Question 1

If the United Mine Workers successfully negotiates a wage that is higher than the competitive wage,

Accepted Answer

A) an excess demand for labor is created 
B) a surplus of labor is created 
C) the demand for labor increases 
D) the supply of labor decreases 
E) the quantity of labor demanded increases 
A) an excess demand for labor is created 
B) a surplus of labor is created 
C) the demand for labor increases 
D) the supply of labor decreases 
E) the quantity of labor demanded increases

Question 2

If the substitution effect is always greater than the income effect, then an individual's labor supply curve will

Accepted Answer

A) bend backward 
B) always have a positive slope 
C) always have a negative slope 
D) be vertical 
E) be horizontal 
A) bend backward 
B) always have a positive slope 
C) always have a negative slope 
D) be vertical 
E) be horizontal

Question 3

Along a backward-bending labor supply curve, the

Accepted Answer

A) income effect always dominates the substitution effect 
B) substitution effect always dominates the income effect 
C) substitution effect is always equal to the income effect 
D) substitution effect dominates the income effect at high wage rates 
E) substitution effect dominates the income effect at low wage rates 
A) income effect always dominates the substitution effect 
B) substitution effect always dominates the income effect 
C) substitution effect is always equal to the income effect 
D) substitution effect dominates the income effect at high wage rates 
E) substitution effect dominates the income effect at low wage rates

Question 4

Which of the following is not an example of a differing taste for work?

Accepted Answer

A) Some people prefer physical labor and hate office work 
B) Some people become airline pilots while others are afraid to fly 
C) Winter temperatures are below zero on crab boats off Alaska 
D) Teenagers prefer jobs at Starbucks and Gap to those at fast-food restaurants 
E) Many people prefer the creative process even though earnings are low 
A) Some people prefer physical labor and hate office work 
B) Some people become airline pilots while others are afraid to fly 
C) Winter temperatures are below zero on crab boats off Alaska 
D) Teenagers prefer jobs at Starbucks and Gap to those at fast-food restaurants 
E) Many people prefer the creative process even though earnings are low

Question 5

If featherbedding raises the price of output produced by the union workers, it

Accepted Answer

A) increases employment at the firm and in the industry 
B) decreases employment at the firm and in the industry 
C) increases employment at the firm but may decrease it in the industry 
D) decreases employment at the firm and increases it in the industry 
E) increases employment at the firm but reduces the number of firms so that there is no net effect on industry employment 
A) increases employment at the firm and in the industry 
B) decreases employment at the firm and in the industry 
C) increases employment at the firm but may decrease it in the industry 
D) decreases employment at the firm and increases it in the industry 
E) increases employment at the firm but reduces the number of firms so that there is no net effect on industry employment

Question 6

Market work includes activities such as

Accepted Answer

A) practicing your golf game 
B) studying for an economics exam 
C) teaching a college economics course 
D) picking up empty cans for the bottle deposit 
E) picking strawberries for your own use 
A) practicing your golf game 
B) studying for an economics exam 
C) teaching a college economics course 
D) picking up empty cans for the bottle deposit 
E) picking strawberries for your own use

Question 7

At a low wage rate,

Accepted Answer

A) there is no substitution effect 
B) there is no income effect 
C) the substitution effect usually outweighs the income effect 
D) the income effect usually outweighs the substitution effect 
E) the disutility of market work is usually high 
A) there is no substitution effect 
B) there is no income effect 
C) the substitution effect usually outweighs the income effect 
D) the income effect usually outweighs the substitution effect 
E) the disutility of market work is usually high

Question 8

If a union negotiates a wage above the market equilibrium, each firm's

Accepted Answer

A) supply of labor is greater than its marginal resource cost 
B) supply of labor is less than its marginal resource cost 
C) supply of labor is equal to its marginal resource cost 
D) demand for labor is less than its marginal resource cost 
E) demand for labor is greater than its marginal resource cost 
A) supply of labor is greater than its marginal resource cost 
B) supply of labor is less than its marginal resource cost 
C) supply of labor is equal to its marginal resource cost 
D) demand for labor is less than its marginal resource cost 
E) demand for labor is greater than its marginal resource cost

Question 9

If my wage rate increases, utility maximization requires that my quantity of labor supplied

Accepted Answer

A) increase 
B) decrease 
C) increase if the income effect dominates the substitution effect 
D) increase if the substitution effect dominates the income effect 
E) increase if the substitution effect equals the income effect 
A) increase 
B) decrease 
C) increase if the income effect dominates the substitution effect 
D) increase if the substitution effect dominates the income effect 
E) increase if the substitution effect equals the income effect

Question 10

Which of the following may be used by a plumber's union or a medical professional association to restrict membership?

