GED Social Studies : Labor and Capital

Study concepts, example questions & explanations for GED Social Studies

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Example Questions

Example Question #4 : Economics

Someone who works during a strike, rendering the strike impotent, is called a __________.

Possible Answers:

trustee

scab

partner

messiah

quorum

Correct answer:

scab

Explanation:

"Scab" is used, in a demeaning fashion, to describe someone who renders the effects of a strike less effective by continuing to work during the strike or by taking the job of a striking member of a union.

Example Question #1 : Economic Principles

Frictional unemployment occurs when __________.

Possible Answers:

the United States is at war

the government lowers taxes

workers are dissatisfied with their jobs

the economy is in recession

unions are not able to go on strikes

Correct answer:

workers are dissatisfied with their jobs

Explanation:

Frictional unemployment is the name given to a situation whereby people quit because they are dissatisfied with their jobs.

Example Question #3 : Labor And Capital

What name is given to the working class in the writings of Karl Marx?

Possible Answers:

Gentry

Clergy

Bourgeoise

Proletariat

Plebeians

Correct answer:

Proletariat

Explanation:

In The Communist Manifesto, the working class is referred to by the latin term “proletariat.” Marx argued that the “proletariat” were essentially enslaved by the bourgeoise and the upper class who controlled the means of production and thus all the wealth and property.

Example Question #1 : Labor And Capital

The Iron Law of Wages states that __________.

Possible Answers:

workers must be paid enough so that they do not consider working for a different company

the more people who work within an economic system the greater power they have to work together for reform

when workers are paid higher wages they are likely to do their job much better and provide a better quality product

the wage of a laborer will always fall to the minimum needed to keep the laborer alive and working

the value of a job is determined by how rare the skill set required is and how much money it produces

Correct answer:

the wage of a laborer will always fall to the minimum needed to keep the laborer alive and working

Explanation:

The Iron Law of Wages is a famous economic term that originated during the eighteenth or nineteenth Century. It is actually difficult to track who first used the terminology or who first wrote about the idea; historians sometimes credit Malthus, Ricardo, Marx, Engels and so on. The law itself is well-understood: it states that the wage of a laborer will always fall to the very minimum needed to keep the worker working. Because of the massive competition in the labor market, employers have the power to pay their workers as little as possible, because if the worker refuses those terms, someone else will simply take the job. To rephrase: the money paid to a worker will always be the very minimum needed to keep the worker alive and working.

Example Question #7 : Economics

Sally starts a business that aims to produces parts for a local factory. She hires Stephanie to work for her business and physically make her product. She rents a building for her business from Ed. She buys computers and machinery from Ellen. She borrows money from Michael's bank in order to get started. She hopes to convince Allen to actually purchase her product.

In the preceding passage, which person can be said to be contributing labor as a factor of production in Sally's business? 

Possible Answers:

Michael

Stephanie

Ed

Ellen

Allen

Correct answer:

Stephanie

Explanation:

Labor is defined as the factor of production that is directly attributable to human effort and work. Labor is distinct from capital, in that capital describes inanimate goods that are essential to production, while labor describes the human element of production. Ed, Ellen, and Michael all contribute to the production of Sally's business, but they do so through the provision of capital. Stephanie contributes her own effort and work as a laborer for Sally. Meanwhile, Allen, as a customer, isn't directly involved in the production process.

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