Question 1

As evidenced by one of the exhibits in this chapter,union wages are ___________ higher than non-union wages in the same industry.

Accepted Answer

A)  always 
B)  sometimes 
C)  rarely 
D)  never 
A)  always 
B)  sometimes 
C)  rarely 
D)  never

Question 2

A possible objective of labor unions is

Accepted Answer

A)  employment for all their members. 
B)  minimizing the total wage bill. 
C)  maximizing income for all union members. 
D)  all of the above 
E)  none of the above 
A)  employment for all their members. 
B)  minimizing the total wage bill. 
C)  maximizing income for all union members. 
D)  all of the above 
E)  none of the above

Question 3

Exhibit 28-3
  
-Refer to Exhibit 28-3.Consider the monopsony setting.In the absence of collective bargaining,what wage rate does the profit-maximizing monopsonist pay?

Accepted Answer

A)  W1 
B)  W2 
C)  W3 
D)  none of the above 
A)  W1 
B)  W2 
C)  W3 
D)  none of the above

Question 4

If a labor union tries to reduce the availability of substitutes for the product it sells,it is attempting to affect the __________ for labor.But if it tries to increase substitute factor prices,it is attempting to affect the __________ labor.

Accepted Answer

A)  elasticity of demand; supply of 
B)  demand; elasticity of demand for 
C)  elasticity of demand; demand for 
D)  demand; supply of 
E)  none of the above 
A)  elasticity of demand; supply of 
B)  demand; elasticity of demand for 
C)  elasticity of demand; demand for 
D)  demand; supply of 
E)  none of the above

Question 5

Exhibit 28-l
  
-Refer to Exhibit 28-l.Four demand curves for labor are displayed: D1,D2,D3,and D4. Which provides the least pronounced wage-employment tradeoff?

Accepted Answer

A)  D1 
B)  D2 
C)  D3 
D)  D4 
A)  D1 
B)  D2 
C)  D3 
D)  D4

Question 6

Exhibit 28-10
  
-Refer to Exhibit 28-10.If the firm in the exhibit is a monopsony,then the curve represented by the number 1 is its

Accepted Answer

A)  factor supply curve. 
B)  marginal factor cost curve. 
C)  marginal revenue product curve. 
D)  marginal cost curve. 
E)  average fixed cost curve. 
A)  factor supply curve. 
B)  marginal factor cost curve. 
C)  marginal revenue product curve. 
D)  marginal cost curve. 
E)  average fixed cost curve.

Question 7

Labor unions tend to favor strictly enforced immigration laws with the intention of lowering the elasticity of demand for union labor.

Accepted Answer

A) True 
 B)False

Question 8

Right-to-work laws

Accepted Answer

A)  say that everyone has the right to work and that it is the responsibility of the government to make available employment opportunities. 
B)  ensure that employers cannot prevent persons from gaining employment simply because they are members of a union. 
C)  allow everyone to gain employment at a firm without being a union member but also require that once hired the employee must join the union. 
D)  make it illegal to require union membership for purposes of employment. 
A)  say that everyone has the right to work and that it is the responsibility of the government to make available employment opportunities. 
B)  ensure that employers cannot prevent persons from gaining employment simply because they are members of a union. 
C)  allow everyone to gain employment at a firm without being a union member but also require that once hired the employee must join the union. 
D)  make it illegal to require union membership for purposes of employment.

Question 9

Exhibit 28-5
  
-Refer to Exhibit 28-5.In which case or cases does the increase in the wage rate from W1 to W2 definitely cause the total wage bill to rise?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (1) and (2) 
E)  (1) and (3) 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (1) and (2) 
E)  (1) and (3)

Question 10

Exhibit 28-5
  
-For a union to be successful in increasing the total wage bill received by its members by forcing up the wage rate,the demand curve for labor needs to be

Accepted Answer

A)  elastic. 
B)  perfectly elastic. 
C)  unitary elastic. 
D)  inelastic. 
A)  elastic. 
B)  perfectly elastic. 
C)  unitary elastic. 
D)  inelastic.

