Question 1

If Dian chooses a job with a lower income over one with a higher income, she cannot be maximizing utility.

Accepted Answer

A) True 
 B)False

Question 2

If Jin-Ho buys a personal computer to maintain household financial records and prepare budgets, he

Accepted Answer

A) will spend less time in nonmarket work 
B) will spend more time engaged in leisure activities 
C) will increase the productivity of market work 
D) is less likely to hire tax preparation services on the market 
E) is less likely to prepare his own income tax returns at home 
A) will spend less time in nonmarket work 
B) will spend more time engaged in leisure activities 
C) will increase the productivity of market work 
D) is less likely to hire tax preparation services on the market 
E) is less likely to prepare his own income tax returns at home

Question 3

The substitution effect in the labor supply decision refers to

Accepted Answer

A) substituting leisure for work as the wage rate rises 
B) substituting market work for nonmarket work as the wage rate falls 
C) working more hours as the wage rate falls 
D) working fewer hours as the wage rate rises 
E) substituting market work for leisure or nonmarket work as the wage rate rises 
A) substituting leisure for work as the wage rate rises 
B) substituting market work for nonmarket work as the wage rate falls 
C) working more hours as the wage rate falls 
D) working fewer hours as the wage rate rises 
E) substituting market work for leisure or nonmarket work as the wage rate rises

Question 4

Industrial unions in the United States formed a national organization known as

Accepted Answer

A) the National Union 
B) the Knights of Labor 
C) the American Federation of Labor (AFL) 
D) the Congress of Industrial Organizations (CIO) 
E) the AFL-CIO 
A) the National Union 
B) the Knights of Labor 
C) the American Federation of Labor (AFL) 
D) the Congress of Industrial Organizations (CIO) 
E) the AFL-CIO

Question 5

Craft unions typically attempt to increase wages by

Accepted Answer

A) setting a wage floor 
B) reducing labor supply 
C) increasing labor demand 
D) reducing initiation fees 
E) expanding new union memberships 
A) setting a wage floor 
B) reducing labor supply 
C) increasing labor demand 
D) reducing initiation fees 
E) expanding new union memberships

Question 6

The quantity of labor an individual supplies to any market

Accepted Answer

A) always increases as the market wage rate rises 
B) is contingent upon the wage rates offered in other labor markets 
C) always decreases as the market wage rate rises 
D) could never be zero over the realistic range of wage rates 
E) depends only on the opportunity cost of the individual's time in other labor markets 
A) always increases as the market wage rate rises 
B) is contingent upon the wage rates offered in other labor markets 
C) always decreases as the market wage rate rises 
D) could never be zero over the realistic range of wage rates 
E) depends only on the opportunity cost of the individual's time in other labor markets

Question 7

Winner-take-all labor markets are commonly found in

Accepted Answer

A) sports and entertainment industries 
B) unionized industries 
C) the government sector 
D) the legal services industry 
E) service industries in general 
A) sports and entertainment industries 
B) unionized industries 
C) the government sector 
D) the legal services industry 
E) service industries in general

Question 8

If a teachers' union negotiates the wage for all college professors, the market supply curve of college professors

Accepted Answer

A) is perfectly elastic everywhere 
B) is perfectly inelastic everywhere 
C) is horizontal and then it slopes upward 
D) is vertical and it slopes upward 
E) slopes upward and then becomes horizontal 
A) is perfectly elastic everywhere 
B) is perfectly inelastic everywhere 
C) is horizontal and then it slopes upward 
D) is vertical and it slopes upward 
E) slopes upward and then becomes horizontal

Question 9

If a union is able to increase the demand for union-made goods,

Accepted Answer

A) wages will increase but employment will decrease 
B) wages will increase and employment will increase 
C) wages will decrease but employment will increase 
D) wages will decrease and employment will decrease 
E) the demand for non-union labor will increase 
A) wages will increase but employment will decrease 
B) wages will increase and employment will increase 
C) wages will decrease but employment will increase 
D) wages will decrease and employment will decrease 
E) the demand for non-union labor will increase

Question 10

Exhibit 12-2   In Exhibit 12-2, which of the following is true at a wage rate of $20?

Accepted Answer

A) The income effect dominates the substitution effect. 
B) The substitution effect dominates the income effect. 
C) No labor is supplied. 
D) The income effect equals the substitution effect. 
E) The supply curve is horizontal. 
A) The income effect dominates the substitution effect. 
B) The substitution effect dominates the income effect. 
C) No labor is supplied. 
D) The income effect equals the substitution effect. 
E) The supply curve is horizontal.

Question 11

As the wage rate falls, a utility-maximizing individual's quantity of labor supplied

Accepted Answer

A) increases 
B) decreases 
C) increases if the income effect outweighs the substitution effect 
D) decreases if the substitution effect outweighs the income effect 
E) decreases if the income effect outweighs the substitution effect 
A) increases 
B) decreases 
C) increases if the income effect outweighs the substitution effect 
D) decreases if the substitution effect outweighs the income effect 
E) decreases if the income effect outweighs the substitution effect

Question 12

If the government intervenes in a labor dispute and requires settlement through binding arbitration, what takes place?

