Question 1

A "closed shop" is

Accepted Answer

A)  an organization in which a worker is not required to be a member of the union to be hired, but must become a member within a certain period of time after being employed. 
B)  an organization in which an employee must belong to the union before he or she can be hired. 
C)  an organization of domestic firms that is closed to foreign firms. 
D)  a political organization that seeks to raise tariffs on foreign-produced goods imported into the United States. 
E)  none of the above 
A)  an organization in which a worker is not required to be a member of the union to be hired, but must become a member within a certain period of time after being employed. 
B)  an organization in which an employee must belong to the union before he or she can be hired. 
C)  an organization of domestic firms that is closed to foreign firms. 
D)  a political organization that seeks to raise tariffs on foreign-produced goods imported into the United States. 
E)  none of the above

Question 2

Exhibit 28-8
  
-Refer to Exhibit 28-8.What is the total wage bill of the profit- maximizing monoposonist?

Accepted Answer

A)  W5 x Q3 
B)  W4 x Q5 
C)  W3 x Q2 
D)  W2 x Q3 
A)  W5 x Q3 
B)  W4 x Q5 
C)  W3 x Q2 
D)  W2 x Q3

Question 3

If a labor union can affect __________,it can affect its wage-employment tradeoff.

Accepted Answer

A)  the availability of substitutes for the product it produces 
B)  availability of substitute factors 
C)  the fixed costs of the firm it works for 
D)  a and b 
E)  a, b, and c 
A)  the availability of substitutes for the product it produces 
B)  availability of substitute factors 
C)  the fixed costs of the firm it works for 
D)  a and b 
E)  a, b, and c

Question 4

Exhibit 28-5
  
-Refer to Exhibit 28-5.In which of the following cases has the increase in the wage from W1 to W2 been brought about by a prolonged successful training program undertaken by the union for the benefit of its members?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  none of the above 
A)  (1) 
B)  (2) 
C)  (3) 
D)  none of the above

Question 5

If a firm is a monopsony,then it

Accepted Answer

A)  can pay any price it wants for the factors that it hires. 
B)  will have to pay the same price to each factor owner that supplies its factor. 
C)  will have to pay a higher price to purchase additional units of a factor. 
D)  need not lower the price of its product to induce buyers to purchase additional quantities. 
A)  can pay any price it wants for the factors that it hires. 
B)  will have to pay the same price to each factor owner that supplies its factor. 
C)  will have to pay a higher price to purchase additional units of a factor. 
D)  need not lower the price of its product to induce buyers to purchase additional quantities.

Question 6

In collective bargaining,

Accepted Answer

A)  union members act together as a single unit. 
B)  each union member represents herself in labor-management negotiations. 
C)  the objective of the union is to increase its bargaining power with management. 
D)  a and c 
E)  b and c 
A)  union members act together as a single unit. 
B)  each union member represents herself in labor-management negotiations. 
C)  the objective of the union is to increase its bargaining power with management. 
D)  a and c 
E)  b and c

Question 7

Which of the following is true for a monopsony?

Accepted Answer

A)  It cannot buy additional units of a factor without increasing the price it pays for the factor. 
B)  It can buy additional units of a factor without increasing the price it pays for the factor. 
C)  The supply of labor it faces is the industry supply of labor. 
D)  a and c 
E)  b and c 
A)  It cannot buy additional units of a factor without increasing the price it pays for the factor. 
B)  It can buy additional units of a factor without increasing the price it pays for the factor. 
C)  The supply of labor it faces is the industry supply of labor. 
D)  a and c 
E)  b and c

Question 8

Since workers today can move from city to city (quite easily)and from firm to firm (again,quite easily),it is unlikely that there are very many pure

Accepted Answer

A)  monopsony firms. 
B)  oligopoly firms. 
C)  monopoly firms. 
D)  perfectly competitive firms. 
E)  factor price takers. 
A)  monopsony firms. 
B)  oligopoly firms. 
C)  monopoly firms. 
D)  perfectly competitive firms. 
E)  factor price takers.

Question 9

All economists assert that the National Collegiate Athletic Association (NCAA)is a type of cartel that enforces the monopsony behavior of universities and colleges in the market for college athletes.

Accepted Answer

A) True 
 B)False

Question 10

The traditional (or orthodox)view of labor unions is that they

Accepted Answer

A)  positively impact productivity and efficiency. 
B)  negatively impact productivity and efficiency. 
C)  drive an artificial wedge between the wages of comparable labor in the union and nonunion sectors of the labor market. 
D)  a and c 
E)  b and c 
A)  positively impact productivity and efficiency. 
B)  negatively impact productivity and efficiency. 
C)  drive an artificial wedge between the wages of comparable labor in the union and nonunion sectors of the labor market. 
D)  a and c 
E)  b and c

Question 11

Exhibit 28-2
  
-Refer to Exhibit 28-2.The union wants management to believe the supply curve of labor is S'S instead of SS.What does supply curve S'S represent?