Question 11

Which of the following will make the cutback in union labor for a given wage increase smaller?

Accepted Answer

A)  an increase in the number of substitutes for union labor 
B)  an increase in the elasticity of demand for the product that labor produces 
C)  a decrease in the elasticity of demand for the product that labor produces 
D)  an increase in the total revenue for the product that labor produces 
E)  a decrease in the total revenue for the product that labor produces 
A)  an increase in the number of substitutes for union labor 
B)  an increase in the elasticity of demand for the product that labor produces 
C)  a decrease in the elasticity of demand for the product that labor produces 
D)  an increase in the total revenue for the product that labor produces 
E)  a decrease in the total revenue for the product that labor produces

Question 12

As long as there are advancements in technology,some workers will be temporarily displaced.

Accepted Answer

A) True 
 B)False

Question 13

Exhibit 28-7
  
-Refer to Exhibit 28-7.For technological reasons,this monopsonist can hire labor only in increments of 10 workers.The profit-maximizing number of workers is

Accepted Answer

A)  10. 
B)  20. 
C)  30. 
D)  40. 
E)  50. 
A)  10. 
B)  20. 
C)  30. 
D)  40. 
E)  50.

Question 14

A single buyer in a factor market is known as a

Accepted Answer

A)  monopoly. 
B)  monopsony. 
C)  oligopsony. 
D)  pure buyer. 
A)  monopoly. 
B)  monopsony. 
C)  oligopsony. 
D)  pure buyer.

Question 15

The traditional view of labor unions is that they enhance worker productivity because the workers feel more secure in their jobs and because there is a low turnover rate in union firms.

Accepted Answer

A) True 
 B)False

Question 16

A union shop is an organization that

Accepted Answer

A)  requires individuals to join a union within a certain period of time after becoming employed. 
B)  requires individuals to be members of the union before they can be hired. 
C)  is legal in all fifty states. 
D)  is set up by labor unions to train new entrants and inform members of jobs in different states. 
E)  a and c 
A)  requires individuals to join a union within a certain period of time after becoming employed. 
B)  requires individuals to be members of the union before they can be hired. 
C)  is legal in all fifty states. 
D)  is set up by labor unions to train new entrants and inform members of jobs in different states. 
E)  a and c

Question 17

Which of the following statements is true?

Accepted Answer

A)  The fewer the substitute factors for union labor, the higher the elasticity of demand for union labor, and the smaller the cutback in union labor for any given wage increase. 
B)  The fewer the substitute factors for union labor, the lower the elasticity of demand for union labor, and the larger the cutback in union labor for any given wage increase. 
C)  The more the substitute factors for union labor, the higher the elasticity of demand for union labor, and the smaller the cutback in union labor for any given wage increase. 
D)  The more the substitute factors for union labor, the higher the elasticity of demand for union labor, and the larger the cutback in union labor for any given wage increase. 
E)  none of the above 
A)  The fewer the substitute factors for union labor, the higher the elasticity of demand for union labor, and the smaller the cutback in union labor for any given wage increase. 
B)  The fewer the substitute factors for union labor, the lower the elasticity of demand for union labor, and the larger the cutback in union labor for any given wage increase. 
C)  The more the substitute factors for union labor, the higher the elasticity of demand for union labor, and the smaller the cutback in union labor for any given wage increase. 
D)  The more the substitute factors for union labor, the higher the elasticity of demand for union labor, and the larger the cutback in union labor for any given wage increase. 
E)  none of the above

Question 18

Exhibit 28-12
  
-Refer to Exhibit 28-12.As the firm increases employment from 2 to 3 workers,its marginal factor cost (MFC)is

Accepted Answer

A)  $24. 
B)  $11. 
C)  $33. 
D)  $8. 
A)  $24. 
B)  $11. 
C)  $33. 
D)  $8.

