. In the United States the real wages of the least-skilled, least educated workers have ______ and the wages of
best-educated, highest skilled workers have ______.
A. increased; increased
B. declined; increased
C. increased; declined
D. declined; remained constant
Unskilled workers in the United States have lost ground to global competition whereas the highest skilled
workers have gained.

Blooms: Remember
Difficulty: 01 Easy
6. In the United States between 1970 and 2000, employment:
A. was constant, while the over-sixteen population increased.
B. decreased, while the over-sixteen population increased.
C. grew more rapidly than the over-sixteen population.
D. grew at approximately the same rate as the over-sixteen population.
Employment grew rapidly in the post-1980’s due to an influx of working women.

Blooms: Remember
Difficulty: 01 Easy
7. Since the year2000, the share of the populationholding or actively looking forjobs have _______ in the United
States:
A. been record high.
B. increased.
C. remained approximately constant.
D. decreased.
Employment grew rapidly in the post-1970’s, but peaked in 2000. Since then the share of the population holding
oractively looking for jobs have steadily decreased.

Blooms: Remember
Difficulty: 01 Easy
B. decreasing wage inequality in the United States.
D. a slowdown in real wage growth in the United States since 1973.
Real wages in the United States grew quickly in the post-World War II years, but this strong growth rate fell
after 1973.

Blooms: Remember
Difficulty: 01 Easy
B. increasing wage inequality in the United States.
D. an increase in the rate of real wage growth since the early 1970s.
Recent decades have brought a pronounced increase in wage inequality in the United States.

Blooms: Remember
Difficulty: 01 Easy
A. growing wage equality in the United States in recent decades.
C. substantial growth in the level of employment in the United States.
D. substantial growth in real ages during the last century.
In recent decades the United States has seen increasing wage dispersion: the rich are getting richer.
Blooms: Remember
Difficulty: 01 Easy
A. growing wage inequality in the United States in recent decades.
C. substantial growth in the level of employment in the United States since 2000.
D. substantial growth in real ages during the last century..
Employment grew rapidly in the post-1970’s, but peaked in 2000. Since then the share of the population holding
oractively looking for jobs have steadily decreased.

Blooms: Understand
12. In the market for labor, the price of labor is the:
A. same as price of the product produced by the labor.
B. real wage.
C. marginal product of labor.
D. number of hours employed per year.
In the market for labor, the "price" is the real wage paid to workers in exchange for their services.

Blooms: Remember
Difficulty: 01 Easy
Topic: Supply and Demand in the Labor Market
13. The demand for labor depends on ______ and _______.
A. the supply of labor; the marginal product of labor
B. the supply of labor; the price of output produced
C. the rate of price inflation; the price of the output produced
D. the marginal product of labor; the price of output produced
When a business hires workers, the business is interested in both the productivity of the worker and the price of
the output the worker produces.

Blooms: Remember
14. The marginal product of labor is the additional:
A. wage paid for an additional hour of work.
B. wage paid for an additional worker employed.
C. labor employed to produce one more unit of output.
D. output produced by one more worker.
The marginal product of labor is the additional output produced by one more worker.

Blooms: Remember
Difficulty: 01 Easy
15. According to the principle of diminishing returns to labor, if the amount of capital and other inputs are held
constant, employing additional workers:
A. increases output at an increasing rate.
B. increases output at a constant rate.
C. increases output at a decreasing rate.
D. decreases output at an increasing rate
This is the definition of "diminishing returns to labor."
Blooms: Remember
Difficulty: 01 Easy
16. The value of the marginal product of labor equals the marginal product of labor times the:
A. real wage.
B. nominal wage.
C. price of output.
D. quantity of labor.
The value of the marginal product of labor equals the marginal product of labor times the price of output.

Blooms: Remember
Difficulty: 01 Easy
17.
Number of Workers TVs Produced Marginal Product Value of Marginal

Product
0 0 --- ---
1 35 35 $35,000
2 68 33 $33,000
3 99 31 $31,000
4 128 29 $29,000
5 155 27 $27,000
A. 0
B. 1
C. 2
D. 3
The firm will hire 2 workers. At that level, the value of marginal product is $33,000 whereas the cost is only
$32,000. Note that a third worker would only add $31,000 of value but cost an additional $32,000.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
18.
0 0 --- ---
1 35 35 $35,000
2 68 33 $33,000
3 99 31 $31,000
4 128 29 $29,000
5 155 27 $27,000
A. 0
B. 1
C. 2
D. 3
$30,000. Note that a fourth worker would only add $29,000 of value but cost an additional $30,000.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
19.

Product
0 0 --- ---
1 35 35 $35,000
2 68 33 $33,000
3 99 31 $31,000
4 128 29 $29,000
5 155 27 $27,000
A. 1
B. 2
C. 3
D. 4
$28,000. Note that a fifth worker would only add $27,000 of value but cost an additional $28,000.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
20.

Product
0 0 --- ---
1 35 35 $35,000
2 68 33 $33,000
3 99 31 $31,000
4 128 29 $29,000
5 155 27 $27,000
A. 0
B. 4
C. 5
D. More than 5
The firm will hire no workers. The value of marginal product for the first worker is $35,000 whereas the cost is
$60,000.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
21.
0 0
1 10
2 18
3 24
4 28
5 30
A. 1
B. 2
C. 3
D. 4
Since the marginal product is diminishing when more workers are hired, the value of the marginal product is
also diminishing. While the first worker adds 10 chairs per hour (10 - 0), the second worker only adds 8 chairs
per hours (18-10) and so forth. The marginal value of marginal product is therefore: $100 for the first worker (10
* $10), $80 for the second worker (8 * $10), $60 for the third worker (6 * $10), $40 for the forth worker (4 * $10),
and $20 for the fifth and final worker (2 * $10). So the firm will hire 2 workers. At that level, the value of
marginal product is $80 per hour whereas the cost is only $70 per worker. Hiring additional workers will reduce
profitas the value of the marginal product for the third worker is only $60 per hour.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
22.
0 0
1 10
2 18
3 24
4 28
5 30
A. 1
B. 2
C. 3
D. 4
per hours (18-10) and so forth. The marginal value of marginal product is therefore: $100 for the first worker
(10 * $10), $80 for the second worker (8 * $10), $60 for the third worker (6 * $10), $40 for the forth worker (4 *
$10), and $20 for the fifth and final worker (2 * $10). So the firm will hire 4 workers. At that level, the value of
marginal product is $40 per hour whereas the cost is only $30 per worker. Hiring additional workers will
reduce their profit, as the value of the marginal product for the fifth worker is only $20 per hour.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
23.
0 0
1 10
2 18
3 24
4 28
5 30
A. 0
B. 3
C. 5
D. More than 5
and $20 for the fifth and final worker (2 * $10). So the firm will hire no workers. The value of marginal product
for the first worker is $100 whereas the cost is $120. Hiring the first worker would result in negative profit.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
24. Firms will hire additional workers as long as the wage:
A. is less than the marginal product of labor.
B. equals the marginal product of labor.
C. is greater than the marginal product of labor.
D. is less than the value of the marginal product of labor.
This is an application of the marginal benefit-marginal cost rule.

Blooms: Remember
Difficulty: 01 Easy
25. An increase in the price of the output produced by labor will:
D. decrease the demand for labor.
When the price that the firm can sell output increases, more workers will be desired. The labor demand curve
shifts to the right.

Blooms: Remember
Difficulty: 01 Easy
26. The introduction of a new technology that increases the productivity of labor will:
D. decrease the demand for labor
Increased worker productivity means more output per worker is produced, which in turn causes firms to want
to hire or demand more workers.

