Question 1

Incentive pay plans that seek to tie worker compensation more closely to worker performance include the following, except

Accepted Answer

A) commissions or royalties. 
B) a seniority-based pay scale. 
C) stock options and profit-sharing. 
D) efficiency wages. 
A) commissions or royalties. 
B) a seniority-based pay scale. 
C) stock options and profit-sharing. 
D) efficiency wages.

Question 2

In a certain labor market, workers are required to have a certain skill-set.There are many workers who have the skill-set, but they can only find employment in one company.That one company is called a

Accepted Answer

A) pure monopoly. 
B) monopolistic competitor. 
C) monopsony. 
D) natural monopoly. 
A) pure monopoly. 
B) monopolistic competitor. 
C) monopsony. 
D) natural monopoly.

Question 3

Which of the following is illegal under federal labor law?

Accepted Answer

A) closed shops 
B) agency shops 
C) union shops 
D) state right-to-work laws 
A) closed shops 
B) agency shops 
C) union shops 
D) state right-to-work laws

Question 4

Professions that require their practitioners to pass a licensure exam, like accountants and doctors, exemplify the exclusive union model of how a labor union raises wage rates.

Accepted Answer

A) True 
 B)False

Question 5

Available research suggests that the union wage advantage diminishes the national output by

Accepted Answer

A) 15 percent. 
B) 8 percent. 
C) 3 percent. 
D) less than 1 percent. 
A) 15 percent. 
B) 8 percent. 
C) 3 percent. 
D) less than 1 percent.

Question 6

Marginal resource cost refers to the

Accepted Answer

A) increase in total revenue resulting from the sale of the extra output of one more worker. 
B) price at which additional units of a resource can be hired in an imperfectly competitive resource market. 
C) increase in total cost resulting from producing one more unit of output. 
D) amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource. 
A) increase in total revenue resulting from the sale of the extra output of one more worker. 
B) price at which additional units of a resource can be hired in an imperfectly competitive resource market. 
C) increase in total cost resulting from producing one more unit of output. 
D) amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource.

Question 7

Seven of the 50 states account for approximately half of all union members in the United States.

Accepted Answer

A) True 
 B)False

Question 8

Nominal wage measures the purchasing power of a given amount of real wage.

Accepted Answer

A) True 
 B)False

Question 9

(Consider This) Which of the following best explains why total compensation for U.S.workers has increased significantly over the past several decades, but take-home pay by U.S.workers has increased by much less?

Accepted Answer

A) An increased share of total compensation has gone to provide health insurance to workers. 
B) The share of total compensation going to retirement accounts has increased relative to all other components of compensation. 
C) Total compensation is measured in current dollar terms; take-home pay is measured in inflation-adjusted dollars. 
D) Workers are receiving a much larger share of total compensation in the form of goods and services produced by the firms that employ them. 
A) An increased share of total compensation has gone to provide health insurance to workers. 
B) The share of total compensation going to retirement accounts has increased relative to all other components of compensation. 
C) Total compensation is measured in current dollar terms; take-home pay is measured in inflation-adjusted dollars. 
D) Workers are receiving a much larger share of total compensation in the form of goods and services produced by the firms that employ them.

Question 10

Over the long run, real earnings per worker can increase only at about the same rate as the economy's rate of growth of

Accepted Answer

A) total output. 
B) stock of capital. 
C) output per worker. 
D) international trade. 
A) total output. 
B) stock of capital. 
C) output per worker. 
D) international trade.

Question 11

Exclusive unionism has the economic effect of

Accepted Answer

A) strengthening the bargaining position of an industrial union. 
B) weakening the bargaining position of a craft union. 
C) decreasing the supply of labor. 
D) increasing the demand for labor. 
A) strengthening the bargaining position of an industrial union. 
B) weakening the bargaining position of a craft union. 
C) decreasing the supply of labor. 
D) increasing the demand for labor.

Question 12

Empirical studies suggest that, other things equal, the smaller the number of hospitals in a city, the lower are nurses' wages.This is evidence that

Accepted Answer

A) the labor markets of nurses are purely competitive. 
B) hospitals may possess some degree of monopsony power. 
C) the minimum wage does not apply to nurses. 
D) labor unions have been ineffective in increasing the wages of nurses. 
A) the labor markets of nurses are purely competitive. 
B) hospitals may possess some degree of monopsony power. 
C) the minimum wage does not apply to nurses. 
D) labor unions have been ineffective in increasing the wages of nurses.

