Question 1

The labor market for teachers in a small, isolated community that has one school district would be best described as a(n)

Accepted Answer

A) natural monopoly. 
B) bilateral monopoly. 
C) monopsony. 
D) oligopsony. 
A) natural monopoly. 
B) bilateral monopoly. 
C) monopsony. 
D) oligopsony.

Question 2

According to the Conference Board data for 2013, which of the following nations had significantly higher hourly wages for production workers compared to the U.S.?

Accepted Answer

A) Germany 
B) United Kingdom 
C) Japan 
D) Canada 
A) Germany 
B) United Kingdom 
C) Japan 
D) Canada

Question 3

A firm operating in a purely competitive resource market faces a resource supply curve that is

Accepted Answer

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

Question 4

One of the potential negative side effects of pay in the form of sales commissions is

Accepted Answer

A) a greater incentive for salespeople to engage in unethical or fraudulent sales practices that may eventually cause legal problems for the firm. 
B) increased volatility of sales revenue for the firm. 
C) the potential that pay levels may get so high that they will increase a firm's marginal wage cost more than its marginal revenue product. 
D) an increased likelihood of shirking by workers. 
A) a greater incentive for salespeople to engage in unethical or fraudulent sales practices that may eventually cause legal problems for the firm. 
B) increased volatility of sales revenue for the firm. 
C) the potential that pay levels may get so high that they will increase a firm's marginal wage cost more than its marginal revenue product. 
D) an increased likelihood of shirking by workers.

Question 5

Featherbedding refers to

Accepted Answer

A) a situation in which a union forces an employer to hire union workers in preference to nonunion workers. 
B) the requirement that unneeded workers be retained on a job. 
C) the refusal by one union to handle or transport goods produced by workers in another union. 
D) disputes among two or more unions as to which will perform certain jobs. 
A) a situation in which a union forces an employer to hire union workers in preference to nonunion workers. 
B) the requirement that unneeded workers be retained on a job. 
C) the refusal by one union to handle or transport goods produced by workers in another union. 
D) disputes among two or more unions as to which will perform certain jobs.

Question 6

A market where there is only a single buyer is called a(n)

Accepted Answer

A) monopoly. 
B) monopsony. 
C) oligopoly. 
D) dominant firm. 
A) monopoly. 
B) monopsony. 
C) oligopoly. 
D) dominant firm.

Question 7

(Last Word) Occupational licensing in the United States

Accepted Answer

A) is required for a majority of jobs. 
B) is limited primarily to those jobs directly related to human health and safety. 
C) safeguards consumers in some industries, but in others is mostly a way to restrict entry and raise wages. 
D) has diminished in recent years as a result of industry deregulation. 
A) is required for a majority of jobs. 
B) is limited primarily to those jobs directly related to human health and safety. 
C) safeguards consumers in some industries, but in others is mostly a way to restrict entry and raise wages. 
D) has diminished in recent years as a result of industry deregulation.

Question 8

The rising general level of real wages in the United States has occurred because the growing population has increased the supply of labor relative to the demand for it.

Accepted Answer

A) True 
 B)False

Question 9

According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S.dollar terms in 2013?

Accepted Answer

A) Sweden 
B) Germany 
C) Australia 
D) United States 
A) Sweden 
B) Germany 
C) Australia 
D) United States

Question 10

The productivity and real wages of workers in industrially advanced economies have risen historically partly because

Accepted Answer

A) workers have acquired less education and training over time. 
B) workers have been able to use larger quantities of capital equipment. 
C) over time, the capital equipment used by workers has deteriorated in quality. 
D) the supply of labor has increased. 
A) workers have acquired less education and training over time. 
B) workers have been able to use larger quantities of capital equipment. 
C) over time, the capital equipment used by workers has deteriorated in quality. 
D) the supply of labor has increased.

Question 11

In considering real-world situations, we must recognize the fact that by "wages" in this chapter, we mean the following, except the

Accepted Answer

A) total price that employers pay to obtain labor. 
B) total income earned by households. 
C) total compensation of workers. 
D) total of direct payments and fringe benefits to workers. 
A) total price that employers pay to obtain labor. 
B) total income earned by households. 
C) total compensation of workers. 
D) total of direct payments and fringe benefits to workers.

Question 12

A firm might choose to pay its employees a wage higher than that which would clear the market because

Accepted Answer

A) the higher wage raises the opportunity cost of shirking. 
B) the higher wage may shift the labor demand curve to the left. 
C) the firm will have higher turnover, allowing "new blood" to invigorate older workers, who have a greater tendency to shirk. 
D) this policy reduces the proportion of experienced to inexperienced workers, resulting in a lower overall wage bill. 
A) the higher wage raises the opportunity cost of shirking. 
B) the higher wage may shift the labor demand curve to the left. 
C) the firm will have higher turnover, allowing "new blood" to invigorate older workers, who have a greater tendency to shirk. 
D) this policy reduces the proportion of experienced to inexperienced workers, resulting in a lower overall wage bill.