Accepted Answer

A)  It represents a situation where management cannot hire workers for less than W2, and if the firm wants to hire more workers than it hires at equilibrium, it will have to pay a wage between W1 and W2. 
B)  It represents a situation where management cannot hire workers for more than W2, and if the firm wants to hire more workers than Q2 it will have to pay more than W1. 
C)  It represents a situation where management cannot hire workers for less than W2, and if the firm wants to hire more than Q3 workers it will have to pay more than W2. 
D)  It represents a situation where management cannot hire Q1 - Q2 workers for less than W2, but that Q3 - Q1 workers can be hired for less. 
A)  It represents a situation where management cannot hire workers for less than W2, and if the firm wants to hire more workers than it hires at equilibrium, it will have to pay a wage between W1 and W2. 
B)  It represents a situation where management cannot hire workers for more than W2, and if the firm wants to hire more workers than Q2 it will have to pay more than W1. 
C)  It represents a situation where management cannot hire workers for less than W2, and if the firm wants to hire more than Q3 workers it will have to pay more than W2. 
D)  It represents a situation where management cannot hire Q1 - Q2 workers for less than W2, but that Q3 - Q1 workers can be hired for less.

Question 12

Unions often encourage the buying public to "look for the union label" primarily because

Accepted Answer

A)  they feel that only U.S. and/or union-made goods are of high quality. 
B)  they feel that it is un-American to buy goods from foreign producers. 
C)  doing so may increase demand for the product they produce, which in turn may increase the wage rate paid to union employees. 
D)  they realize that Americans are too busy to take time to gather all the important information about a product and these labels are a way of informing the buying public that union-made goods are well made. 
A)  they feel that only U.S. and/or union-made goods are of high quality. 
B)  they feel that it is un-American to buy goods from foreign producers. 
C)  doing so may increase demand for the product they produce, which in turn may increase the wage rate paid to union employees. 
D)  they realize that Americans are too busy to take time to gather all the important information about a product and these labels are a way of informing the buying public that union-made goods are well made.

Question 13

Exhibit 28-3
  
-Refer to Exhibit 28-3.Consider the monopsony setting.In the absence of collective bargaining,what quantity of labor does the profit-maximizing monopsonist hire?

Accepted Answer

A)  Q1 
B)  Q2 
C)  Q3 
D)  none of the above 
A)  Q1 
B)  Q2 
C)  Q3 
D)  none of the above

Question 14

Suppose the marginal revenue product of individuals who work in the union sector is greater than that of individuals who work in the nonunion sector.Normally,we would expect labor to move from the nonunionized sector to the unionized sector-from where it is worth less to where it is worth more.But if this cannot happen,owing to the supply-restraining efforts of the union,then

Accepted Answer

A)  wages in the nonunion sector will rise. 
B)  wages in the union sector will fall. 
C)  there will be a misallocation of labor---not all labor will be employed where it is most valuable. 
D)  workers in the union sector will move to the nonunion sector. 
A)  wages in the nonunion sector will rise. 
B)  wages in the union sector will fall. 
C)  there will be a misallocation of labor---not all labor will be employed where it is most valuable. 
D)  workers in the union sector will move to the nonunion sector.

Exam 28: Wages,Unions,and Labor

A "closed shop" is

Exhibit 28-8 -Refer to Exhibit 28-8.What is the total wage bill of the profit- maximizing monoposonist?

If a labor union can affect __________,it can affect its wage-employment tradeoff.

Exhibit 28-5 -Refer to Exhibit 28-5.In which of the following cases has the increase in the wage from W1 to W2 been brought about by a prolonged successful training program undertaken by the union for the benefit of its members?

If a firm is a monopsony,then it

In collective bargaining,

Which of the following is true for a monopsony?

Since workers today can move from city to city (quite easily)and from firm to firm (again,quite easily),it is unlikely that there are very many pure

All economists assert that the National Collegiate Athletic Association (NCAA)is a type of cartel that enforces the monopsony behavior of universities and colleges in the market for college athletes.

The traditional (or orthodox)view of labor unions is that they

Exhibit 28-2 -Refer to Exhibit 28-2.The union wants management to believe the supply curve of labor is S'S instead of SS.What does supply curve S'S represent?

Unions often encourage the buying public to "look for the union label" primarily because

Exhibit 28-3 -Refer to Exhibit 28-3.Consider the monopsony setting.In the absence of collective bargaining,what quantity of labor does the profit-maximizing monopsonist hire?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

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Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

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Classical Macroeconomics and the Self Regulating Economy

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

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Perfect Competition

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Exhibit 28-5 -Refer to Exhibit 28-5.In which of the following cases has the increase in the wage from W₁ to W₂ been brought about by a prolonged successful training program undertaken by the union for the benefit of its members?