Blooms: Remember
Difficulty: 01 Easy
27. If the price of TVs produced by XYZ-TV Company falls from $1,000 to $750 per TV set, then the:
A. supply of labor to the XYZ-TV Company increases.
B. supply of labor to the XYZ-TV Company decreases.
C. demand for labor by the XYZ-TV Company increases.
D. demand for labor by the XYZ-TV Company decreases.
When prices fall for the goods and services produced by workers, the demand for labor falls too.

Blooms: Understand
28. The demand for labor increases when the:
A. real wage increases.
B. real wage decreases.
C. value of the marginal product of labor increases.
D. value of the marginal product of labor decreases.
The demand for labor increases when the value of the output rises. Economists call this an increase in
the "value of marginal product." Note that the quantity of labor demanded will increase when real wages
decrease, however that describes a movement along a stationary demand for labor curve rather than a shift of
the curve itself.

Blooms: Remember
Difficulty: 01 Easy
29. If the price of tables sold by All-Oak Table Co. increases from $400 to $500, then the:
A. supply of labor to All-Oak Table Co. increases.
B. supply of labor to All-Oak Table Co. decreases.
C. demand for labor by All-Oak Table Co. decreases.
D. demand for labor by All-Oak Table Co. increases.
The value of the final good has fallen, so as a result, the demand for labor decreases.

Blooms: Understand
30.
Production data for Joe's Pizza Parlor are as follows. For simplicity assume that labor is the only input. Each
pizza sells for $5.

Number of Workers
0 0
1 10
2 18
3 24
4 30
5 32
A. 1
B. 2
C. 3
D. 4
also diminishing. While the first worker adds 10 pizzas per hour (10 - 0), the second worker only adds 8 pizzas
* $5), $40 for the second worker (8 * $5), $30 for the third worker (6 * $5), $30 for the forth worker (6 * $5), and
$10 for the fifth and final worker (2 * $5). So Joe hires 2 workers as the value of marginal product is higher than
$35 for two workers. Any other number of workers reduces profits, as the added cost per hour would exceed
the added value from additional pizza.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
31.
Production data for Joe's Pizza Parlor are as follows. For simplicity assume that labor is the only input. Each
pizza sells for $5.

Number of Workers
0 0
1 10
2 18
3 24
4 30
5 32
A. 1
B. 2
C. 3
D. 4
also diminishing. While the first worker adds 10 pizzas per hour (10 - 0), the second worker only adds 8 pizzas
and $10 for the fifth and final worker (2 * $5). So Joe hires 1 worker as the value of marginal product is higher
than $45 for only one worker. Any other number of workers reduces profits, as the added cost per hour would
exceed the added value from additional pizza.
AACSB: Analytic
Blooms: Apply
Difficulty: 03 Hard
32. The minimum payment you are willing to accept to do a job is your:
A. nominal wage.
B. real wage.
C. reservation price.
D. value of marginal product.
The minimum payment you are willing to accept to do a job is your reservation price.

Blooms: Remember
Difficulty: 01 Easy
33. An increase in the size of the working-age population:
A. increases labor demand.
B. decreases labor demand.
C. increases labor supply.
D. decreases labor supply.
When the working-age population increases, the potential labor supply increases.
Blooms: Remember
Difficulty: 01 Easy
34. As the real wage decreases, the quantity of labor demanded ______ and the quantity of labor supplied
_______.
C. decreases; decreases
As real wages decrease, firms desire more employees. Conversely, as real wages decrease, fewer people
find it worthwhile to work or workers desire fewer hours.

Blooms: Remember
Difficulty: 01 Easy
35. Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages
of agricultural workers will ______ and employment of agricultural workers will _____.
If food prices decline then the producers of food will be less inclined to hire workers, so the demand for labor
shifts left Wages and employment will decrease.
AACSB: Analytic
Blooms: Analyze
Difficulty: 03 Hard
36. Holding other factors constant, if computers allow factory workers to manufacture more products per hour,
then the real wages of factory workers will ______ and employment of factory workers will _____.
If workers become more productive, then producers of computers will be more inclined to hire workersso the
demand for labor shifts right. Wages and employment will increase.
AACSB: Analytic
Blooms: Analyze
Difficulty: 03 Hard
37. Holding other factors constant, if a larger proportion of the population enters the labor force as a result of a
growing social acceptance of women working, then the real wages of workers will ______ and employment
of workers will _____.
If social attitudes become more accepting of women workers, then the supply of labor shifts right. The
number of workers will grow but increased competition for jobs will decrease wages
AACSB: Analytic
Blooms: Analyze
Difficulty: 03 Hard
38. Holding other factors constant, if oil prices rise relative to the prices of other products, then the real wages of
oil workers will ______ and employment of oil workers will _____.
If oil prices rise, then producers of oil will be more inclined to hire workers and there will be more demand for
oil workers (demand shifts right). As a result, wages and employment will increase.
AACSB: Analytic
Blooms: Analyze
Difficulty: 03 Hard
39. Holding other factors constant, if the education and skills of the typical worker in an economy increases,
then the real wages of workers will ______ and employment of workers will _____.
If worker quality increases, then more workers are desired because they are more productive. Demand for labor
will shift right, increasing wages and employment.
AACSB: Analytic
Blooms: Analyze
Difficulty: 03 Hard
40. If the existence of alternative opportunities makes people become less willing to work in poultry processing
plants, then the real wage of unskilled workers in poultry processing plants is predicted to ______ and the
employment of unskilled workers in poultry processing plants is predicted to ______.
If the work setting becomes more favorable outside of poultry processing plants, then the supply of workers will
shift left and there will be more competition for the remaining poultry processing workers, causing wages will
increase and employment to decrease.

Blooms: Analyze
Difficulty: 03 Hard
41. Real wages increased in industrialized countries in the twentieth century because the demand for labor:
A. increased more rapidly than the supply of labor increased.
B. increased more slowly than the supply of labor increased.
C. increased, while the supply of labor decreased.
D. decreased, while the supply of labor increased.
Labor markets follow the same principles as goods and services markets: when both supply and demand rise
at the same time, it is certain that quantity will increase but uncertain whether price will rise or fall. When
wages rose in this case, the demand shift was greater than the supply shift.

Blooms: Remember
Difficulty: 01 Easy
Topic: Explaining the Trends in Real Wages and Employment
42. Holding other factors constant, technological progress ______ the real wage and ______ employment.
Technical progress almost always increases worker productivity, which makes workers more desirable to
employers. The demand for labor will shift right and therefore puts upward pressure on wages and
increase employment too.

Blooms: Understand
43. The two most important factors contributing to increased productivity in industrialized countries in the twentieth
century were:
A. higher relative prices and a larger labor supply.
B. higher relative prices and technological progress.
C. technological progress and increases in the capital stock.
D. technological progress and increases in the labor supply.
Industrial countries invested heavily in human and physical capital in the twentieth century. These investments
greatly increased productivity.

Blooms: Remember
Difficulty: 01 Easy
44. Long-term increases in productivity that have increased the demand for labor, and raised real wages, have
resulted primarily from ______ and _____.
B. technological progress; an increased labor supply
C. a modernized capital stock; skill-biased technological change
D. a modernized capital stock; an increased labor supply
Technological progress and a modernized capital stock will increase worker efficiency, which increases the
demand for labor and puts upward pressure on wages.

