Question 1

A craft union is a union of workers in

Accepted Answer

A) the same firm 
B) the same industry 
C) the same skilled profession 
D) different skilled professions 
E) different trades 
A) the same firm 
B) the same industry 
C) the same skilled profession 
D) different skilled professions 
E) different trades

Question 2

Union membership over the last five decades has

Accepted Answer

A) grown at the same rate as the labor force 
B) become much more attractive and has grown more rapidly than the labor force 
C) become much more attractive 
D) grown more rapidly than the labor force 
E) declined 
A) grown at the same rate as the labor force 
B) become much more attractive and has grown more rapidly than the labor force 
C) become much more attractive 
D) grown more rapidly than the labor force 
E) declined

Question 3

An increase in the wage rate will lead to a reduction in the quantity of labor supplied if

Accepted Answer

A) the substitution effect outweighs the income effect 
B) the income effect outweighs the substitution effect 
C) the opportunity costs of leisure do not increase 
D) the opportunity costs of working always increase 
E) workers are irrational because otherwise they would be violating the law of supply 
A) the substitution effect outweighs the income effect 
B) the income effect outweighs the substitution effect 
C) the opportunity costs of leisure do not increase 
D) the opportunity costs of working always increase 
E) workers are irrational because otherwise they would be violating the law of supply

Question 4

One significant reason for the declining membership in unions in the U.S.is

Accepted Answer

A) more workers are entering the teaching field 
B) increasing employment in the industrial sector 
C) the structural shift of the economy toward services 
D) increasing cultural diversity in the workforce 
E) a decrease in the number of public sector employees 
A) more workers are entering the teaching field 
B) increasing employment in the industrial sector 
C) the structural shift of the economy toward services 
D) increasing cultural diversity in the workforce 
E) a decrease in the number of public sector employees

Question 5

Which of the following statements would be represented by a backward-bending labor supply curve?

Accepted Answer

A) A $50, 000-a-year professor works more hours than a $20, 000-a-year professor. 
B) The CEO of a major computer manufacturer works more hours than the union workers. 
C) The owners of a successful business work fewer days than do their employees. 
D) Hospital janitors work fewer hours than does the chief of obstetrics. 
E) High-ranking executives are more likely to work past 5:00 p.m.than are middle managers. 
A) A $50, 000-a-year professor works more hours than a $20, 000-a-year professor. 
B) The CEO of a major computer manufacturer works more hours than the union workers. 
C) The owners of a successful business work fewer days than do their employees. 
D) Hospital janitors work fewer hours than does the chief of obstetrics. 
E) High-ranking executives are more likely to work past 5:00 p.m.than are middle managers.

Question 6

The market labor supply curve is usually __________ over the relevant range of market wage rates.

Accepted Answer

A) positively sloped 
B) negatively sloped 
C) backward bending 
D) vertical 
E) horizontal 
A) positively sloped 
B) negatively sloped 
C) backward bending 
D) vertical 
E) horizontal

Question 7

Leisure is

Accepted Answer

A) not subject to the law of diminishing utility because you can never have enough leisure time 
B) not subject to the law of diminishing utility because you can derive utility only from goods and services 
C) subject to the law of diminishing utility, just as the consumption of goods and services is 
D) subject to the law of diminishing utility only if it involves the consumption of goods and services 
E) not considered in maximizing utility 
A) not subject to the law of diminishing utility because you can never have enough leisure time 
B) not subject to the law of diminishing utility because you can derive utility only from goods and services 
C) subject to the law of diminishing utility, just as the consumption of goods and services is 
D) subject to the law of diminishing utility only if it involves the consumption of goods and services 
E) not considered in maximizing utility

Question 8

Exhibit 12-4   In Exhibit 12-4, when the wage rate increases from $9 to $12, the substitution effect outweighs the income effect.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not true about taste for work?

Accepted Answer

A) Everyone ends up in her or his most preferred job 
B) The transaction costs of job information and of changing jobs may prevent some desirable matchups 
C) Workers seek jobs in a way that tends to minimize the disutility of work 
D) Economists argue that your preferences are stable and you supply more labor to jobs you like 
E) Economists do not try to explain how work preferences develop 
A) Everyone ends up in her or his most preferred job 
B) The transaction costs of job information and of changing jobs may prevent some desirable matchups 
C) Workers seek jobs in a way that tends to minimize the disutility of work 
D) Economists argue that your preferences are stable and you supply more labor to jobs you like 
E) Economists do not try to explain how work preferences develop

Question 10

Which of the following would be considered leisure?

Accepted Answer

A) picking strawberries for your own use 
B) running a 10-mile training session 
C) studying for a college mathematics class 
D) changing the oil and oil filter on your car 
E) weeding your garden 
A) picking strawberries for your own use 
B) running a 10-mile training session 
C) studying for a college mathematics class 
D) changing the oil and oil filter on your car 
E) weeding your garden

Question 11

As the wage rate increases, the substitution effect causes workers to supply more time to market work and the income effect causes them to supply less time to market work.