Accepted Answer

A) A neutral third party makes a decision that both parties must accept. 
B) A neutral third party makes a decision that both parties may reject. 
C) One party sues the other in court. 
D) The two parties negotiate an agreement without assistance and both must accept it. 
E) The two parties negotiate an agreement with assistance from their attorneys and both must accept it. 
A) A neutral third party makes a decision that both parties must accept. 
B) A neutral third party makes a decision that both parties may reject. 
C) One party sues the other in court. 
D) The two parties negotiate an agreement without assistance and both must accept it. 
E) The two parties negotiate an agreement with assistance from their attorneys and both must accept it.

Question 13

The process by which union and management representatives negotiate a mutually agreeable contract specifying wages, benefits, and working conditions is called

Accepted Answer

A) collective bargaining 
B) mediation 
C) arbitration 
D) striking 
E) litigation 
A) collective bargaining 
B) mediation 
C) arbitration 
D) striking 
E) litigation

Question 14

Other things equal, the supply of labor will be lower to a job that

Accepted Answer

A) offers less strenuous physical activity 
B) requires a supervisor to closely monitor employee performance 
C) allows for flexible work schedules 
D) offers free room and board 
E) is exciting due to slightly elevated risk 
A) offers less strenuous physical activity 
B) requires a supervisor to closely monitor employee performance 
C) allows for flexible work schedules 
D) offers free room and board 
E) is exciting due to slightly elevated risk

Question 15

A worker's labor supply depends on, among other things, his ability, his preference for the task, and the opportunity cost of his time.

Accepted Answer

A) True 
 B)False

Question 16

Featherbedding by unions is an attempt to

Accepted Answer

A) increase the demand for union labor 
B) increase the demand for non-union labor 
C) decrease the demand for union labor 
D) increase the supply of union labor 
E) increase the supply of non-union labor 
A) increase the demand for union labor 
B) increase the demand for non-union labor 
C) decrease the demand for union labor 
D) increase the supply of union labor 
E) increase the supply of non-union labor

Question 17

Exhibit 12-4   In Exhibit 12-4, when the wage rate rises above $12, the substitution effect outweighs the income effect.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 12-6   If the market in Exhibit 12-6 is allowed to operate freely, total employment by the typical employer (illustrated in the right-hand panel)will be

Accepted Answer

A) 10 workers 
B) 12 workers 
C) 600 workers 
D) 720 workers 
E) 800 workers 
A) 10 workers 
B) 12 workers 
C) 600 workers 
D) 720 workers 
E) 800 workers

Question 19

Union membership rates in the U.S.are

Accepted Answer

A) highest among government employees 
B) highest among industrial sector employees 
C) highest among service sector employees 
D) increasing at a faster rate than the labor force 
E) highest among women 
A) highest among government employees 
B) highest among industrial sector employees 
C) highest among service sector employees 
D) increasing at a faster rate than the labor force 
E) highest among women

Question 20

Jamal maximizes utility by allocating his time among leisure, market work, and household work so that

Accepted Answer

A) expected marginal utility is equal among all three 
B) expected total utility per hour is equal among all three 
C) expected marginal utility per hour is equal among all three 
D) the maximum amount of goods and services can be acquired 
E) expected total utility of each use is equal 
A) expected marginal utility is equal among all three 
B) expected total utility per hour is equal among all three 
C) expected marginal utility per hour is equal among all three 
D) the maximum amount of goods and services can be acquired 
E) expected total utility of each use is equal

Exam 12: Labor Markets and Labor Unions

If Dian chooses a job with a lower income over one with a higher income, she cannot be maximizing utility.

If Jin-Ho buys a personal computer to maintain household financial records and prepare budgets, he

The substitution effect in the labor supply decision refers to

Industrial unions in the United States formed a national organization known as

Craft unions typically attempt to increase wages by

The quantity of labor an individual supplies to any market

Winner-take-all labor markets are commonly found in

If a teachers' union negotiates the wage for all college professors, the market supply curve of college professors

If a union is able to increase the demand for union-made goods,

Exhibit 12-2 In Exhibit 12-2, which of the following is true at a wage rate of $20?

As the wage rate falls, a utility-maximizing individual's quantity of labor supplied

If the government intervenes in a labor dispute and requires settlement through binding arbitration, what takes place?

The process by which union and management representatives negotiate a mutually agreeable contract specifying wages, benefits, and working conditions is called

Other things equal, the supply of labor will be lower to a job that

A worker's labor supply depends on, among other things, his ability, his preference for the task, and the opportunity cost of his time.

Featherbedding by unions is an attempt to

Exhibit 12-4 In Exhibit 12-4, when the wage rate rises above $12, the substitution effect outweighs the income effect.

Exhibit 12-6 If the market in Exhibit 12-6 is allowed to operate freely, total employment by the typical employer (illustrated in the right-hand panel)will be

Union membership rates in the U.S.are

Jamal maximizes utility by allocating his time among leisure, market work, and household work so that

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

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