Question 1

Which of the following is correct?

Accepted Answer

A) The federal government can delay any strike for 80 days. 
B) About 3 percent of total work time is lost in the United States because of strikes. 
C) Work time lost may overstate the cost of a strike if the work stoppage disrupts production in related industries. 
D) Work time lost may overstate the cost of a strike if nonstruck firms increase their production. 
A) The federal government can delay any strike for 80 days. 
B) About 3 percent of total work time is lost in the United States because of strikes. 
C) Work time lost may overstate the cost of a strike if the work stoppage disrupts production in related industries. 
D) Work time lost may overstate the cost of a strike if nonstruck firms increase their production.

Question 2

Which of the following economic effects of unions tends to improve efficiency?

Accepted Answer

A) featherbedding 
B) strike or lockout 
C) union wage advantage 
D) voice mechanism 
A) featherbedding 
B) strike or lockout 
C) union wage advantage 
D) voice mechanism

Question 3

Assume that your nominal wage was fixed at $15 an hour, and the price index rose from 100 to 105.In this case, your real wage has

Accepted Answer

A) decreased to $10. 
B) increased to $15.75. 
C) decreased to $14.29. 
D) increased to $20. 
A) decreased to $10. 
B) increased to $15.75. 
C) decreased to $14.29. 
D) increased to $20.

Question 4

Industrial unions are more likely to increase wage rates by restricting the supply of labor than are craft unions.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?

Accepted Answer

A) geographical immobility of workers 
B) readily available information about job opportunities and pay 
C) principal-agent problems 
D) compensating wage differentials 
A) geographical immobility of workers 
B) readily available information about job opportunities and pay 
C) principal-agent problems 
D) compensating wage differentials

Question 6

Inclusive unions restrict the number of jobs directly by shifting the labor supply curve to the left; exclusive unions restrict the number of jobs by imposing above-equilibrium wage rates on the employer.

Accepted Answer

A) True 
 B)False

Question 7

"Player drafts" of professional athletes

Accepted Answer

A) increase the competitiveness of the labor market for professional athletes. 
B) reduce the profitability of professional sports franchises. 
C) promote monopsony in the hiring of professional athletes. 
D) increase salaries of professional athletes. 
A) increase the competitiveness of the labor market for professional athletes. 
B) reduce the profitability of professional sports franchises. 
C) promote monopsony in the hiring of professional athletes. 
D) increase salaries of professional athletes.

Question 8

The labor supply curve facing a purely competitive firm is perfectly inelastic.

Accepted Answer

A) True 
 B)False

Question 9

Marginal resource (labor) cost will always exceed the wage rate when the employer is selling its product in an imperfectly competitive market.Topic: A Purely Competitive Labor Market
Topic: Monopsony Model

Accepted Answer

A) True 
 B)False

Question 10

One reason for the high wage rates in the United States and other advanced economies is the high productivity of labor in these countries.

Accepted Answer

A) True 
 B)False

Question 11

According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because

Accepted Answer

A) the demand for minimum-wage labor is highly elastic. 
B) it reduces turnover among minimum-wage workers, prompts employers to use them more efficiently, and thus raises their average productivity. 
C) it encourages teenagers to stay in school. 
D) employers substitute lower fringe benefits for higher pay, keeping their compensation costs the same. 
A) the demand for minimum-wage labor is highly elastic. 
B) it reduces turnover among minimum-wage workers, prompts employers to use them more efficiently, and thus raises their average productivity. 
C) it encourages teenagers to stay in school. 
D) employers substitute lower fringe benefits for higher pay, keeping their compensation costs the same.

Question 12

A craft union attempts to increase wage rates by

Accepted Answer

A) equating the MRP and the MRC curves. 
B) shifting the labor supply curve to the left. 
C) shifting the labor supply curve to the right. 
D) shifting the MRP curve to the right. 
A) equating the MRP and the MRC curves. 
B) shifting the labor supply curve to the left. 
C) shifting the labor supply curve to the right. 
D) shifting the MRP curve to the right.

Question 13

The concept of "wages" includes the following items, except

Accepted Answer

A) direct money payments like salaries and commissions. 
B) bonuses and royalties. 
C) amounts spent by workers. 
D) fringe benefits like health insurance and paid leave. 
A) direct money payments like salaries and commissions. 
B) bonuses and royalties. 
C) amounts spent by workers. 
D) fringe benefits like health insurance and paid leave.