Accepted Answer

A) True 
 B)False

Question 12

An industrial union can obtain a wage higher than the competitive level

Accepted Answer

A) without any change in total employment 
B) at the cost of a reduction in total employment 
C) and achieve higher total employment as well 
D) and achieve the same or higher total employment 
E) thus increasing the quantity of labor demanded 
A) without any change in total employment 
B) at the cost of a reduction in total employment 
C) and achieve higher total employment as well 
D) and achieve the same or higher total employment 
E) thus increasing the quantity of labor demanded

Question 13

Because leisure is a normal good, an increase in income

Accepted Answer

A) decreases the demand for leisure time and reduces the amount of time allocated to market work 
B) decreases the demand for leisure time and increases the amount of time allocated to market work and/or nonmarket work 
C) increases the demand for leisure time and reduces the amount of time allocated to market work and nonmarket work 
D) increases the demand for leisure time and increases the amount of time allocated to market work and nonmarket work 
E) has no impact on the demand for leisure time 
A) decreases the demand for leisure time and reduces the amount of time allocated to market work 
B) decreases the demand for leisure time and increases the amount of time allocated to market work and/or nonmarket work 
C) increases the demand for leisure time and reduces the amount of time allocated to market work and nonmarket work 
D) increases the demand for leisure time and increases the amount of time allocated to market work and nonmarket work 
E) has no impact on the demand for leisure time

Question 14

If the quantity of labor Sam supplies to a job is zero over the realistic range of wages, Sam

Accepted Answer

A) is either unwilling or unable to perform the job 
B) has not been hired to do the job 
C) has not been hired to do the job at the going market wage rate 
D) is unable to perform the job 
E) is unwilling to perform the job 
A) is either unwilling or unable to perform the job 
B) has not been hired to do the job 
C) has not been hired to do the job at the going market wage rate 
D) is unable to perform the job 
E) is unwilling to perform the job

Question 15

Which of the following union tactics, if successful, would increase wages and create a surplus of labor?

Accepted Answer

A) collective bargaining to fix the wage above the competitive level 
B) decreasing the marginal revenue product of the union workers 
C) increasing the demand for union-made products 
D) restricting the supply of nonunion products that compete with union-made products 
E) increasing labor productivity by minimizing conflicts and resolving differences between labor and management 
A) collective bargaining to fix the wage above the competitive level 
B) decreasing the marginal revenue product of the union workers 
C) increasing the demand for union-made products 
D) restricting the supply of nonunion products that compete with union-made products 
E) increasing labor productivity by minimizing conflicts and resolving differences between labor and management

Question 16

A stock market crash that reduces the value of an individual's trust fund would tend to

Accepted Answer

A) increase her supply of labor if the substitution effect outweighs the income effect 
B) decrease her supply of labor if the substitution effect outweighs the income effect 
C) have no impact on her labor supply decision 
D) increase her supply of labor 
E) decrease her supply of labor 
A) increase her supply of labor if the substitution effect outweighs the income effect 
B) decrease her supply of labor if the substitution effect outweighs the income effect 
C) have no impact on her labor supply decision 
D) increase her supply of labor 
E) decrease her supply of labor

Question 17

As the wage rate increases, the income effect tends to reduce the quantity of labor supplied to the market.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 12-6   In Exhibit 12-6, if a union raises the wage to $4, total employment in the market 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

Work is an attractive use of your time

Accepted Answer

A) if the utility of consumption made possible by work exceeds the disutility of work itself 
B) whenever you are paid a wage equal to or greater than the minimum wage 
C) whenever you derive utility from the consumption made possible through work 
D) unless time spent working is a source of disutility 
E) only when marginal utility is negative for an additional unit of leisure 
A) if the utility of consumption made possible by work exceeds the disutility of work itself 
B) whenever you are paid a wage equal to or greater than the minimum wage 
C) whenever you derive utility from the consumption made possible through work 
D) unless time spent working is a source of disutility 
E) only when marginal utility is negative for an additional unit of leisure

Question 20

Which of the following explains the recent decline in union membership in the United States?

Accepted Answer

A) smaller government safety nets 
B) slower technological change 
C) the change from a manufacturing to a service-based economy 
D) increasing market concentration 
E) none of the above 
A) smaller government safety nets 
B) slower technological change 
C) the change from a manufacturing to a service-based economy 
D) increasing market concentration 
E) none of the above

Exam 12: Labor Markets and Labor Unions

A craft union is a union of workers in

Union membership over the last five decades has

An increase in the wage rate will lead to a reduction in the quantity of labor supplied if

One significant reason for the declining membership in unions in the U.S.is

Which of the following statements would be represented by a backward-bending labor supply curve?

The market labor supply curve is usually __________ over the relevant range of market wage rates.

Leisure is

Exhibit 12-4 In Exhibit 12-4, when the wage rate increases from $9 to $12, the substitution effect outweighs the income effect.

Which of the following is not true about taste for work?

Which of the following would be considered leisure?

As the wage rate increases, the substitution effect causes workers to supply more time to market work and the income effect causes them to supply less time to market work.

An industrial union can obtain a wage higher than the competitive level

Because leisure is a normal good, an increase in income

If the quantity of labor Sam supplies to a job is zero over the realistic range of wages, Sam

Which of the following union tactics, if successful, would increase wages and create a surplus of labor?

A stock market crash that reduces the value of an individual's trust fund would tend to

As the wage rate increases, the income effect tends to reduce the quantity of labor supplied to the market.

Exhibit 12-6 In Exhibit 12-6, if a union raises the wage to $4, total employment in the market will be

Work is an attractive use of your time

Which of the following explains the recent decline in union membership in the United States?

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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