Blooms: Remember
45. Larger increases in the demand for labor than in the supply of labor explain:
A. the substantial increase in real wages.
B. the slowdown in real wage growth.
D. skill-biased technological change.
When both labor supply and labor demand rise at the same time, it is certain that quantity will increase but
uncertain whether wages will rise or fall. If wages rise, we know the demand shift was larger than the
supply shift.

Blooms: Understand
46. Slower growth in labor demand in combination with increases in labor supply explains ____________
accompanied by __________.
A. a slowdown in real wage growth; a decline in employment
B. a slowdown in real wage growth; rapid employment growth
C. a slowdown in real wage growth; increasing wage inequality
D. accelerated real wage growth; a decline in employment
When both labor supply and labor demand rise at the same time, it is certain that quantity will increase but
uncertain whether wages will rise or fall. If the demand shift was smaller than the supply shift there is
downward pressure on real wages but an increase in employment.

Blooms: Understand
47. Holding other factors constant, an increase in the capital stock ______ the real wage and ______
employment.
Increases in the capital stock make workers more productive, which increases the demand for labor and puts
upward pressure on wages and increases employment.

Blooms: Understand
48. A war destroys much of the capital stock in the country of Omega. As a result, holding other factors constant,
the real wage in Omega will ______ and employment in Omega will ______.
A smaller capital stock in Omega causes workers to be less productive, which decreases the demand for
labor and puts downward pressure on wages. With lower wages, workers desire fewer hours of work and
employment decreases too.

Blooms: Understand
49. As a result of a war in the country of Omega, refugees flee to the country of Alpha to seek employment.
Holding other factors constant, the influx of refugees will ______ the real wage in Alpha and ______
employment in Alpha.
The work force in Alpha has increased, which increases the supply of labor and puts downward pressure
on real wages but increases employment levels in Alpha.
Blooms: Understand
50. Factors increasing the U.S. labor supply and thereby contributing to the slowdown in real-wage growth
that began in the 1970s include ______ and _____.
A. skill-biased technological change; globalization
B. increased labor force participation by women; the coming-of-age of the baby-boom generation
C. technological progress; diminishing returns to labor
D. increasing wage inequality; globalization
The expanded role of women in the labor force and huge numbers in the baby-boom generation shifted
labor supply out greatly. That shift put downward pressure on wage rates in the U.S.

Blooms: Remember
Difficulty: 01 Easy
51. The slowdown in the growth of real wages in the United States since 1973 is consistent with a concurrent:
A. slowdown in productivity gains.
B. slowdown in the growth of the working age population.
C. slowdown in immigration into the country.
D. speedup in the rate of inflation.
A slowdown in productivity gains will reduce (or even reverse) the growth in the demand for labor. Slower
increases in the demand for labor will reduce the growth in real wages and a decrease in the demand for labor
will reduce real wages as demand shifts left.

Blooms: Remember
Difficulty: 01 Easy
52. Slower real wage growth in the U.S. since the 1970s accompanied by rapid job growth, can be explained
by:
A. skill-biased technological change.
B. globalization.
C. a productivity slowdown accompanied by an increase in the labor supply.
D. a productivity slowdown accompanied by a decrease in the labor supply.
A productivity slowdown occurred in the early 1970’s, reducing the increase in the demand for labor. Also, the
expanded role of women in the labor force and huge numbers of baby-boomers increased labor supply and put
downward pressure on wage rates in the U.S.

Blooms: Remember
Difficulty: 01 Easy
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banishment.’[559]
Donald was again in Edinburgh about the end of August 1725. On
the 2d of September, George Lockhart of Carnwath, writing from
Edinburgh to the Chevalier St George, states, amongst other matters
of information regarding his party in Scotland, that Daniel
Murchison (as he calls him) ‘is come to Edinburgh, on his way to
France’—doubtless charged with a sum of rents for Seaforth. ‘He’s
been in quest of me, and I of him,’ says Lockhart, ‘these two days,
and missed each other; but in a day or two he’s to be at my country-
house, where I’ll get time to talk fully with him. In the meantime, I
know from one that saw him, that he has taken up and secured all
the arms of value in Seaforth’s estate, which he thought better than
to trust them to the care and prudence of the several owners; and the
other chieftains, I hear, have done the same.’[560]
The Commissioners on the Forfeited Estates conclude their final
report in 1725 by stating that they had not sold the estate of William
Earl of Seaforth, ‘not having been able to obtain possession, and
consequently to give the same to a purchaser.’
In a Whig poem on the Highland Roads, written in 1737, Donald is
characteristically spoken of as a sort of cateran, while, in reality, as
every generous person can now well understand, he was a high-
minded gentleman. The verses, nevertheless, as well as the appended
note, are curious:
‘Keppoch, Rob Roy, and Daniel Murchisan,
Cadets or servants to some chief of clan,
From theft and robberies scarce did ever cease,
Yet ‘scaped the halter each, and died in peace.
This last his exiled master’s rents collected,
Nor unto king or law would be subjected.
Though veteran troops upon the confines lay,
Sufficient to make lord and tribe a prey,
Yet passes strong through which no roads were cut,
Safe-guarded Seaforth’s clan, each in his hut.
Thus in strongholds the rogue securely lay,
Neither could they by force be driven away,
Till his attainted lord and chief of late
By ways and means repurchased his estate.’[561]
1722.
‘Donald Murchison, a kinsman and servant to the
Earl of Seaforth, bred a writer, a man of small stature, but full of spirit and
resolution, fought at Dunblane against the government anno 1715, but continued
thereafter to collect Seaforth’s rents for his lord’s use, and had some pickerings
with the king’s forces on that account, till, about five years ago, the government
was so tender as to allow Seaforth to re-purchase his estate, when the said
Murchison had a principal hand in striking the bargain for his master. How he fell
under Seaforth’s displeasure, and died thereafter, is not to the purpose here to
mention.’
The end of Donald’s career can scarcely now be passed over in this
slighting manner. The story is most painful. The Seaforth of that day
—very unlike some of his successors—was unworthy of the devotion
which this heroic man had shewn to him. When his lordship took
possession of the estates which Donald had in a manner preserved
for him, he discountenanced and neglected him. Murchison’s noble
spirit pined away under this treatment, and he died in the very prime
of his days of a broken heart.[562] He lies in a remote little churchyard
on Cononside, in the parish of Urray, where, I am happy to say, his
worthy relative, Sir Roderick I. Murchison, is at this time preparing
to raise a suitable monument over his grave.
When Dr Johnson and James Boswell, in their journey to the
Hebrides, 1773, came to the inn at Glenelg, they found the most
wretched accommodation, and would have been without any comfort
whatever, had not Mr Murchison, factor to Macleod in Glenelg, sent
them a bottle of rum and some sugar, ‘with a polite message,’ says
Boswell, ‘to acquaint us, that he was very sorry he did not hear of us
till we had passed his house, otherwise he should have insisted on
our sleeping there that night.’ ‘Such extraordinary attention,’ he
adds, ‘from this gentleman to entire strangers, deserves the most
honourable commemoration.’ This gentleman, to whom Johnson
also alludes with grateful admiration of his courtesy in the Journey
to the Western Islands, was a near relative of Donald Murchison.
A high wind shook the crops of Lothian, Sep. 1.

