Question 1

If a professional association restricts membership and firms cannot employ nonassociation workers, the equilibrium wage will increase.

Accepted Answer

A) True 
 B)False

Question 2

Abby maximizes utility by allocating time among leisure, market work, and nonmarket work so that the

Accepted Answer

A) total utility of each is equal 
B) average utility of each is equal 
C) total utility per hour of each is equal 
D) marginal utility per hour of each is equal 
E) maximum amount of goods and services can be acquired 
A) total utility of each is equal 
B) average utility of each is equal 
C) total utility per hour of each is equal 
D) marginal utility per hour of each is equal 
E) maximum amount of goods and services can be acquired

Question 3

The market labor supply curve is the sum of

Accepted Answer

A) individual labor supply curves at each wage rate 
B) the upward-sloping portions of individual labor supply curves 
C) the downward-sloping portions of individual labor supply curves 
D) the average of all individual labor supply curves 
E) individual labor supply curves at each net utility for market work 
A) individual labor supply curves at each wage rate 
B) the upward-sloping portions of individual labor supply curves 
C) the downward-sloping portions of individual labor supply curves 
D) the average of all individual labor supply curves 
E) individual labor supply curves at each net utility for market work

Question 4

In many cities, garbage collectors earn more than social workers.What could explain this wage differential?

Accepted Answer

A) Social work provides more nonmonetary rewards than garbage collecting does. 
B) There is a greater demand for social workers. 
C) There is a greater supply of trash collectors. 
D) Collecting garbage requires less skill. 
E) Social work is a less prestigious profession. 
A) Social work provides more nonmonetary rewards than garbage collecting does. 
B) There is a greater demand for social workers. 
C) There is a greater supply of trash collectors. 
D) Collecting garbage requires less skill. 
E) Social work is a less prestigious profession.

Question 5

An extra hour of market work is an attractive use of your time

Accepted Answer

A) because of the utility generated by goods made possible through the extra work 
B) solely because of the personal satisfaction it generates 
C) when the disutility of income generated by the extra work exceeds the utility 
D) when the net utility of the extra goods made possible and the extra work is greater than zero 
E) only when you do not enjoy leisure time 
A) because of the utility generated by goods made possible through the extra work 
B) solely because of the personal satisfaction it generates 
C) when the disutility of income generated by the extra work exceeds the utility 
D) when the net utility of the extra goods made possible and the extra work is greater than zero 
E) only when you do not enjoy leisure time

Question 6

Through collective bargaining,

Accepted Answer

A) representatives of an employer negotiate with the rank and file of the union membership 
B) union and nonunion members combine forces in negotiation 
C) craft and industrial unions combine forces in negotiation 
D) contracts are worked out between representatives of the union and employer representatives 
E) union workers must accept contracts negotiated by their representatives 
A) representatives of an employer negotiate with the rank and file of the union membership 
B) union and nonunion members combine forces in negotiation 
C) craft and industrial unions combine forces in negotiation 
D) contracts are worked out between representatives of the union and employer representatives 
E) union workers must accept contracts negotiated by their representatives

Question 7

An impartial observer who listens to both sides in a labor-management dispute and makes suggestions as to how the two sides could compromise is called

Accepted Answer

A) a mediator 
B) an arbitrator 
C) a litigator 
D) a scab 
E) a judge 
A) a mediator 
B) an arbitrator 
C) a litigator 
D) a scab 
E) a judge

Question 8

Exhibit 12-6   If the market represented in Exhibit 12-6 is allowed to operate freely, 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 9

Exhibit 12-8   Which of the following does Exhibit 12-8 illustrate?

Accepted Answer

A) The demand for labor increases and wages increase when a union disbands. 
B) The supply of labor increases and wages increase when a union disbands. 
C) Demanders of labor must pay higher wages after a craft union forms. 
D) Demanders of labor must pay higher wages after an industrial union forms. 
E) A union causes the productivity of labor to increase, causing an increase in the firm's demand for labor. 
A) The demand for labor increases and wages increase when a union disbands. 
B) The supply of labor increases and wages increase when a union disbands. 
C) Demanders of labor must pay higher wages after a craft union forms. 
D) Demanders of labor must pay higher wages after an industrial union forms. 
E) A union causes the productivity of labor to increase, causing an increase in the firm's demand for labor.

Question 10

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 11

The individual supply curve of labor is backward bending because the substitution effect offsets the income effect at higher wage rates.

Accepted Answer

A) True 
 B)False

Question 12

Most labor negotiations in the United States end without a strike.