Question 14

Which of the following is a valid explanation for real wage growth?

Accepted Answer

A) the rising cost of capital accumulation 
B) a contraction of employment in manufacturing industries 
C) an increase in the quantity of labor 
D) a rising rate of labor productivity growth 
A) the rising cost of capital accumulation 
B) a contraction of employment in manufacturing industries 
C) an increase in the quantity of labor 
D) a rising rate of labor productivity growth

Question 15

State right-to-work laws

Accepted Answer

A) permit employers to hire nonunion workers only if union labor is unavailable. 
B) prohibit employers from discriminating against minority groups in hiring workers. 
C) prohibit unions from discriminating against minority groups in recruiting members. 
D) make compulsory union membership (for example, a union shop) illegal. 
A) permit employers to hire nonunion workers only if union labor is unavailable. 
B) prohibit employers from discriminating against minority groups in hiring workers. 
C) prohibit unions from discriminating against minority groups in recruiting members. 
D) make compulsory union membership (for example, a union shop) illegal.

Question 16

Which union status provides the weakest form of union security?

Accepted Answer

A) open shop 
B) agency shop 
C) union shop 
D) closed shop 
A) open shop 
B) agency shop 
C) union shop 
D) closed shop

Question 17

For the firm, the major goal of profit sharing plans is to

Accepted Answer

A) force workers to incur some of the business risk. 
B) overcome the monopsony problem of having to pay higher wages to attract additional workers. 
C) overcome the principal-agent problem by better aligning the workers' interests with those of the firm. 
D) reduce total compensation payments. 
A) force workers to incur some of the business risk. 
B) overcome the monopsony problem of having to pay higher wages to attract additional workers. 
C) overcome the principal-agent problem by better aligning the workers' interests with those of the firm. 
D) reduce total compensation payments.

Question 18

Noncompeting groups of workers are the result of

Accepted Answer

A) differences in the age-earnings profiles of workers. 
B) differences in the "job tastes" of workers. 
C) differences in the innate and acquired abilities of workers. 
D) geographic immobility. 
A) differences in the age-earnings profiles of workers. 
B) differences in the "job tastes" of workers. 
C) differences in the innate and acquired abilities of workers. 
D) geographic immobility.

Question 19

A decrease in the supply curve of nurses could be accounted for by all of the following except a(n)

Accepted Answer

A) increase in the rewards available in other comparable occupations. 
B) increase in the training requirements for nurses. 
C) reduction in the number of nursing schools. 
D) cut in the wages of nurses. 
A) increase in the rewards available in other comparable occupations. 
B) increase in the training requirements for nurses. 
C) reduction in the number of nursing schools. 
D) cut in the wages of nurses.

Question 20

Other things constant, which of the following is inversely related to inflation?

Accepted Answer

A) nominal wage only 
B) real wage only 
C) average price level in the economy 
D) both nominal wage and real wage 
A) nominal wage only 
B) real wage only 
C) average price level in the economy 
D) both nominal wage and real wage

Exam 17: Wage Determination

Which of the following is correct?

Which of the following economic effects of unions tends to improve efficiency?

Assume that your nominal wage was fixed at $15 an hour, and the price index rose from 100 to 105.In this case, your real wage has

Industrial unions are more likely to increase wage rates by restricting the supply of labor than are craft unions.

Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?

Inclusive unions restrict the number of jobs directly by shifting the labor supply curve to the left; exclusive unions restrict the number of jobs by imposing above-equilibrium wage rates on the employer.

"Player drafts" of professional athletes

The labor supply curve facing a purely competitive firm is perfectly inelastic.

Marginal resource (labor) cost will always exceed the wage rate when the employer is selling its product in an imperfectly competitive market.Topic: A Purely Competitive Labor Market Topic: Monopsony Model

One reason for the high wage rates in the United States and other advanced economies is the high productivity of labor in these countries.

According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because

A craft union attempts to increase wage rates by

The concept of "wages" includes the following items, except

Which of the following is a valid explanation for real wage growth?

State right-to-work laws

Which union status provides the weakest form of union security?

For the firm, the major goal of profit sharing plans is to

Noncompeting groups of workers are the result of

A decrease in the supply curve of nurses could be accounted for by all of the following except a(n)

Other things constant, which of the following is inversely related to inflation?

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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