Question 1

If Marie buys a sailboat, which increases the productivity of her leisure time, she

Accepted Answer

A) increases her productivity of nonmarket work 
B) increases her productivity of market work 
C) will spend less time in nonmarket work 
D) will spend less time in leisure activities 
E) will spend more time in market work to pay for the boat's maintenance 
A) increases her productivity of nonmarket work 
B) increases her productivity of market work 
C) will spend less time in nonmarket work 
D) will spend less time in leisure activities 
E) will spend more time in market work to pay for the boat's maintenance

Question 2

If a union negotiates a wage greater than the competitive wage, the total union wage bill will necessarily decrease.

Accepted Answer

A) True 
 B)False

Question 3

Bob and Mary each have a Ph.D.in economics.Bob has a job in private industry at which he earns $90, 000 a year.Mary earns half that much as a college professor.Which of the following could not explain Mary's career choice?

Accepted Answer

A) She experiences diminishing marginal utility. 
B) She enjoys the flexibility of her schedule. 
C) She enjoys teaching. 
D) She enjoys the informal atmosphere of a college. 
E) She likes having her summers free to do research. 
A) She experiences diminishing marginal utility. 
B) She enjoys the flexibility of her schedule. 
C) She enjoys teaching. 
D) She enjoys the informal atmosphere of a college. 
E) She likes having her summers free to do research.

Question 4

Since about 1980,

Accepted Answer

A) production worker pay in the U.S.has grown faster than CEO pay 
B) the typical U.S.CEO has come to earn more than the typical NBA basketball player 
C) CEO pay in Europe has grown much faster than CEO pay in the U.S. 
D) CEO pay in the U.S.has grown to a very large multiple of production worker pay 
E) the ratio of CEO pay to production worker pay in the U.S.has not changed much, although both groups receive much high pay now 
A) production worker pay in the U.S.has grown faster than CEO pay 
B) the typical U.S.CEO has come to earn more than the typical NBA basketball player 
C) CEO pay in Europe has grown much faster than CEO pay in the U.S. 
D) CEO pay in the U.S.has grown to a very large multiple of production worker pay 
E) the ratio of CEO pay to production worker pay in the U.S.has not changed much, although both groups receive much high pay now

Question 5

Jason can maximize his satisfaction by allocating time among market work, nonmarket work, and leisure so that the final marginal utilities per hour spent in each activity are identical.

Accepted Answer

A) True 
 B)False

Question 6

Strikes are expensive for

Accepted Answer

A) workers only because their income falls 
B) employers only because their revenue falls 
C) the public only because output falls 
D) both the public and employers because workers are compensated by the union for lost income 
E) workers, employers, and the public 
A) workers only because their income falls 
B) employers only because their revenue falls 
C) the public only because output falls 
D) both the public and employers because workers are compensated by the union for lost income 
E) workers, employers, and the public

Question 7

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

Accepted Answer

A) requires advanced education and training 
B) requires most working hours be on weekends 
C) requires hard physical labor 
D) allows the employee greater discretion in the use of time 
E) has a higher probability of injury or death 
A) requires advanced education and training 
B) requires most working hours be on weekends 
C) requires hard physical labor 
D) allows the employee greater discretion in the use of time 
E) has a higher probability of injury or death

Question 8

Exhibit 12-3   In Exhibit 12-3, which of the following is true at a wage rate of $7?

Accepted Answer

A) The income effect dominates the substitution effect. 
B) The substitution effect dominates the income effect. 
C) The income effect exactly offsets the substitution effect. 
D) No labor is supplied. 
E) The individual will supply 30 hours of labor. 
A) The income effect dominates the substitution effect. 
B) The substitution effect dominates the income effect. 
C) The income effect exactly offsets the substitution effect. 
D) No labor is supplied. 
E) The individual will supply 30 hours of labor.

Question 9

Why has there been a big jump in pay to U.S.CEOs?

Accepted Answer

A) The U.S.economy has grown sharply in recent decades, so U.S.businesses serve a wider market 
B) U.S.companies can usually sell a valued product around the world 
C) There is wider competition for the top people 
D) High salaries are more socially acceptable 
E) All of the answers are correct 
A) The U.S.economy has grown sharply in recent decades, so U.S.businesses serve a wider market 
B) U.S.companies can usually sell a valued product around the world 
C) There is wider competition for the top people 
D) High salaries are more socially acceptable 
E) All of the answers are correct

Question 10

Featherbedding shifts the marginal revenue product of labor curve to the right.