particularly damaging the pease. It was
considered ‘a heavy stroke,’ as the people thereabouts lived much on
pease-meal. Apropos to this fact, Wodrow 1722.
speaks of an individual who had much
ploughing to execute, and who found it advantageous to feed his
horses on pease-bannocks: ‘he finds it a third cheaper [than corn],
and his horses fatter and better.’[563] It is curious that this farmer,
‘abnormis sapiens,’ came to the same point which Baron Liebig has
attained in our age, by scientific investigation, as to the nutritive
qualities of pease.
The extensive coal-field of East Lothian gave occasion for several

efforts in the mechanical arts, which might be regarded as early and
before their time, when the general condition of the country is
considered. Some years before the Revolution, the Earl of Winton
had drained his coal-pits in Tranent parish, by tunnels cut for a long
way through solid rock, on such a scale as to attract the attention of
George Sinclair, professor of natural philosophy in Glasgow, who, in
the preface to his extraordinary work, Satan’s Invisible World
Discovered, speaks of them as something paralleling the cutting of
the Alps by Hannibal. Such a mode of taking off the water from a
coal-mine, where the form of the ground admitted it, was certainly of
great use in days when as yet there were no steam-engines to make
the driving of pumps easy.[564]
The forfeited estate of the Earl of Winton having been bought in
1719 by the York Buildings Company, a new and equally surprising
addition was at this time made to the economy of the coal-works, in
the form of a wooden railway, between one and two miles long,
connecting the pits with the salt-works at Prestonpans and the
harbour at Port-Seton. A work so ingenious, so useful, and
foreshewing the iron ways by which, in our age, the industrial
prospects of the world have been so much advanced, comes into
strong relief when beheld in connection with the many barbarisms
amidst which it took its rise. But the oddity of its associations does
not end here, for, when a Highland army came down to the Lowlands
twenty-three years afterwards, seeking with primitive arms to restore
the House of Stuart, the first of its battles was fought on the ground
crossed by this railway, and General Cope’s cannon were actually
fired against the clouded Camerons[565] from a position on the
railway itself!
There was published in Edinburgh a 1723. Jan.
poem, entitled the Mock Senator
—‘pretended to be translated from an Arabian manuscript, wherein,
under feigned and disguised names, the author seems to lash some
persons in the present administration.’ The magistrates—whom we
have seen exercising a pretty sharp censorship over the newspaper
press—‘committed to prison Mr Alexander Pennecuik, the supposed
author of this poem, and discharged the hawkers to sell or disperse
the same.’[566]
At this time, two criminalities of the Mar.

highest class occurred amongst persons of
rank in Scotland.
On the 30th of March, Mrs Elizabeth Murray, ‘lady to Thomas
Kincaid, younger, of Gogar-Mains,’ was found dead on the road from
Edinburgh to that place, with all the appearance of having been
barbarously murdered. It was at once, with good reason, concluded
that the horrible act had been perpetrated by her own husband. He
succeeded in escaping to Holland.[567]
Pennecuik, the burgess-poet, has a poem on the murder of Mrs
Kincaid by her husband, from which it would appear that she had
been an amiable and long-suffering woman, and he a coarse and
dissolute man. He adds a note at the end, ‘Ensign Hugh Skene
engaged in the plot.’[568]
Only three weeks later (April 22), Sir James Campbell of Lawers
was foully murdered at Greenock by his apparent friend, Duncan
Campbell of Edramurkle. The facts are thus related in a
contemporary letter. ‘Lawers had been in a treaty of marriage with
[Campbell of] Finab’s daughter, which Edramurkle was very active to
get accomplished, out of a seeming friendship for Lawers. After the
marriage articles were agreed upon, they went together to make a
visit to the young lady, and, in return, came to Greenock on Friday
the 19th last [April], where they remained Saturday and Sunday—
Edramurkle all the while shewing the greatest friendship for Lawers,
and Lawers confiding in him as his own brother. Upon the Saturday,
pretending to Lawers that he had use for a pistol, he got money from
him to buy one, which accordingly he did, with ball and powder. The
use he made of this artillery was to discharge two balls into Lawers’s
head, while he was fast asleep, betwixt three and four on Monday’s
morning; and which balls were levelled under his left eye, and went
through his head, sloping to the back-bone 1723.
of his neck ... he was found in a sleeping
posture, and had not moved either eye or hand.
‘The fellow went immediately off in a boat for Glasgow, and from
thence came here [Edinburgh], the people in the house having no
suspicion but that Lawers was asleep, till about eleven o’clock, when
they found him as above, swimming in his blood. Upon recollection
on several passages which happened with respect to Duncan
Campbell, they presently found him to have been the murderer, and
caused the magistrates of Greenock write to the magistrates of
Glasgow to apprehend him; but he being gone for Edinburgh, the
provost wrote in to our provost here, whereupon there was a search
here ... but the villain is not as yet found.
‘The occasion of this execrable murder is said by the murderer’s
friends to be to prevent Lawers going back in the marriage, whereof
he was then apprehensive; and being a relation of the bride’s, and
very active in bringing on that courtship, the devil tempted him to
that unparalleled cruelty. But we rather believe that it was to rifle his
pockets, for his breeches were from under his head, and nothing but
a Carolus and four shillings in them; whereas it is most certain that
Lawers always carried a purse of gold with him, and more especially
could not but have it when he intended to celebrate his marriage.’[569]
Campbell was extensively advertised for as ‘a tall thin man, loot-
shouldered, pock-pitted, with a pearl or blindness in the right eye,’
dressed in ‘a suit of gray Duroy clothes, plain-mounted, a big red
coat, and a thin light wig, rolled up with a ribbon;’ ‘betwixt 30 and 40
years of age;’[570] and a hundred guineas were offered for his
apprehension; but we do not hear of his having ever been brought to
justice.
Sir Alexander Murray of Stanhope, Peeblesshire, was one of those

