Question 1

Labor unions generally favor

Accepted Answer

A)  import restrictions. 
B)  strict immigration laws. 
C)  increasing the minimum wage. 
D)  a and c 
E)  a, b, and c 
A)  import restrictions. 
B)  strict immigration laws. 
C)  increasing the minimum wage. 
D)  a and c 
E)  a, b, and c

Question 2

Exhibit 28-5
  
-Refer to Exhibit 28-5.In case (3),with a rise in the wage rate from W1 to W2,the wage bill will rise if

Accepted Answer

A)  Q1 x W3 > Q2 x W1. 
B)  (Q3 - Q2) x W3 > Q1 x W1. 
C)  (W2-W1) x Q2 > (Q1 - Q2) x W1. 
D)  (W2 - W3) x Q2 > (W2 - W3) x (Q3 - Q2). 
A)  Q1 x W3 > Q2 x W1. 
B)  (Q3 - Q2) x W3 > Q1 x W1. 
C)  (W2-W1) x Q2 > (Q1 - Q2) x W1. 
D)  (W2 - W3) x Q2 > (W2 - W3) x (Q3 - Q2).

Question 3

To increase the wages of its members,a labor union might attempt to

Accepted Answer

A)  lower the elasticity of demand for its labor. 
B)  increase the demand for union labor. 
C)  increase the supply of union labor. 
D)  a and b 
E)  all of the above 
A)  lower the elasticity of demand for its labor. 
B)  increase the demand for union labor. 
C)  increase the supply of union labor. 
D)  a and b 
E)  all of the above

Question 4

A monopsony,as compared to a perfectly competitive firm,pays __________ wage and hires __________ labor.

Accepted Answer

A)  a higher; less 
B)  a higher; more 
C)  a lower; less 
D)  a lower; more 
E)  the same; the same amount of 
A)  a higher; less 
B)  a higher; more 
C)  a lower; less 
D)  a lower; more 
E)  the same; the same amount of

Question 5

In a monopsony model of the labor market,the firm finds that (over a range)as more workers are hired,the wage rate

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  remains identical to the marginal factor cost per worker. 
E)  b and d 
A)  increases. 
B)  decreases. 
C)  remains constant. 
D)  remains identical to the marginal factor cost per worker. 
E)  b and d

Question 6

Some economists refer to a monopsony as a

Accepted Answer

A)  factor price taker. 
B)  factor buyer. 
C)  buyer's monopoly. 
D)  single-price monopolist. 
E)  Economists don't refer to a monopsony as anything other than a monopsony. 
A)  factor price taker. 
B)  factor buyer. 
C)  buyer's monopoly. 
D)  single-price monopolist. 
E)  Economists don't refer to a monopsony as anything other than a monopsony.

Question 7

Exhibit 28-5
  
-Refer to Exhibit 28-5.In case (1),with a rise in the wage rate from W1 to W2,the wage bill will fall if

Accepted Answer

A)  (Q1 - Q2) x W1 > (W2 - W1) x Q2. 
B)  (Q3 - Q2) x W3 > (W2 - W3) x Q2. 
C)  W2 x Q2 > Q3 x W1. 
D)  (W1 - W3) x Q2 > (W2 - W1) x Q2. 
A)  (Q1 - Q2) x W1 > (W2 - W1) x Q2. 
B)  (Q3 - Q2) x W3 > (W2 - W3) x Q2. 
C)  W2 x Q2 > Q3 x W1. 
D)  (W1 - W3) x Q2 > (W2 - W1) x Q2.

Question 8

In a perfectly competitive industry,do higher wages for labor union members diminish profits?

Accepted Answer

A)  Yes, in the short run, but not in the long run, in which some firms exit the industry because of higher costs. 
B)  Yes, in the long run, but not in the short run, because profits are always fixed in the short run. 
C)  No, higher wage costs can affect profits only if they affect labor productivity and this doesn't happen. 
D)  No, because higher labor costs usually bring more firms into the industry and this effect dampens price rises. 
A)  Yes, in the short run, but not in the long run, in which some firms exit the industry because of higher costs. 
B)  Yes, in the long run, but not in the short run, because profits are always fixed in the short run. 
C)  No, higher wage costs can affect profits only if they affect labor productivity and this doesn't happen. 
D)  No, because higher labor costs usually bring more firms into the industry and this effect dampens price rises.

Question 9

Union training programs are meant to shift the __________ labor to the __________.

Accepted Answer

A)  demand curve for; left 
B)  demand curve for; right 
C)  supply curve of; left 
D)  supply curve of; right 
A)  demand curve for; left 
B)  demand curve for; right 
C)  supply curve of; left 
D)  supply curve of; right

Question 10

Unions are interested in increasing the productivity of their members because as their productivity rises,the __________ their labor __________ and their wages __________.