Accepted Answer

A) all of the following are correct 
B) long apprenticeship periods 
C) difficult qualification exams 
D) stringent education standards 
E) high initiation fees 
A) all of the following are correct 
B) long apprenticeship periods 
C) difficult qualification exams 
D) stringent education standards 
E) high initiation fees

Question 11

The income effect of a decrease in the wage rate causes the quantity of labor supplied to

Accepted Answer

A) increase 
B) increase only if the individual desires more leisure time 
C) increase only if the substitution effect outweighs the income effect 
D) decrease 
E) decrease only if the substitution effect is weaker than the income effect 
A) increase 
B) increase only if the individual desires more leisure time 
C) increase only if the substitution effect outweighs the income effect 
D) decrease 
E) decrease only if the substitution effect is weaker than the income effect

Question 12

A large inheritance from a relative will tend to

Accepted Answer

A) cause movement up and to the right along your labor supply curve 
B) cause movement down and to the left along your labor supply curve 
C) shift your labor supply curve outward 
D) shift your labor supply curve inward 
E) make the income effect of a wage increase positive 
A) cause movement up and to the right along your labor supply curve 
B) cause movement down and to the left along your labor supply curve 
C) shift your labor supply curve outward 
D) shift your labor supply curve inward 
E) make the income effect of a wage increase positive

Question 13

If an industrial union is able to negotiate a wage above the market-clearing wage, employment in the industry will

Accepted Answer

A) increase 
B) decrease 
C) increase, if the union can restrict the supply of labor 
D) increase, if the union can increase the supply of labor 
E) decrease due to the strike-breaking activity of the firm 
A) increase 
B) decrease 
C) increase, if the union can restrict the supply of labor 
D) increase, if the union can increase the supply of labor 
E) decrease due to the strike-breaking activity of the firm

Question 14

Which of the following suggests that people have no control over the number of hours they work?

Accepted Answer

A) Most workdays last from 8 a.m.to 5 p.m. 
B) People make use of the opportunity for overtime. 
C) People make use of the opportunity to moonlight. 
D) People make use of early retirement options. 
E) Many workers hold more than one job. 
A) Most workdays last from 8 a.m.to 5 p.m. 
B) People make use of the opportunity for overtime. 
C) People make use of the opportunity to moonlight. 
D) People make use of early retirement options. 
E) Many workers hold more than one job.

Question 15

Exhibit 12-10   In Exhibit 12-10, which of the following is true between points c and d?

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) There is no substitution effect. 
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) There is no substitution effect.

Question 16

Union wages in the United States are, on average,

Accepted Answer

A) equal to nonunion wages 
B) twice as high as nonunion wages 
C) half of nonunion wages 
D) 15 percent higher than nonunion wages 
E) 50 percent higher than nonunion wages 
A) equal to nonunion wages 
B) twice as high as nonunion wages 
C) half of nonunion wages 
D) 15 percent higher than nonunion wages 
E) 50 percent higher than nonunion wages

Question 17

Unions whose membership is confined to workers with a particular skill are known as

Accepted Answer

A) industrial unions 
B) limited unions 
C) regional unions 
D) craft unions 
E) inclusive unions 
A) industrial unions 
B) limited unions 
C) regional unions 
D) craft unions 
E) inclusive unions

Question 18

Who is likely to earn a higher income, dentists or dental hygienists, and why?

Accepted Answer

A) dental hygienists because their education is less costly 
B) dentists because their education is less costly 
C) dental hygienists because their education is more costly 
D) dentists because their education is more costly 
E) neither; they usually earn the same wage rate 
A) dental hygienists because their education is less costly 
B) dentists because their education is less costly 
C) dental hygienists because their education is more costly 
D) dentists because their education is more costly 
E) neither; they usually earn the same wage rate

Question 19

A college dean has a __________ opportunity cost of __________ than a college student working in a minimum-wage job.

Accepted Answer

A) lower; leisure 
B) lower; nonmarket work 
C) lower; market work 
D) higher; nonmarket work 
E) higher; market work 
A) lower; leisure 
B) lower; nonmarket work 
C) lower; market work 
D) higher; nonmarket work 
E) higher; market work

Question 20

The average work week in the United States has declined to fewer than 40 hours even though wage rates have been increasing.The best explanation of this phenomenon is that

Accepted Answer

A) the labor supply curve shifted to the right 
B) the labor demand curve shifted to the right 
C) the income effect of rising wages outweighed the substitution effect 
D) the income effect of rising wages could not outweigh the substitution effect 
E) none of the above 
A) the labor supply curve shifted to the right 
B) the labor demand curve shifted to the right 
C) the income effect of rising wages outweighed the substitution effect 
D) the income effect of rising wages could not outweigh the substitution effect 
E) none of the above

Exam 12: Labor Markets and Labor Unions

If the United Mine Workers successfully negotiates a wage that is higher than the competitive wage,

If the substitution effect is always greater than the income effect, then an individual's labor supply curve will

Along a backward-bending labor supply curve, the

Which of the following is not an example of a differing taste for work?

If featherbedding raises the price of output produced by the union workers, it

Market work includes activities such as

At a low wage rate,

If a union negotiates a wage above the market equilibrium, each firm's

If my wage rate increases, utility maximization requires that my quantity of labor supplied

Which of the following may be used by a plumber's union or a medical professional association to restrict membership?

The income effect of a decrease in the wage rate causes the quantity of labor supplied to

A large inheritance from a relative will tend to

If an industrial union is able to negotiate a wage above the market-clearing wage, employment in the industry will

Which of the following suggests that people have no control over the number of hours they work?

Exhibit 12-10 In Exhibit 12-10, which of the following is true between points c and d?

Union wages in the United States are, on average,

Unions whose membership is confined to workers with a particular skill are known as

Who is likely to earn a higher income, dentists or dental hygienists, and why?

A college dean has a __________ opportunity cost of __________ than a college student working in a minimum-wage job.

The average work week in the United States has declined to fewer than 40 hours even though wage rates have been increasing.The best explanation of this phenomenon is 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

Filters

A college dean has a opportunity cost of than a college student working in a minimum-wage job.