men who, possessed of some talent and insight, are so little under
the government of common prudence and good temper, that they
prove rather a trouble than a benefit to their fellow-creatures. In
youth, during the life of his father, he married a beautiful and
accomplished woman, Grizel Baillie, grand-daughter by her father of
the patriot Robert Baillie of Jerviswood, unjustly put to death in
1684, and by her mother of the eminent 1723.
statesman Patrick Hume, Earl of
Marchmont; but after four years of unhappy life, the lady had been
separated from him in 1714, after which time she lived for a long
series of years in her father’s family, in the enjoyment of universal
esteem and respect. Sir Alexander was led by his ardent speculative
mind into a series of projects which left him in the middle of life a
broken man, and an object of pity to the public. His case is the more
deplorable, that many of his ideas were founded upon a just
conception of the wants and the capabilities of his country, and only
required means and favourable circumstances to have been carried
out to his own and the general advantage.
At this date, he bought a great peninsula of Argyleshire territory,
named Ardnamurchan, which he desired, by mining and improved
methods of agriculture and social economy, to make a model for the
redemption of the entire kingdom from barbarism, sloth, and
poverty. He believed the mountains throughout much of the West
Highlands and Hebrides to be crossed by mineral veins of great
value, and that it was possible from these to realise a great amount of
wealth. As to improvement of the surface, it was his belief—contrary
to the general impression—that the best plan was to commence a
course of improvement upon the tops of the hills. He had observed
traces of ancient tillage on the high grounds of Peeblesshire, and,
pondering on the matter, had come to see that, the high grounds
being naturally most liable to humidity, from the clouds settling
upon them, it was of importance to the low grounds that the higher
should be drained first. This being effected, and the surplus water led
along the hillsides in trenches or canals, he would have the
administration of moisture over the surface in a great measure in his
own hands. What the Argyleshire and Inverness chiefs thought of
such a plan amidst their semi-diluvial existence, we do not learn, but
we may imagine something of it.
Sir Alexander tells us that he found his barony of twenty-four Scots
miles long occupied by 1352 persons, among whom there was not
one devoted to any mechanic art or trade. He tells us that, in one
year, he drained a large tract of hilly and boggy ground, one-fourth
part of which next year yielded him a hundred and fifty pounds’
worth of hay at fourpence per stone. He also commenced mining
works, in connection with which there rose a village named New
York, containing about 500 persons, many of whom were skilled
English workmen. These mines, however, he afterwards leased to the
York Buildings Company. He was the first 1723.
person who introduced any kind of trade
into the district, and he assures us that, in his efforts at general
improvement he spent large sums of his own patrimony. Yet, while
benefiting the inhabitants in this way, he was the subject of jealousy
amongst the better class of people, who regarded him as an alien, a
Lowlander, and a spy upon their actions. His cattle were ham-strung
or stolen, and his sheep forced over precipices. The buildings on his
property were set on fire. There were even plans formed to murder
him, from which it was a wonder that he escaped. Strange to say, ten
years of such difficulties did not suffice to disgust him with
Ardnamurchan, and he is found, first in 1732, and again in 1740,
appealing to Walpole and to parliament for assistance to carry out
his plans, all that he required being an abolition of the heritable
jurisdictions which enslaved the lower classes to their landlords, and
a flotilla of gun-boats to maintain law and order in the country.[571]
An Edinburgh newspaper notices the death, on the 18th of May
1743, of Sir Alexander Murray of Stanhope, baronet, ‘to whom may
be justly applied that beautiful passage from Seneca: “Ecce
spectaculum dignum, ad quod respiciat Deus! ecce par Deo dignum,
vir fortis cum malâ fortunâ compositus!”’ The writer of the article on
Ardnamurchan in the New Statistical Account of Scotland, states
that the plough has long passed over the site of New York, and that
no trace of it remains in the district, excepting in a few English
names scattered among the native population.
It may be remarked as to Sir Alexander’s mining schemes in
Ardnamurchan, that in a portion of the district—namely, the valley of
Strontian—lead-mines have been successfully worked at intervals
since his time, the proprietor occasionally realising from £1000 to
£1500 a year. The mineral strontites, from which was deduced the
earth strontia, was discovered here, and named from Strontian.
There was a prevalent belief in the reign of George II. that many
valuable minerals might be obtained amongst the Highland
mountains, if there were a possibility of working them. The actual
discovery of marble in a few places served to support the notion. A
very prosaic poet thus alludes to the matter about 1737:
‘No more with stucco need we vessels lade,
Enough thereof has been at Kelso made.[572]
Nor need our jamms with foreign marble shine,
There’s beauteous marble at the Craig of Boin.
Yea, Ross and Sutherland rocks of marble shew,
Which vie in whiteness with the driven snow,
And black-veined marble is in Perthshire found,
Wherewith Banffhouse is ribatted around.’
The poet adds by way of explanation: 1723.

‘Craig of Boin is a rock of marble, veined
and diversified with various colours, now a part of the Earl of
Findlater’s estate, but formerly belonging to Mr Ogilvie of Boin, from
whom Louis XIV. of France got so much of the said marble as
finished one of the finest closets in Versailles.’ ‘Sir James Ramsay of
Banff, in Perthshire, after he had built his mansion-house, found out
a quarry of jet-black marble, whereupon he pulled the freestone
ribats out of the windows, and put marble ones in their place.’[573]
Soon after this time, we find a society in activity at Edinburgh, ‘for
promoting Natural Knowledge,’ which in 1743 invited ‘noblemen,
gentlemen, and others, who have discovered or may discover any
unusual kinds of earths, stones, bitumens, saline or vitriolic
substances, marcasites, ores of metals, and other native fossils,
whose uses and properties they may not have an opportunity of
inquiring into by themselves, to send sufficient samples of them,
with a short account of the places where and the manner in which
they are found, directed to Dr Andrew Plummer, one of the
secretaries to the Philosophical Society, and the Society undertake,
by some of their number, to make the proper trials at their own
charge, for discovering the nature and uses of the Minerals, and to
return an answer to the person by whom they were sent, if they are
judged to be of any use or can be wrought to advantage.’[574]
To return to personal matters connected with the speculative
baronet of Stanhope—the beauty, accomplishments, and moral
graces of Lady Murray made it the more unfortunate that she should
have been united to one who, with whatever merits, was of too
unsteady nature to have ever made any woman happy. It is alleged
that, on the second day of their wedded life, a ferocious and
unsatisfiable jealousy took possession of his mind, in consequence of
seeing his young wife dancing with a friend of his own named
Hamilton. He could not dispossess himself of the idea that she loved
another better than him. His behaviour to her would have proved
him to have a slight touch of insanity in his 1723.
composition, even if his ill-calculated
projects had not been sufficient to do so. Lady Murray was an
admired and popular person in both Scottish and English society.
Amongst her friends, the chief authors of the day stood high. Gay
introduces her into the group of goodly dames who welcomed Pope
back from Greece—that is, congratulated him on his completion of
the translation of Homer. After speaking of Lady Mary Wortley
Montagu, he says:
‘The sweet-tongued Murray near her side attends.’
He here alluded to her fascinating powers as a songstress, which she

is said to have exercised with marvellous effect in singing the songs
of her native land. Lady Murray wrote in her latter days a memoir of
her parents, which was published in 1822, and is one of the most
charming pieces of biography in the language.[575]
On the 14th of October 1721, when Lady (then Mrs) Murray was
living in her father’s house in Westminster, a footman of her brother-
in-law, Lord Binning, named Arthur Gray, a Scotsman, was led by an
insane passion to invade her chamber in the middle of the night,
armed with a drawn sword in one hand and a pistol in the other. All
the rest of the family being asleep, she felt how far removed she was
from help and protection, and therefore parleyed with the man in the
gentlest terms she could use, to induce him to leave her room; but
half an hour was thus spent in vain. At length, watching an
opportunity, she pushed him against the wall, seized his pistol with
one hand, and with another rang the bell. Gray then ran off. He was
tried for the offence, and condemned to death, but reprieved. The
affair made of course a great deal of noise, and was variously
regarded, according to the feelings of individuals. All persons, good
and amiable, like Mrs Murray herself, sympathised with her in the
distress and agitation which it gave her, and admired the courage
and presence of mind she had displayed. The poor outcast poet
Boyse represented this generous view of the case in the verses To
Serena, which he wrote in Mrs Murray’s honour:
‘’Twas night, when mortals to repose incline,
And none but demons could intrude on thine,
When wild desire durst thy soft peace invade,
And stood insulting at thy spotless bed.
Urged all that rage or passion could inspire,
Death armed the wretch’s hand, his breast was fire.
You more than Briton saw the dreadful scene,
Nor lost the guard that always watched within,’ &c.[576]
A different class of feelings was 1723.

represented by Mrs Murray’s friend, Lady
Mary Wortley Montagu, who wrote a ballad on the occasion, full of
levity and something worse, which may be found in the work quoted
below.[577] This jeu d’esprit Mrs Murray resented in a manner which
was felt to be unpleasant by Lady Mary, who with difficulty obtained
a reconciliation through the intercession of her sister, the Countess
of Mar.[578]
An Edinburgh newspaper of this date May 9.