Question 19

Exhibit 28-4
  
-Refer to Exhibit 28-4.If a labor union successfully organizes the labor market and sets the wage rate at W4,the quantity of labor hired will be

Accepted Answer

A)  Q1. 
B)  Q2. 
C)  Q3. 
D)  Q4. 
E)  cannot be determined 
A)  Q1. 
B)  Q2. 
C)  Q3. 
D)  Q4. 
E)  cannot be determined

Question 20

If a monopsonist is hiring factors,it will choose to hire that quantity at which __________ and pay a wage rate that is __________.

Accepted Answer

A)  MR = MC; equal to labor's MRP 
B)  the supply curve of labor intersects the demand curve for labor; equal to labor's MRP 
C)  MRP = MFC; equal to labor's MRP 
D)  MRP = MFC; less than labor's MRP 
E)  the supply curve of labor intersects the demand curve for labor; less than MFC 
A)  MR = MC; equal to labor's MRP 
B)  the supply curve of labor intersects the demand curve for labor; equal to labor's MRP 
C)  MRP = MFC; equal to labor's MRP 
D)  MRP = MFC; less than labor's MRP 
E)  the supply curve of labor intersects the demand curve for labor; less than MFC

Exam 28: Wages,Unions,and Labor

As evidenced by one of the exhibits in this chapter,union wages are ___________ higher than non-union wages in the same industry.

A possible objective of labor unions is

Exhibit 28-3 -Refer to Exhibit 28-3.Consider the monopsony setting.In the absence of collective bargaining,what wage rate does the profit-maximizing monopsonist pay?

If a labor union tries to reduce the availability of substitutes for the product it sells,it is attempting to affect the __________ for labor.But if it tries to increase substitute factor prices,it is attempting to affect the __________ labor.

Exhibit 28-l -Refer to Exhibit 28-l.Four demand curves for labor are displayed: D1,D2,D3,and D4. Which provides the least pronounced wage-employment tradeoff?

Exhibit 28-10 -Refer to Exhibit 28-10.If the firm in the exhibit is a monopsony,then the curve represented by the number 1 is its

Labor unions tend to favor strictly enforced immigration laws with the intention of lowering the elasticity of demand for union labor.

Right-to-work laws

Exhibit 28-5 -Refer to Exhibit 28-5.In which case or cases does the increase in the wage rate from W1 to W2 definitely cause the total wage bill to rise?

Exhibit 28-5 -For a union to be successful in increasing the total wage bill received by its members by forcing up the wage rate,the demand curve for labor needs to be

Which of the following will make the cutback in union labor for a given wage increase smaller?

As long as there are advancements in technology,some workers will be temporarily displaced.

Exhibit 28-7 -Refer to Exhibit 28-7.For technological reasons,this monopsonist can hire labor only in increments of 10 workers.The profit-maximizing number of workers is

A single buyer in a factor market is known as a

The traditional view of labor unions is that they enhance worker productivity because the workers feel more secure in their jobs and because there is a low turnover rate in union firms.

A union shop is an organization that

Which of the following statements is true?

Exhibit 28-12 -Refer to Exhibit 28-12.As the firm increases employment from 2 to 3 workers,its marginal factor cost (MFC)is

Exhibit 28-4 -Refer to Exhibit 28-4.If a labor union successfully organizes the labor market and sets the wage rate at W4,the quantity of labor hired will be

If a monopsonist is hiring factors,it will choose to hire that quantity at which __________ and pay a wage rate that is __________.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

If a labor union tries to reduce the availability of substitutes for the product it sells,it is attempting to affect the for labor.But if it tries to increase substitute factor prices,it is attempting to affect the labor.

Exhibit 28-l -Refer to Exhibit 28-l.Four demand curves for labor are displayed: D₁,D₂,D₃,and D₄. Which provides the least pronounced wage-employment tradeoff?

Exhibit 28-5 -Refer to Exhibit 28-5.In which case or cases does the increase in the wage rate from W₁ to W₂ definitely cause the total wage bill to rise?

Exhibit 28-4 -Refer to Exhibit 28-4.If a labor union successfully organizes the labor market and sets the wage rate at W₄,the quantity of labor hired will be

If a monopsonist is hiring factors,it will choose to hire that quantity at which and pay a wage rate that is .