Question 1

Exhibit 12-7   The situation represented in Exhibit 12-7 reflects all of the following employment conditions except one.Which is the exception?

Accepted Answer

A) collective bargaining by an industrial union for higher wages and benefits 
B) high union membership fees 
C) imposition of qualifying exams for prospective workers 
D) imposition of long apprenticeship periods 
E) restriction of employment to union members 
A) collective bargaining by an industrial union for higher wages and benefits 
B) high union membership fees 
C) imposition of qualifying exams for prospective workers 
D) imposition of long apprenticeship periods 
E) restriction of employment to union members

Question 2

Exhibit 12-6   In Exhibit 12-6, if a union raises the market wage to $4, total employment by the firm (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 3

Which of the following groups is a craft union?

Accepted Answer

A) auto workers 
B) steel workers 
C) writers 
D) government employees 
E) construction workers 
A) auto workers 
B) steel workers 
C) writers 
D) government employees 
E) construction workers

Question 4

If a union raises initiation fees significantly and if employers in the industry hire only union workers, the supply of union labor curve will shift to the left.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements regarding labor supply is false?

Accepted Answer

A) Jerry's labor supply curve can bend backward if the income effect of a higher wage rate outweighs the substitution effect. 
B) Bob's labor supply curve will not bend backward if the wage rate is never so high that the income effect outweighs the substitution effect. 
C) If there is a wage rate above which the income effect is at least as great as the substitution effect, the labor supply curve will be vertical or bend backward. 
D) The labor supply curve will slope upward if the income effect dominates the substitution effect. 
E) Hayden's offer to work more hours as the result of a wage increase suggests that the substitution effect dominates the income effect. 
A) Jerry's labor supply curve can bend backward if the income effect of a higher wage rate outweighs the substitution effect. 
B) Bob's labor supply curve will not bend backward if the wage rate is never so high that the income effect outweighs the substitution effect. 
C) If there is a wage rate above which the income effect is at least as great as the substitution effect, the labor supply curve will be vertical or bend backward. 
D) The labor supply curve will slope upward if the income effect dominates the substitution effect. 
E) Hayden's offer to work more hours as the result of a wage increase suggests that the substitution effect dominates the income effect.

Question 6

Which of the following is true of union membership rates in the United States?

Accepted Answer

A) The rate for males is greater than the rate for females because there are more males in the service sector. 
B) The rate for males is greater than the rate for females because there are more females in the service sector. 
C) The rate for whites is greater than the rate for blacks because there are more blacks in the service sector. 
D) The rate for blacks is greater than the rate for whites because there are more whites in heavy industry. 
E) The rate for blacks is less than the rate for whites because there are more whites in heavy industry. 
A) The rate for males is greater than the rate for females because there are more males in the service sector. 
B) The rate for males is greater than the rate for females because there are more females in the service sector. 
C) The rate for whites is greater than the rate for blacks because there are more blacks in the service sector. 
D) The rate for blacks is greater than the rate for whites because there are more whites in heavy industry. 
E) The rate for blacks is less than the rate for whites because there are more whites in heavy industry.

Question 7

Exhibit 12-6   Consider Exhibit 12-6.If firms in this market are identical, how many firms are hiring in this labor market?

Accepted Answer

A) 50 
B) 60 
C) 67 
D) 72 
E) 80 
A) 50 
B) 60 
C) 67 
D) 72 
E) 80

Question 8

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

Accepted Answer

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

Question 9

A consumer maximizes utility by allocating time so that the expected marginal utilities of the last unit of time spent in each activity are identical.

Accepted Answer

A) True 
 B)False

Question 10

Jobs that pay higher salaries must be riskier than lower-paying professions.

Accepted Answer

A) True 
 B)False

Question 11

Exhibit 12-7   Exhibit 12-7 reflects which of the following?

Accepted Answer

A) A union that is restricting the supply of labor. 
B) A firm that is restricting the number of job openings. 
C) The price of the good produced by this labor is rising. 
D) The price of the good produced by this labor is falling. 
E) The union that is creating an excess supply of labor. 
A) A union that is restricting the supply of labor. 
B) A firm that is restricting the number of job openings. 
C) The price of the good produced by this labor is rising. 
D) The price of the good produced by this labor is falling. 
E) The union that is creating an excess supply of labor.

Question 12

People who are more productive in market work

Accepted Answer

A) produce less for themselves 
B) spend more time engaged in nonmarket work 
C) work fewer hours in market work and enjoy more leisure 
D) are more likely to acquire skills and education through nonmarket work 
E) are attracted to market employment at lower wages 
A) produce less for themselves 
B) spend more time engaged in nonmarket work 
C) work fewer hours in market work and enjoy more leisure 
D) are more likely to acquire skills and education through nonmarket work 
E) are attracted to market employment at lower wages

Question 13

Unions sometimes try to ensure that employers hire more union labor than they might otherwise prefer by

Accepted Answer

A) collective bargaining 
B) featherbedding 
C) work enlargement 
D) restricting the supply of labor 
E) increasing the demand for union-made products 
A) collective bargaining 
B) featherbedding 
C) work enlargement 
D) restricting the supply of labor 
E) increasing the demand for union-made products

Question 14

Which of the following could explain why hockey players earn such high income?