makes an announcement of a very homely
and simple kind, but from which one may nevertheless draw a few
inferences illustrative of the age. It is ‘to give notice, that there is a
fine bullock to the value of £20 sterling to be killed at Dalkeith the
14th of May, and to be exposed to sale the 16th instant; and whoever
has a mind for any of the said bullock, let them repair to the
fleshmarket of Dalkeith against the hours of nine and ten o’clock in
the morning, on the said 16th day of May, where they shall be kindly
entertained by the owners of the said ox: likewise you shall have him
more reasonable in proportion than any beef was sold in Scotland
this year of God. For your encouragement, you shall have his
principal pieces, such as his back-sayes, his fore-sayes, breasts,
runners, flanks, hook-bones, marrow-bones, collop-pieces, and
rump-pieces, all at 4s. Scots per pound, and his other pieces at 3s.
per pound; or, if you please to buy it by the lump without weighing,
they shall be welcome. The said ox is two ells and one inch high; in
length from the root of the ear to his hip-bone, two yards three
quarters; it is calculated by all tradesmen that ever did see him, that
he will have ten stone-weight of tallow in his belly. He is one of the
same country breed, bought by George Lamb, drover in Greenlaw,
from the Right Honourable Lord Hopetoun in the year 1721. There is
none in this age ever did see any in this place of Britain like him; I
doubt if any such as him be, or to be equalised in England at this day.
He has been fed this two years, and he is only six years old just
now.’[579]
Mr Wodrow was never long without some 1723. Aug.
perilous affair to grieve over. ‘We have,’ says
he at this date, ‘lamentable accounts of the growth of Episcopal
Jacobite meeting-houses in the north, especially in Angus. The
Commission [of the General Assembly] has sent up an address about
them.’[580]
In the summer of the previous year, a chapel for the use of those in
communion with the Church of England according to law, was
opened at the foot of Blackfriars’ Wynd, in Edinburgh, with ‘an altar
and pulpit handsomely adorned.’ The newspapers of the day inform
us—‘Some impious persons, in contempt of all laws human and
divine, have demolished several of the glass-windows; but it’s hoped
that care will be taken to prevent such scandalous abuses in time
coming.’[581]
The summer of this year was remarked to be unusually dry and

sultry, with little wind. The air seemed stagnant, and the water
unwholesome. Vast abundance of flies resulted, and a bloody flux
became prevalent. ‘In one quarter of the parish [of Eastwood, in
Renfrewshire],’ says Wodrow, ‘I saw nineteen sick persons in one day
[August 23], and all of them save one of the flux.’ ‘I have never seen
so much sickness in Eastwood for twenty years.’[582]
A symptom of the gradual softening away Nov. 7.

of the sombre habits of the people was
exhibited in the earlier part of this year, in the commencement of
what was called the Assembly in Edinburgh, by which was meant an
arrangement for a weekly meeting of the younger people of both
sexes, for the purpose of dancing. The adventure was at first on a
very modest scale, and the place of meeting—‘in the great hall in
Patrick Steil’s Close’—might be considered as obscure.[583] The people
who patronised it were chiefly of those at once Tories in politics and
Episcopalians in religion, who, all through 1723.
the last century, stood in opposition to the
general feelings and habits of their countrymen. They were doubtless
well satisfied of the legitimate and even laudable character of their
design; yet it appears they felt themselves put on the defensive before
the public, and were not a little solicitous to give their project a fair
appearance. It was loudly proclaimed that the improvement of
manners, the imparting of a ‘genteel behaviour,’ was in view; the
utility of healthful exercise was insinuated; and a great point was
made of the balances to be handed to the poor, for whose benefit no
regulated charitable institution as yet existed. Great care was also
professedly taken to insure perfect propriety on the part of the
company. The ball opened at four in the afternoon, and was
rigorously closed at eleven. Without tickets, at half-a-crown each,
there could be no admission. Discreet matrons held indisputable
sovereignty over the scene, before whom no vice could dare to shew
its face.
The Assembly, of course, met with opposition from the square-
toed part of society. ‘Some of the ministers published their warnings
and admonitions against promiscuous dancing, and in one of their
printed papers, which was cried about the streets, it was said that the
devils were particularly busy upon such occasions.’[584] A paper pellet
was launched, under the title of A Letter from a Gentleman in the
Country to his Friend in the City, with an Answer thereto,
concerning the New Assembly; from which we learn that there were
serious apprehensions, not only that these weekly meetings would
introduce effeminate habits amongst the nobility and gentry,
preventing them from serving their country in ‘the useful arts and
sciences,’ but that they would encourage vice and prodigality, and
thus prove ‘scandalous to religion, and of dangerous consequence to
human society.’ The gentleman of the city was particularly distressed
in remarking, that ‘the ordinary time spent in public worship each
Lord’s Day comes short of the seven hours spent in the Assembly.’
He remarked, moreover, that Edinburgh was a place to which young
men were sent for their education, and also to learn ‘merchandising’
and mechanical employments. These young persons would now be
liable to be diverted from their proper pursuits in order to study how
best to dress themselves for the Assembly, and how in that scene of
levity they might best make favour with the fair. After attending
there, they would most likely go to taverns. In short, they would be
thoroughly depraved, and the objects of 1723.
their parents in sending them to town
entirely frustrated.
The institution was viewed with especial horror by the more stern
professors of Presbyterianism, as folly appears from a book of Patrick
Walker, written soon after, in which he reviews the vanities of the
age generally. ‘Some years ago,’ he says, ‘we had a profane, obscene
meeting, called the Horn Order;[585] and now we have got a new
assembly and public meeting called Love for Love ... all nurseries of
profanity and vanity, and excitements to base lusts; so that it is a
shame to speak of these things that are said and done amongst them.
Some years ago, our women deformed their heads with cock-ups’
[‘some of them half a yard high, set with wires’]; ‘and now they
deform their bodies with farthingales nine yards about; some of
them in three stories, very unbecoming women professing
godliness.... If we would allow ourselves to think or consider, we
need not be so vain or look so high, being born heirs of wrath, and
our bodies to go to a consuming stinking grave ... and considering
the end of our clothing and how we came by them, to cover our
nakedness and for warmness to our bodies, and that the sheep’s old
clothes are our new.’
Patrick fairly wondered how any one that ever knew what it was to
bow a knee in prayer, ‘durst crook a hough to fyke and fling at a
piper’s and fiddler’s springs. I bless the Lord,’ says he, ‘that so
ordered my lot in my dancing-days, that made the fear of the bloody
rope and bullets to my neck and head, the pain of boots, thumbikens,
and irons, cold and hunger, wetness and weariness, to stop the
lightness of my head and the wantonness of my feet.’ He felt bound
to denounce dancing as a ‘common evil,’ especially among young
professors, and he was peculiarly indignant at there being a dancing
tune called the Cameronian March, which he conceived to be a
mockery of the worthy name of Richard Cameron. In Patrick’s view,
however, dancing was but a symptom of a 1723.
general departure from the grave, correct
habits of former times. ‘In our speech,’ says he, ‘our Scripture and
old Scots names are gone out of request; instead of Father and
Mother, Mamma and Papa, training children to speak nonsense, and
what they do not understand.’ He likewise complains of ‘a scandalous
omission of the worship of God in families ... abounding amongst us
in Edinburgh, the most part singing only a verse of a psalm and
reading a chapter; on the Sabbath evening some pray and many not,
and no more till the next Sabbath evening.’ The open profanation of
the Lord’s Day he saw to be more and more abounding in Scotland.
‘The throng streets, particularly fields, milk-houses, ale-houses in
and about sinful Edinburgh, is a sad evidence of this; many going to
the fields before sermons, and after sermons multitudes go to their
walks.’ He states that ‘three in one parish in 1716, and nine together
in a neighbour parish in 1717, all of them professors, went to the
cornfields in these Sabbath mornings, and did shear so many sheaves
of corn.’
The poet Allan Ramsay, who maintained a Horatian code of gaiety
and enjoyment in the midst of puritanic soberness, strongly took part
with the Assembly, and addressed its fair adherents in a poem which,
with its prose dedication, has supplied us with some of the above
facts. Allan may have had his heart in his theme, but little is to be
said for the eloquence of his verses; nor were some of his views as to
the pleasures of the Assembly at all calculated to do away with the
prejudices of its opponents. We are told, however, that both in the
case of the Assembly and that of the Playhouse, hereafter to be
noticed, ‘the ministers lost ground, to their great mortification, for
the most part of the ladies turned rebels to their remonstrances.’[586]
Two young men destined to be remembered by their country were
in the habit of attending the Assembly: one of them a hard-headed,
yet speculative genius, rising at the bar; the other a philandering,
sentimental being, absorbed in poetry and Jacobitism; their names
Henry Home of Kames and William Hamilton of Bangour; at this
time, living in bonds of strongest friendship. Hamilton one day
addressed Home ‘in the Assembly,’ thus:
‘While, crowned with radiant charms divine,
Unnumbered beauties round thee shine;
When Erskine leads her happy man,
And Johnston shakes the fluttering fan;
When beauteous Pringle shines confest,
And gently heaves her swelling breast,
Her raptured partner still at gaze,
Pursuing through each winding maze;
Say, youth, and canst thou keep secure
Thy heart from conquering beauty’s power?
· · · · ·
For me, my happier lot decrees