Accepted Answer

A)  demand for; falls; rise. 
B)  demand for; rises; rise. 
C)  supply of; rises; rise. 
D)  supply of; falls; rise. 
A)  demand for; falls; rise. 
B)  demand for; rises; rise. 
C)  supply of; rises; rise. 
D)  supply of; falls; rise.

Question 11

Exhibit 28-10
  
-Refer to Exhibit 28-10.If the firm in the exhibit is a monopsony,then the difference between its marginal factor cost and the wage rate it pays is equal to

Accepted Answer

A)  W4 - W2. 
B)  W3 - W2. 
C)  W4 - W1. 
D)  W3 - W1. 
E)  There is no difference between the marginal factor cost and the wage rate a monopsony pays. 
A)  W4 - W2. 
B)  W3 - W2. 
C)  W4 - W1. 
D)  W3 - W1. 
E)  There is no difference between the marginal factor cost and the wage rate a monopsony pays.

Question 12

Which of the following comes closest to being a monopsony?

Accepted Answer

A)  a car manufacturer in Detroit 
B)  a McDonald's in a big city 
C)  a coal company who employees all of the workers in a given town 
D)  a farmer who hires labor 
A)  a car manufacturer in Detroit 
B)  a McDonald's in a big city 
C)  a coal company who employees all of the workers in a given town 
D)  a farmer who hires labor

Question 13

Which of the following is true?

Accepted Answer

A)  The lower the elasticity of demand for cars, the higher the elasticity of demand for the workers that produce cars. 
B)  The higher the elasticity of demand for cars, the lower the elasticity of demand for the workers that produce cars. 
C)  The lower the elasticity of demand for cars, the lower the elasticity of demand for the workers that produce cars. 
D)  The fewer the substitute factors for union labor, the higher the elasticity of demand for union labor. 
E)  c and d 
A)  The lower the elasticity of demand for cars, the higher the elasticity of demand for the workers that produce cars. 
B)  The higher the elasticity of demand for cars, the lower the elasticity of demand for the workers that produce cars. 
C)  The lower the elasticity of demand for cars, the lower the elasticity of demand for the workers that produce cars. 
D)  The fewer the substitute factors for union labor, the higher the elasticity of demand for union labor. 
E)  c and d

Question 14

If a firm is a monopsonist,then it faces

Accepted Answer

A)  a downward sloping demand curve for its product, and its marginal revenue curve will lie below its demand curve. 
B)  a horizontal marginal factor cost curve. 
C)  an upward sloping factor supply curve, and its marginal factor cost curve will lie above the factor supply curve. 
D)  an upward sloping factor supply curve, and its marginal factor cost curve will coincide with the factor supply curve. 
E)  an upward-sloping factor supply curve, and its marginal factor cost curve will lie below the factor supply curve. 
A)  a downward sloping demand curve for its product, and its marginal revenue curve will lie below its demand curve. 
B)  a horizontal marginal factor cost curve. 
C)  an upward sloping factor supply curve, and its marginal factor cost curve will lie above the factor supply curve. 
D)  an upward sloping factor supply curve, and its marginal factor cost curve will coincide with the factor supply curve. 
E)  an upward-sloping factor supply curve, and its marginal factor cost curve will lie below the factor supply curve.

Question 15

If,through collective bargaining,a union is able to raise the wage above the existing competitive equilibrium wage,

Accepted Answer

A)  fewer workers will be employed than before the wage increase. 
B)  more workers will be employed than before the wage increase. 
C)  the same number of workers will be employed as before the wage increase. 
D)  the number of workers that will be employed is not related to the wage increase. 
A)  fewer workers will be employed than before the wage increase. 
B)  more workers will be employed than before the wage increase. 
C)  the same number of workers will be employed as before the wage increase. 
D)  the number of workers that will be employed is not related to the wage increase.

Question 16

If a union seeks to maximize the total wage bill received by its members,then it should negotiate the

Accepted Answer

A)  highest possible wage rate. 
B)  wage rate at which all of its members are employed. 
C)  wage rate that maximizes the firm's profits. 
D)  wage rate at which the elasticity of demand for workers is 1. 
E)  wage rate at which the elasticity of demand for workers is at its highest. 
A)  highest possible wage rate. 
B)  wage rate at which all of its members are employed. 
C)  wage rate that maximizes the firm's profits. 
D)  wage rate at which the elasticity of demand for workers is 1. 
E)  wage rate at which the elasticity of demand for workers is at its highest.