Accepted Answer

A) True 
 B)False

Question 13

Two workers are employed in the same job by the same firm; however, they are paid different wage rates.This could be explained by differences in

Accepted Answer

A) the income effect 
B) the price of the firm's output 
C) their marginal products due to differences in ability 
D) working conditions 
E) risk 
A) the income effect 
B) the price of the firm's output 
C) their marginal products due to differences in ability 
D) working conditions 
E) risk

Question 14

An increase in the cost of training to acquire a skill, which must be paid by the worker,

Accepted Answer

A) increases both the supply of and demand for labor in that market 
B) decreases both the supply of and demand for labor in that market 
C) increases the supply of labor and decreases the demand for labor in that market 
D) decreases the supply of labor and increases the demand for labor in that market 
E) decreases the supply of labor only in that market 
A) increases both the supply of and demand for labor in that market 
B) decreases both the supply of and demand for labor in that market 
C) increases the supply of labor and decreases the demand for labor in that market 
D) decreases the supply of labor and increases the demand for labor in that market 
E) decreases the supply of labor only in that market

Question 15

Currently, union membership in the U.S.is

Accepted Answer

A) declining as a percentage of the labor force 
B) remaining constant 
C) increasing as a percentage of the labor force 
D) increasing in the service sector 
E) decreasing among government employees 
A) declining as a percentage of the labor force 
B) remaining constant 
C) increasing as a percentage of the labor force 
D) increasing in the service sector 
E) decreasing among government employees

Question 16

People make mistakes in allocating their time

Accepted Answer

A) because they always act irrationally 
B) despite always having expectations fulfilled 
C) only when leisure is a normal good 
D) because acquiring information is costly 
E) more often when the cost of making a mistake is high 
A) because they always act irrationally 
B) despite always having expectations fulfilled 
C) only when leisure is a normal good 
D) because acquiring information is costly 
E) more often when the cost of making a mistake is high

Question 17

An increase in labor supply will increase the equilibrium wage rate.

Accepted Answer

A) True 
 B)False

Question 18

Over a typical month, Ying Liao will balance spending time on meals, work, entertainment, study, sleep, and so on by ensuring that there is equality among the marginal

Accepted Answer

A) factor costs of each market work activity 
B) products of each market work activity 
C) revenues from each of the products sold 
D) wages of each hour worked 
E) expected net utilities of each activity 
A) factor costs of each market work activity 
B) products of each market work activity 
C) revenues from each of the products sold 
D) wages of each hour worked 
E) expected net utilities of each activity

Question 19

Featherbedding is a union practice designed to increase employment of union members.

Accepted Answer

A) True 
 B)False

Question 20

Sharon wants a career as an accountant.During the summer she turns down a job painting houses at $6 an hour to work in an accounting office for $4 an hour.Which of the following would not explain her choice?

Accepted Answer

A) Accounting is more prestigious. 
B) The summer accounting job will help her get a full-time job in accounting when she graduates. 
C) She prefers to work inside. 
D) She would face the law of diminishing marginal utility if she had more goods. 
E) She dislikes the messiness of painting. 
A) Accounting is more prestigious. 
B) The summer accounting job will help her get a full-time job in accounting when she graduates. 
C) She prefers to work inside. 
D) She would face the law of diminishing marginal utility if she had more goods. 
E) She dislikes the messiness of painting.

Exam 12: Labor Markets and Labor Unions

If a professional association restricts membership and firms cannot employ nonassociation workers, the equilibrium wage will increase.

Abby maximizes utility by allocating time among leisure, market work, and nonmarket work so that the

The market labor supply curve is the sum of

In many cities, garbage collectors earn more than social workers.What could explain this wage differential?

An extra hour of market work is an attractive use of your time

Through collective bargaining,

An impartial observer who listens to both sides in a labor-management dispute and makes suggestions as to how the two sides could compromise is called

Exhibit 12-6 If the market represented in Exhibit 12-6 is allowed to operate freely, total employment in the market will be

Exhibit 12-8 Which of the following does Exhibit 12-8 illustrate?

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

The individual supply curve of labor is backward bending because the substitution effect offsets the income effect at higher wage rates.

Most labor negotiations in the United States end without a strike.

Two workers are employed in the same job by the same firm; however, they are paid different wage rates.This could be explained by differences in

An increase in the cost of training to acquire a skill, which must be paid by the worker,

Currently, union membership in the U.S.is

People make mistakes in allocating their time

An increase in labor supply will increase the equilibrium wage rate.

Over a typical month, Ying Liao will balance spending time on meals, work, entertainment, study, sleep, and so on by ensuring that there is equality among the marginal

Featherbedding is a union practice designed to increase employment of union members.

Sharon wants a career as an accountant.During the summer she turns down a job painting houses at $6 an hour to work in an accounting office for $4 an hour.Which of the following would not explain her choice?

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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