The joys of love that constant please....
My Hume, my beauteous Hume, constrains
My heart in voluntary chains....
Has she not all the charms that lie
In Gordon’s blush and Lockhart’s eye;
The down of lovely Haya’s hair,
Killochia’s shape or Cockburn’s air?’...
This affords us some idea of the beauties 1723.

who gave its first attractions to the
Assembly.
As a symptom of a good tendency, it is Nov. 9.

pleasant to notice at this date the
establishment of a Society for Improving in the Knowledge of
Agriculture, which proposed to hold quarterly general meetings in
Edinburgh. The Marquis of Lothian, the Earl of Kinnoull, Lord
Elibank, John Campbell, Esq., Lord Provost of Edinburgh, Sir
George Dunbar of Mochrum, Sir Alexander Hope of Kerse, Mr
Lumsden of Innergellie, Mr John Murray, one of the Clerks of
Session, and Ronald Campbell of Balerno, W.S., are enumerated as
amongst the constituent members.[587] The Society in a short time
comprehended three hundred of the principal landholders of
Scotland. The centre and animating spirit of the fraternity is
understood to have been a young Galloway gentleman, Robert
Maxwell of Arkland, who about this time took a lease of the farm of
Clifton-hall, near Edinburgh, and was there disposed to make
experiments in improved husbandry.
The Improvers, as they were called, from the very first shewed a
spirit of activity. In September 1724, we hear of them as being about
to publish a book upon the fallowing of ground, the method of
ordering ground for grass-seeds, the winning and cleaning of flax,
and rules for bleaching linen cloth. At the same time, they
patriotically entered into a resolution to discourage the use of
smuggled foreign spirits by their personal example, and to use means
for promoting the manufacture of spirits from native products.[588]
A few of their doings appear to us in a 1723.
somewhat ludicrous light. For example—in
July 1732, they figure in a tradesman’s advertisement of Punch
Brandy, as certifying it to be ‘a very nice and exact composition,’
after ‘trials of it both in drams and punch.’
Two years later, it goes equally out of its way, but with better
excuse, in recommending the woollen cloths made by Andrew
Gardner, merchant in Edinburgh, and Andrew Ross, clothier in
Musselburgh, as ‘sufficient cloths’ from five to fifteen shillings a
yard; the encouraging of which will tend to advance a branch of
native industry, and prevent the pernicious exportation of wool.
Nevertheless, there is all fair reason to believe that the Improvers
were really worthy of their name. A volume of their Transactions,
which Maxwell edited in 1743, enables us to judge of the general
scope of their efforts. Meeting once a fortnight at a house near Hope
Park, they received queries from individuals throughout the country
on agricultural subjects, took these into consideration, and prepared
answers. Fallowing, manuring, enclosing, how to treat different
kinds of soils, the merits of the Lucerne and St Foin grasses, were the
chief subjects discussed; and it must be acknowledged that their
transactions bear a general air of judgment and good sense, in
addition to a most earnest desire to make two blades grow where one
grew before, and so increase the general wealth of the country.
The president for a number of years was Thomas Hope of
Rankeillor, a man who deserves to be better remembered than he is.
He took, in 1722, a long lease of a marshy meadow to the south of
Edinburgh, drained it, and made it into a fine park with shady walks
for the recreation of the citizens. He had travelled in England,
France, and Holland, to pick up hints for the improvement of
agriculture, and he was indefatigable in his efforts to get these
introduced at home. It was somewhere in prospect of his park that
the Society held its meetings. His relative, the contemporaneous Earl
of Hopetoun, the Earl of Stair, the Earl of Ilay, Lord Cathcart, Lord
Drummore, Sir John Dalrymple of Cousland, and Mr Cockburn of
Ormiston, were other special zealots in the business of the Society,
and whose names figure honourably in its transactions. It is
particularly remembered, to the honour of the Earl of Stair, that he
was the first to raise turnips in the open fields, and so laid the
foundation of the most important branch of the store-husbandry of
modern times.
When cattle were stolen in the Highlands, 1723. Dec.
one of the means commonly taken for their
recovery was to send an emissary into the supposed country of the
thief, and offer a reward for his discovery. This was known among
the Highlanders as tascal-money, and held in general abhorrence;
yet it was sometimes effectual for its purpose.
The Camerons, living at issue with the government, had many
disorderly men among them, and tascal-money became accordingly
with them a peculiar abomination. To so great a height did this run,
that a large portion of the clan voluntarily took oath to each other,
over a drawn dirk, according to their custom, that they would never
receive any such reward; otherwise might the weapon be employed
in depriving them of their lives.
A creagh had taken place, and one of the Camerons was strongly
suspected of having given information and taken the unclean thing.
A few of his companions consequently called at his house one
evening, and, pretending to have some business with him, took him
out from his wife and family to a place at such distance as to be out of
hearing, where they coolly deprived him of his life. The story is only
related in the pages of Burt;[589] but there is too good reason to
believe in its verity. The reporter adds, that for the same offence,
another was made away with, and never more heard of.
A more gay and easy style of ideas was 1724. Jan.