Accepted Answer

A) True 
 B)False

Question 11

For a typical person who is currently earning a low wage rate, the

Accepted Answer

A) substitution effect of a wage rate increase usually is stronger than the income effect 
B) substitution effect of a wage rate increase usually is weaker than the income effect 
C) income effect of a wage rate increase is usually zero 
D) substitution effect of a wage rate increase is usually zero 
E) substitution and income effects of a wage rate increase tend to work in the same direction 
A) substitution effect of a wage rate increase usually is stronger than the income effect 
B) substitution effect of a wage rate increase usually is weaker than the income effect 
C) income effect of a wage rate increase is usually zero 
D) substitution effect of a wage rate increase is usually zero 
E) substitution and income effects of a wage rate increase tend to work in the same direction

Question 12

In the collective bargaining process, once the United Auto Workers and General Motors representatives agree on a contract, the union members

Accepted Answer

A) must accept the contract 
B) may reject the contract and must then have their representatives continue negotiations 
C) may reject the contract and must then go on strike 
D) may reject the contract and must then vote on whether to strike or to continue negotiations 
E) may reject the contract and must then seek employment with a different firm 
A) must accept the contract 
B) may reject the contract and must then have their representatives continue negotiations 
C) may reject the contract and must then go on strike 
D) may reject the contract and must then vote on whether to strike or to continue negotiations 
E) may reject the contract and must then seek employment with a different firm

Question 13

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

Accepted Answer

A) offers less prestige 
B) offers fewer nonmonetary rewards 
C) provides little on-the-job training 
D) requires advanced education or skills 
E) provides a climate-controlled work environment 
A) offers less prestige 
B) offers fewer nonmonetary rewards 
C) provides little on-the-job training 
D) requires advanced education or skills 
E) provides a climate-controlled work environment

Question 14

An industrial union is a union composed of workers in the same skilled profession.

Accepted Answer

A) True 
 B)False

Question 15

Caroline Jahn has a professional degree and is 51 years old.Bob Rubate also has a professional degree and is 29 years old.On average, Caroline most likely earns

Accepted Answer

A) 75 percent less than Bob 
B) 7 percent less than Bob 
C) 75 percent more than Bob 
D) 7 percent more than Bob 
E) the same amount as Bob 
A) 75 percent less than Bob 
B) 7 percent less than Bob 
C) 75 percent more than Bob 
D) 7 percent more than Bob 
E) the same amount as Bob

Question 16

Which of the following could not contribute to differences in wage rates across markets?

Accepted Answer

A) differences in training and education requirements 
B) job discrimination 
C) differences in risk 
D) problems of labor mobility 
E) distribution of a new national help-wanted newspaper 
A) differences in training and education requirements 
B) job discrimination 
C) differences in risk 
D) problems of labor mobility 
E) distribution of a new national help-wanted newspaper

Question 17

In order to reduce labor supply, a union must be able to

Accepted Answer

A) do all of the following 
B) force all employers in the industry to hire only union members 
C) set wages 
D) agree to wage concessions 
E) increase union membership 
A) do all of the following 
B) force all employers in the industry to hire only union members 
C) set wages 
D) agree to wage concessions 
E) increase union membership

Question 18

People who gain greater enjoyment from leisure activities

Accepted Answer

A) allocate more time to leisure 
B) allocate more time to market work 
C) allocate more time to nonmarket work 
D) generally earn higher market wages 
E) generally earn lower market wages 
A) allocate more time to leisure 
B) allocate more time to market work 
C) allocate more time to nonmarket work 
D) generally earn higher market wages 
E) generally earn lower market wages

Exam 12: Labor Markets and Labor Unions

If Marie buys a sailboat, which increases the productivity of her leisure time, she

If a union negotiates a wage greater than the competitive wage, the total union wage bill will necessarily decrease.

Bob and Mary each have a Ph.D.in economics.Bob has a job in private industry at which he earns $90, 000 a year.Mary earns half that much as a college professor.Which of the following could not explain Mary's career choice?

Since about 1980,

Jason can maximize his satisfaction by allocating time among market work, nonmarket work, and leisure so that the final marginal utilities per hour spent in each activity are identical.

Strikes are expensive for

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

Exhibit 12-3 In Exhibit 12-3, which of the following is true at a wage rate of $7?

Why has there been a big jump in pay to U.S.CEOs?

Featherbedding shifts the marginal revenue product of labor curve to the right.

For a typical person who is currently earning a low wage rate, the

In the collective bargaining process, once the United Auto Workers and General Motors representatives agree on a contract, the union members

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

An industrial union is a union composed of workers in the same skilled profession.

Caroline Jahn has a professional degree and is 51 years old.Bob Rubate also has a professional degree and is 29 years old.On average, Caroline most likely earns

Which of the following could not contribute to differences in wage rates across markets?

In order to reduce labor supply, a union must be able to

People who gain greater enjoyment from leisure activities

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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