Question 17

Exhibit 28-9
  
-Refer to Exhibit 28-9.Let DA and DB represent demand for labor curves facing unions A and B,respectively.As a result of their efforts,both unions succeed in increasing the wage rate from W? to W?.In terms of the wage-employment trade-off,the wage increase

Accepted Answer

A)  had a larger impact on employment for union A than for union B. 
B)  had a larger impact on employment for union B than for union A. 
C)  had the same impact on employment in both unions. 
D)  cannot be determined without further information. 
A)  had a larger impact on employment for union A than for union B. 
B)  had a larger impact on employment for union B than for union A. 
C)  had the same impact on employment in both unions. 
D)  cannot be determined without further information.

Question 18

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 amount of unemployment in this market will be equal to

Accepted Answer

A)  Q4 - Q3. 
B)  zero. 
C)  Q3 - Q1. 
D)  Q2 - Q3. 
E)  Q4 - Q1. 
A)  Q4 - Q3. 
B)  zero. 
C)  Q3 - Q1. 
D)  Q2 - Q3. 
E)  Q4 - Q1.

Question 19

If a labor union successfully practices collective bargaining against a monopsonist,then

Accepted Answer

A)  product price will decrease. 
B)  both wages and employment may rise. 
C)  both wages and employment may fall. 
D)  workers will probably receive a wage further away from their marginal revenue products. 
E)  b and d 
A)  product price will decrease. 
B)  both wages and employment may rise. 
C)  both wages and employment may fall. 
D)  workers will probably receive a wage further away from their marginal revenue products. 
E)  b and d

Question 20

Research by H.Gregg Lewis shows that over the period 1929-1979,

Accepted Answer

A)  the average wage of union members was 10 to 15 percent higher than that of comparable nonunion labor. 
B)  the average wage of union members was 10 to 15 percent lower than that of comparable nonunion labor. 
C)  labor unions increased productivity. 
D)  labor unions decreased productivity. 
E)  none of the above 
A)  the average wage of union members was 10 to 15 percent higher than that of comparable nonunion labor. 
B)  the average wage of union members was 10 to 15 percent lower than that of comparable nonunion labor. 
C)  labor unions increased productivity. 
D)  labor unions decreased productivity. 
E)  none of the above

Exam 28: Wages,Unions,and Labor

Labor unions generally favor

Exhibit 28-5 -Refer to Exhibit 28-5.In case (3),with a rise in the wage rate from W1 to W2,the wage bill will rise if

To increase the wages of its members,a labor union might attempt to

A monopsony,as compared to a perfectly competitive firm,pays __________ wage and hires __________ labor.

In a monopsony model of the labor market,the firm finds that (over a range)as more workers are hired,the wage rate

Some economists refer to a monopsony as a

Exhibit 28-5 -Refer to Exhibit 28-5.In case (1),with a rise in the wage rate from W1 to W2,the wage bill will fall if

In a perfectly competitive industry,do higher wages for labor union members diminish profits?

Union training programs are meant to shift the __________ labor to the __________.

Unions are interested in increasing the productivity of their members because as their productivity rises,the __________ their labor __________ and their wages __________.

Exhibit 28-10 -Refer to Exhibit 28-10.If the firm in the exhibit is a monopsony,then the difference between its marginal factor cost and the wage rate it pays is equal to

Which of the following comes closest to being a monopsony?

Which of the following is true?

If a firm is a monopsonist,then it faces

If,through collective bargaining,a union is able to raise the wage above the existing competitive equilibrium wage,

If a union seeks to maximize the total wage bill received by its members,then it should negotiate the

Exhibit 28-9 -Refer to Exhibit 28-9.Let DA and DB represent demand for labor curves facing unions A and B,respectively.As a result of their efforts,both unions succeed in increasing the wage rate from W? to W?.In terms of the wage-employment trade-off,the wage increase

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 amount of unemployment in this market will be equal to

If a labor union successfully practices collective bargaining against a monopsonist,then

Research by H.Gregg Lewis shows that over the period 1929-1979,

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

Exhibit 28-5 -Refer to Exhibit 28-5.In case (3),with a rise in the wage rate from W₁ to W₂,the wage bill will rise if

A monopsony,as compared to a perfectly competitive firm,pays wage and hires labor.

Exhibit 28-5 -Refer to Exhibit 28-5.In case (1),with a rise in the wage rate from W₁ to W₂,the wage bill will fall if

Union training programs are meant to shift the labor to the .

Unions are interested in increasing the productivity of their members because as their productivity rises,the their labor and their wages __.

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 amount of unemployment in this market will be equal to