Accepted Answer

A) All of the following are correct. 
B) Average careers are very short; the chances of being unemployed are greater than in many other jobs. 
C) The income effect encourages them to work more as the wage increases. 
D) Many people want to become hockey players. 
E) The threat of injury makes the job more exciting than other jobs. 
A) All of the following are correct. 
B) Average careers are very short; the chances of being unemployed are greater than in many other jobs. 
C) The income effect encourages them to work more as the wage increases. 
D) Many people want to become hockey players. 
E) The threat of injury makes the job more exciting than other jobs.

Question 15

The market labor supply curve is the

Accepted Answer

A) vertical sum of the individual labor supply curves 
B) horizontal sum of the individual labor supply curves 
C) vertical difference of the individual labor supply curves 
D) horizontal difference of the individual labor supply curves 
E) average of the individual labor supply curves 
A) vertical sum of the individual labor supply curves 
B) horizontal sum of the individual labor supply curves 
C) vertical difference of the individual labor supply curves 
D) horizontal difference of the individual labor supply curves 
E) average of the individual labor supply curves

Question 16

An impartial observer who attempts to settle disagreements by listening to both sides separately and making suggestions is called a(n)

Accepted Answer

A) collective bargaining agent 
B) arbitrageur 
C) mediator 
D) binding negotiator 
E) judge 
A) collective bargaining agent 
B) arbitrageur 
C) mediator 
D) binding negotiator 
E) judge

Question 17

Exhibit 12-1   Along which part of the labor supply curve in Exhibit 12-1 does the income effect of a wage change just equal the substitution effect?

Accepted Answer

A) between points a and b 
B) between points a and c 
C) between points b and c 
D) between points b and d 
E) between points c and d 
A) between points a and b 
B) between points a and c 
C) between points b and c 
D) between points b and d 
E) between points c and d

Question 18

Exhibit 12-5   Consider Exhibit 12-5.If a union imposes a wage floor at $5, then

Accepted Answer

A) the excess demand for labor will lead to unemployment 
B) the excess supply of labor will cause the wage to fall to $4 
C) fewer people will be hired than would be in a competitive market 
D) the excess demand for labor will lead to a drop in wages 
E) the excess demand for labor will lead to an increase in wages 
A) the excess demand for labor will lead to unemployment 
B) the excess supply of labor will cause the wage to fall to $4 
C) fewer people will be hired than would be in a competitive market 
D) the excess demand for labor will lead to a drop in wages 
E) the excess demand for labor will lead to an increase in wages

Question 19

If an industrial union is able to negotiate a wage above the market-clearing wage, the non-union wage in other industries 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 20

The amount of time an individual is willing to offer for a wage depends on the

Accepted Answer

A) all of the following 
B) value of time devoted to leisure activities 
C) boredom, discomfort, and aggravation associated with work 
D) value of time devoted to nonmarket work 
E) satisfaction gained from goods purchased with the wages 
A) all of the following 
B) value of time devoted to leisure activities 
C) boredom, discomfort, and aggravation associated with work 
D) value of time devoted to nonmarket work 
E) satisfaction gained from goods purchased with the wages

Exam 12: Labor Markets and Labor Unions

Exhibit 12-7 The situation represented in Exhibit 12-7 reflects all of the following employment conditions except one.Which is the exception?

Exhibit 12-6 In Exhibit 12-6, if a union raises the market wage to $4, total employment by the firm (in the right-hand panel)will be

Which of the following groups is a craft union?

If a union raises initiation fees significantly and if employers in the industry hire only union workers, the supply of union labor curve will shift to the left.

Which of the following statements regarding labor supply is false?

Which of the following is true of union membership rates in the United States?

Exhibit 12-6 Consider Exhibit 12-6.If firms in this market are identical, how many firms are hiring in this labor market?

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

A consumer maximizes utility by allocating time so that the expected marginal utilities of the last unit of time spent in each activity are identical.

Jobs that pay higher salaries must be riskier than lower-paying professions.

Exhibit 12-7 Exhibit 12-7 reflects which of the following?

People who are more productive in market work

Unions sometimes try to ensure that employers hire more union labor than they might otherwise prefer by

Which of the following could explain why hockey players earn such high income?

The market labor supply curve is the

An impartial observer who attempts to settle disagreements by listening to both sides separately and making suggestions is called a(n)

Exhibit 12-1 Along which part of the labor supply curve in Exhibit 12-1 does the income effect of a wage change just equal the substitution effect?

Exhibit 12-5 Consider Exhibit 12-5.If a union imposes a wage floor at $5, then

If an industrial union is able to negotiate a wage above the market-clearing wage, the non-union wage in other industries will

The amount of time an individual is willing to offer for a wage depends on the

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