everywhere creeping in, to replace the stern
and sombre manners of former less happy times. The ever-watchful
Mr Wodrow observed the process going on even in the comparatively
serious city of Glasgow. He remarks at this time how the young men
of that city are less religiously educated than formerly, and how,
going abroad in mercantile capacities, they come back with the loose
habits of other countries. At the university, the students were
beginning to evince a tendency to freedom of thought, and the
statement of Trinitarian doctrines by the professors sometimes
excited amongst them appearances of dissent and of derision. In the
city where there had been a few years back seventy-two regular
meetings for prayer, there were now four, while clubs for debating on
miscellaneous, and often irreverent questions, were coming into
vogue. The discipline of the church was beginning to be less
regarded; delinquents receive countenance from society; women of
improper character were occasionally seen 1724.
on the open street! It seemed to Mr
Wodrow that some desolating stroke was impending over the
western city. Indeed, they had already lost twenty thousand pounds
through the Custom-house difficulties regarding tobacco. ‘I wish it
may be sanctified to them.’
The worthy minister of Eastwood received soon after a small piece
of comforting information from Orkney. A minister in that
archipelago, being one Saturday detained from crossing a ferry to
preach next day, was induced to break the Sabbath in order to fulfil
his engagement, for which, as ‘scandalous,’ the presbytery processed
him. It ‘shews they are stricter there in discipline than we are.’ On
the other hand, the College lads at Glasgow, excited by the process of
the presbytery and synod against the liberal Professor Simson, went
the length of writing a play taking off the city clergy. ‘Matters are
come to a sad pass when people begin openly to mock and ridicule
gospel ministers; that strikes at the root of all religion!’
Mr Wodrow’s report about the state of religion in the army is
contradictory. On one page, we hear a lamentation for some serious
Christian officers who had left no successors; on another, there is
rejoicing over several still living, of the highest religious practice, as
Colonel Blackader, Colonel Erskine, Lieut.-colonel Cunninghame,
and Major Gardiner of ‘Stair’s Gray Horse.’ These were all of them
men of the strictest morals, and who gave much of their time to
religious exercises, Gardiner spending four hours every morning in
‘secret religion.’ Regarding the conversion of this last gentleman,
whose fate it was to die on the field of Prestonpans, and to have his
life written by Doddridge, Wodrow rather unexpectedly fails to give
any trace of the strange tale told by his biographer regarding his
conversion, remarking, on the contrary, that the change wrought on
him a few years ago was ‘gradual and insensible.’
The treatment of a bad class of insolvents Jan. 29.

at this period seems to have been
considerably different from anything of the kind now in fashion. On
this day, according to an Edinburgh newspaper, ‘one George Cowan,
a Glasgow merchant, stood in the pillory here, with this inscription
on his breast: George Cowan, a notorious fraudulent bankrupt.’
A Society for cultivating historical Feb.

literature was established in Edinburgh,
though not destined to make any great or permanent mark on the
age. It took its rise among men of Whig 1724.
professions, and, perhaps, its having party
objects in view was mainly what forbade it to acquire stability or
perfect any considerable work. At its head is found a man of no small
merit as an editor of historical muniments, James Anderson. It
included the names of the Rev. George Logan, afterwards noted for
his controversies with Ruddiman; Charles M‘Ky, professor of history
in the Edinburgh University; and two or three other persons of less
note.[590] Mr Wodrow, whose laborious History of the Sufferings of
the Church of Scotland had now been a couple of years before the
world, was invited to join. The first business before this Society was
to consider what could be done towards a new edition of the works of
George Buchanan. These had been published in goodly form by
Robert Freebairn in 1715—a credit to the Scottish press in externals,
and in the learning of the editor, Thomas Ruddiman; but the Whigs
had to regret that the annotations were in a strain sadly out of
harmony with that of a democratic author; and hence their desire to
see another edition. The Society was now holding meetings once a
fortnight for the preparation of such a work, and were even disposed
to ask that an edition contemplated in Holland should be delayed till
theirs came out, in order that their views should obtain additional
circulation;[591] yet it never came to perfection, and the curtain of
oblivion soon after falls upon the Historical Society.
Gordon of Glenbucket had been invested Mar.
by the Duke of Gordon in some lands in
Badenoch by virtue of a wadset.[592] The tenants, Macphersons, felt
aggrieved at having a new landlord put over them, and refused to pay
any rent. Glenbucket consequently raised a process at law for their
ejection, a measure which was then as much calculated to engender
murderous feelings in Scotland, as it has since been in Ireland.
Five or six of them, young fellows, the sons of gentlemen,
including Alexander Macpherson, son of Breakachie; Andrew
Macpherson, son of Benchar; and John Macpherson, nephew of
Killihuntly, came one evening to Glenbucket’s house, which they
entered as seeming friends. He was sickly and under the influence of
medicine, and was sitting on his low-framed bedstead, preparing to
go to rest. They told him they had come to express their regret for the
dispute which had happened—they were now resolved to
acknowledge him as their landlord, and pay 1724.
him rent—and they had only to entreat that
he would withdraw from the legal proceedings he had entered upon.
While addressing him in this manner, they gradually drew close to
him, in order to prevent him from defending himself against their
contemplated onslaught, for they knew his courage and vigour, and
that he was not far from his arms. They then suddenly fell upon him
with their dirks, and, having him for the moment at advantage, they
gave him many wounds, though none that were deadly. He contrived,
amidst the bustle, to lay hold of his broadsword, which lay on the
tester of his bed; and thus armed, he soon drove his assassins from
the house. Burt, who relates this incident,[593] remarks, with just
surprise, that it took place within sight of the barrack at Ruthven.[594]
The young men above named, being believed to be the
perpetrators of this crime, were soon after outlawed for failing to
attend the summons of the Court of Justiciary. They were so far
under terror of the law, that they found it necessary to ‘take to the
bent;’ but they nevertheless continued with arms in their hands, and,
in company with others who had joined them, lived tolerably well by
spulyie committed on the Duke of Gordon’s tenants in Badenoch.
In November 1725, General Wade is found sending a circular to
the officers commanding the six Highland companies, ordering
them, in compliance with a request from the duke, to use diligence in

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Principles of Macroeconomics 6th

Edition Frank Test Bank

1. In the twentieth century, average real wages have risen substantially:

6. In the United States between 1970 and 2000, employment:

8. One trend in labor markets is:

9. One trend in labor markets is:

12. In the market for labor, the price of labor is the:

13. The demand for labor depends on ______ and _______.

14. The marginal product of labor is the additional:

Number of Workers TVs Produced Marginal Product Value of Marginal Product

Number of Workers TVs Produced Marginal Product Value of Marginal Product

Number of Workers TVs Produced Marginal Product Value of Marginal Product

Number of Workers TVs Produced Marginal Product Value of Marginal Product

Number of Workers Chairs Produced Per Hour

Number of Workers Chairs Produced Per Hour

Number of Workers Chairs Produced Per Hour

24. Firms will hire additional workers as long as the wage:

25. An increase in the price of the output produced by labor will:

Pizzas Baked Per Day

Pizzas Baked Per Day

33. An increase in the size of the working-age population:

67. A Luddite is:

70. Globalization and skill-biased technological change have contributed to:

74. Who from among the following would be counted as unemployed?

Population 16 and older 1,000,000

Participation Rate 80%

Employed Workers 720,000

Based on the information in the table, what is the unemployment rate?

Population 16 and older 1,000,000

Participation Rate 80%

Employed Workers 720,000

Population 16 and older 1,000,000

Participation Rate 80%

Employed Workers 720,000

80. Who from among the following would be classified as employed?

83. The unemployment rate equals the number of people:

84. The participation rate is the number of people:

97. An "unemployment spell" is a period during which:

100. The duration of an unemployment spell is a measure of the:

106. Who of the following would be considered a discouraged worker?

107. Who from among the following is counted as employed?

108. Involuntary part-time workers are:

110. Frictional unemployment is:

112. Cyclical unemployment is:

114. Which of the following is an example of cyclical unemployment?

115. Which of the following is an example of structural unemployment?

116. Which of the following is an example of frictional unemployment?

119. Frictional unemployment may be economically beneficial if:

122. Periods of unusually low production in an economy result in ______ unemployment.

124. Minimum wage laws contribute to structural unemployment by:

128. Labor unions contribute to structural unemployment by:

135. An increase in unemployment insurance benefits will:

136. Unemployment insurance contributes to structural unemployment by:

138. Structural unemployment will decrease when:

140. Health and safety regulations in the labor market:

AACSB: Reflective Thinking

AACSB: Reflective Thinking

13. The demand for labor depends on and _.