Question 13

Union membership among workers in America has been declining since the 1950s.

Accepted Answer

A) True 
 B)False

Question 14

Which action taken by a worker would not be an investment in human capital?

Accepted Answer

A) enrolling in college 
B) enrolling in trade school 
C) purchasing exercise equipment 
D) purchasing stock in a pharmaceutical company 
A) enrolling in college 
B) enrolling in trade school 
C) purchasing exercise equipment 
D) purchasing stock in a pharmaceutical company

Question 15

If a firm must pay a daily wage of $35 to hire 11 workers and a daily wage of $40 to hire 12 workers, its marginal resource cost of hiring the 12th worker is $40.

Accepted Answer

A) True 
 B)False

Question 16

Pay-for-performance systems seek to deal with the

Accepted Answer

A) unemployment problem. 
B) monitoring problem. 
C) discouraged worker problem. 
D) principal-agent problem. 
A) unemployment problem. 
B) monitoring problem. 
C) discouraged worker problem. 
D) principal-agent problem.

Question 17

Compensating differences in wages pay workers for

Accepted Answer

A) differences in worker training and skills. 
B) differences in the nonmonetary characteristics of jobs. 
C) geographic immobility. 
D) discrimination in hiring and firing. 
A) differences in worker training and skills. 
B) differences in the nonmonetary characteristics of jobs. 
C) geographic immobility. 
D) discrimination in hiring and firing.

Question 18

In the United States, the rate of unionization is

Accepted Answer

A) higher in mining than in government. 
B) lower in transportation than in agriculture. 
C) higher in transportation than in retail trade. 
D) lower in government than in finance, insurance, and real estate. 
A) higher in mining than in government. 
B) lower in transportation than in agriculture. 
C) higher in transportation than in retail trade. 
D) lower in government than in finance, insurance, and real estate.

Question 19

Which of the following is not a major common topic of collective bargaining?

Accepted Answer

A) union status 
B) product marketing 
C) grievance procedures 
D) seniority and job security 
A) union status 
B) product marketing 
C) grievance procedures 
D) seniority and job security

Question 20

The principal-agent problem, as applied to the management of a company, would have the

Accepted Answer

A) stockholders as the agents and the managers as the principals. 
B) company as the principal and the customer as the agent. 
C) stockholders as the principals and the managers as the agents. 
D) customer as the principal and the company as the agent. 
A) stockholders as the agents and the managers as the principals. 
B) company as the principal and the customer as the agent. 
C) stockholders as the principals and the managers as the agents. 
D) customer as the principal and the company as the agent.

Exam 17: Wage Determination

Incentive pay plans that seek to tie worker compensation more closely to worker performance include the following, except

In a certain labor market, workers are required to have a certain skill-set.There are many workers who have the skill-set, but they can only find employment in one company.That one company is called a

Which of the following is illegal under federal labor law?

Professions that require their practitioners to pass a licensure exam, like accountants and doctors, exemplify the exclusive union model of how a labor union raises wage rates.

Available research suggests that the union wage advantage diminishes the national output by

Marginal resource cost refers to the

Seven of the 50 states account for approximately half of all union members in the United States.

Nominal wage measures the purchasing power of a given amount of real wage.

(Consider This) Which of the following best explains why total compensation for U.S.workers has increased significantly over the past several decades, but take-home pay by U.S.workers has increased by much less?

Over the long run, real earnings per worker can increase only at about the same rate as the economy's rate of growth of

Exclusive unionism has the economic effect of

Empirical studies suggest that, other things equal, the smaller the number of hospitals in a city, the lower are nurses' wages.This is evidence that

Union membership among workers in America has been declining since the 1950s.

Which action taken by a worker would not be an investment in human capital?

If a firm must pay a daily wage of $35 to hire 11 workers and a daily wage of $40 to hire 12 workers, its marginal resource cost of hiring the 12th worker is $40.

Pay-for-performance systems seek to deal with the

Compensating differences in wages pay workers for

In the United States, the rate of unionization is

Which of the following is not a major common topic of collective bargaining?

The principal-agent problem, as applied to the management of a company, would have the

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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