Question 13

Which of the following tactics is most associated with the demand-enhancement union model?

Accepted Answer

A) reducing the price of inputs that are substitutes for union workers 
B) lobbying for increases in public expenditures on the product it is producing 
C) restricting the number of workers allowed to work in the industry 
D) increasing the price of products that are complements for the one it is producing 
A) reducing the price of inputs that are substitutes for union workers 
B) lobbying for increases in public expenditures on the product it is producing 
C) restricting the number of workers allowed to work in the industry 
D) increasing the price of products that are complements for the one it is producing

Question 14

Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hiring of labor.

Accepted Answer

A) True 
 B)False

Question 15

U.S.union membership has declined substantially in recent years.Which of the following is not usually cited as a causal factor?

Accepted Answer

A) Most nonunion workers are in manufacturing industries. 
B) Import competition has reduced or restrained the growth of employment in some highly unionized industries. 
C) Some industries and firms have migrated to the less-unionized South. 
D) Managerial opposition to unions has intensified. 
A) Most nonunion workers are in manufacturing industries. 
B) Import competition has reduced or restrained the growth of employment in some highly unionized industries. 
C) Some industries and firms have migrated to the less-unionized South. 
D) Managerial opposition to unions has intensified.

Question 16

The basic explanation for high real wages in the United States and other industrially advanced economies is that the

Accepted Answer

A) labor supply has increased more rapidly than labor demand in these nations. 
B) labor demand has increased more rapidly than labor supply in these nations. 
C) unemployment in these nations has remained relatively stable over the years. 
D) inflation rate in these nations has been higher than the rate of increase in nominal wages. 
A) labor supply has increased more rapidly than labor demand in these nations. 
B) labor demand has increased more rapidly than labor supply in these nations. 
C) unemployment in these nations has remained relatively stable over the years. 
D) inflation rate in these nations has been higher than the rate of increase in nominal wages.

Question 17

In monopsony situations, a minimum wage might increase wage and employment levels.

Accepted Answer

A) True 
 B)False

Question 18

Marginal revenue product (MRP) of labor refers to the

Accepted Answer

A) increase in total revenue resulting from selling an additional unit of output. 
B) amount by which a firm's total resource cost increases when it employs one more unit of labor. 
C) increase in total revenue resulting from hiring one more unit of labor. 
D) price at which additional units of labor can be employed in a monopsonized labor market. 
A) increase in total revenue resulting from selling an additional unit of output. 
B) amount by which a firm's total resource cost increases when it employs one more unit of labor. 
C) increase in total revenue resulting from hiring one more unit of labor. 
D) price at which additional units of labor can be employed in a monopsonized labor market.

Question 19

Suppose a powerful labor union negotiates a wage for its members above the equilibrium wage rate in a nonunionized market.A likely result of this is that

Accepted Answer

A) the union will have difficulty recruiting new members. 
B) union members will be able to work more overtime than before. 
C) this firm will make up for the higher wage rate by expanding output. 
D) not everyone who wants to work at the new wage will be able to find jobs. 
A) the union will have difficulty recruiting new members. 
B) union members will be able to work more overtime than before. 
C) this firm will make up for the higher wage rate by expanding output. 
D) not everyone who wants to work at the new wage will be able to find jobs.

Question 20

The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

Accepted Answer

A) True 
 B)False

Exam 17: Wage Determination

The labor market for teachers in a small, isolated community that has one school district would be best described as a(n)

According to the Conference Board data for 2013, which of the following nations had significantly higher hourly wages for production workers compared to the U.S.?

A firm operating in a purely competitive resource market faces a resource supply curve that is

One of the potential negative side effects of pay in the form of sales commissions is

Featherbedding refers to

A market where there is only a single buyer is called a(n)

(Last Word) Occupational licensing in the United States

The rising general level of real wages in the United States has occurred because the growing population has increased the supply of labor relative to the demand for it.

According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S.dollar terms in 2013?

The productivity and real wages of workers in industrially advanced economies have risen historically partly because

In considering real-world situations, we must recognize the fact that by "wages" in this chapter, we mean the following, except the

A firm might choose to pay its employees a wage higher than that which would clear the market because

Which of the following tactics is most associated with the demand-enhancement union model?

Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hiring of labor.

U.S.union membership has declined substantially in recent years.Which of the following is not usually cited as a causal factor?

The basic explanation for high real wages in the United States and other industrially advanced economies is that the

In monopsony situations, a minimum wage might increase wage and employment levels.

Marginal revenue product (MRP) of labor refers to the

Suppose a powerful labor union negotiates a wage for its members above the equilibrium wage rate in a nonunionized market.A likely result of this is that

The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

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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