Question 1

In order to hire additional laborers, a monopsony must

Accepted Answer

A)  lower the supply of labor. 
B)  raise the wage rate. 
C)  advertise for the labor. 
D)  do nothing. 
A)  lower the supply of labor. 
B)  raise the wage rate. 
C)  advertise for the labor. 
D)  do nothing.

Question 2

-Consider the above figure, which displays the situation faced by a union employed by a firm with the labor demand curve D. This union has total membership of Q3 workers, but its single wage setting goal is to maximize wages for the Q1 members with the most seniority. If the union managers accomplish this goal, what occurs?

Accepted Answer

A)  All of the union members will be employed at the wage rate W3. 
B)  All of the union members will be employed at the wage rate W1. 
C)  The senior members of the union will receive a wage equal to W3, but Q3 union members will be unemployed. 
D)  The select group of senior union members will have work and receive a wage of W3, but Q3 -Q1 union members will not be employed by the firm. 
A)  All of the union members will be employed at the wage rate W3. 
B)  All of the union members will be employed at the wage rate W1. 
C)  The senior members of the union will receive a wage equal to W3, but Q3 union members will be unemployed. 
D)  The select group of senior union members will have work and receive a wage of W3, but Q3 -Q1 union members will not be employed by the firm.

Question 3

A right-to-work law is

Accepted Answer

A)  a federal law making the closed shop illegal. 
B)  a federal law making the union shop illegal. 
C)  a state law making the union shop illegal. 
D)  a state law making the open shop illegal. 
A)  a federal law making the closed shop illegal. 
B)  a federal law making the union shop illegal. 
C)  a state law making the union shop illegal. 
D)  a state law making the open shop illegal.

Question 4

Under monopsony, the marginal factor cost of a worker is equal to

Accepted Answer

A)  the additional worker's wage rate only. 
B)  the additional worker's wage rate plus the increase in the wages of all other existing workers. 
C)  the increase in the wages of all other existing workers. 
D)  the difference between the worker's wage rate and the lower wage rate received by workers who have already been hired. 
A)  the additional worker's wage rate only. 
B)  the additional worker's wage rate plus the increase in the wages of all other existing workers. 
C)  the increase in the wages of all other existing workers. 
D)  the difference between the worker's wage rate and the lower wage rate received by workers who have already been hired.

Question 5

Suppose a union successfully negotiates a wage rate for its members that is above the competitive wage rate, then

Accepted Answer

A)  employment in the union sector will increase. 
B)  the union must find a way to make union workers more productive. 
C)  the union must also negotiate a fringe-benefit package that the membership will like. 
D)  the union must find a way to ration jobs among the excessive number of workers who wish to work at the negotiated wage. 
A)  employment in the union sector will increase. 
B)  the union must find a way to make union workers more productive. 
C)  the union must also negotiate a fringe-benefit package that the membership will like. 
D)  the union must find a way to ration jobs among the excessive number of workers who wish to work at the negotiated wage.

Question 6

Suppose that under its collective bargaining agreement the XYZ Corp. can hire nonunion workers, but these workers must join the union within 60 days. This agreement is an example of

Accepted Answer

A)  an open shop. 
B)  a closed shop. 
C)  a company union. 
D)  a union shop. 
A)  an open shop. 
B)  a closed shop. 
C)  a company union. 
D)  a union shop.

Question 7

Which of the following best describes the effects of unions in the United States today?

Accepted Answer

A)  The average union worker works more hours but earns a lower annual income than the average nonunion worker. 
B)  The average union worker works fewer hours but earns a higher annual income than the average nonunion worker. 
C)  The average union worker works more hours and earns a higher annual income than the average nonunion worker. 
D)  The average union worker works fewer hours and earns a lower annual income than the average nonunion worker. 
A)  The average union worker works more hours but earns a lower annual income than the average nonunion worker. 
B)  The average union worker works fewer hours but earns a higher annual income than the average nonunion worker. 
C)  The average union worker works more hours and earns a higher annual income than the average nonunion worker. 
D)  The average union worker works fewer hours and earns a lower annual income than the average nonunion worker.

Question 8

The National Labor Relations Act (Wagner Act)

Accepted Answer

A)  prohibited the creation of company unions. 
B)  guaranteed workers the right to organize. 
C)  set the minimum wage at $5.15 an hour. 
D)  set the length of the workweek at 40 hours. 
A)  prohibited the creation of company unions. 
B)  guaranteed workers the right to organize. 
C)  set the minimum wage at $5.15 an hour. 
D)  set the length of the workweek at 40 hours.

Question 9

Which is NOT one of the potential benefits of labor unions?

Accepted Answer

A)  Unionism raises social efficiency. 
B)  Unions appear to reduce wage inequality. 
C)  Unions may reduce a company's profits. 
D)  Unions may have contributed to safer working conditions. 
A)  Unionism raises social efficiency. 
B)  Unions appear to reduce wage inequality. 
C)  Unions may reduce a company's profits. 
D)  Unions may have contributed to safer working conditions.

Question 10

The United Steelworkers is an example of a(n)

Accepted Answer

A)  craft union. 
B)  industrial union. 
C)  public-sector union. 
D)  guild. 
A)  craft union. 
B)  industrial union. 
C)  public-sector union. 
D)  guild.

Question 11

Which of the following type of shops is unlawful under the provisions of the Taft-Hartley Act?

Accepted Answer

A)  union shops 
B)  closed shops 
C)  modified union shops 
D)  open shops 
A)  union shops 
B)  closed shops 
C)  modified union shops 
D)  open shops

Question 12

A monopsonistic employer will pay a wage rate

Accepted Answer

A)  less than the labor's MRP. 
B)  greater than the labor's MRP. 
C)  equal to the labor's MRP. 
D)  equal to MFC. 
A)  less than the labor's MRP. 
B)  greater than the labor's MRP. 
C)  equal to the labor's MRP. 
D)  equal to MFC.

Question 13

-Use the above table. The MFC of the 3rd worker is

Accepted Answer

A)  $5. 
B)  $30. 
C)  $20. 
D)  $6.7. 
A)  $5. 
B)  $30. 
C)  $20. 
D)  $6.7.

Question 14

The Taft-Hartley Act outlawed all of the following practices EXCEPT

Accepted Answer

A)  secondary boycotts. 
B)  union shops. 
C)  closed shops. 
D)  sympathy strikes. 
A)  secondary boycotts. 
B)  union shops. 
C)  closed shops. 
D)  sympathy strikes.

Question 15

If a union establishes by collective bargaining a wage rate that is above a competitive market equilibrium wage rate, then

Accepted Answer

A)  an excess quantity of labor will be supplied. 
B)  a shortage of labor will result. 
C)  there will be an increase in total employment. 
D)  management will want to substitute labor for machinery. 
A)  an excess quantity of labor will be supplied. 
B)  a shortage of labor will result. 
C)  there will be an increase in total employment. 
D)  management will want to substitute labor for machinery.

Question 16

Currently about what percentage of the civilian labor force is unionized in the United States?

Accepted Answer

A)  6 percent 
B)  12 percent 
C)  30 percent 
D)  70 percent 
A)  6 percent 
B)  12 percent 
C)  30 percent 
D)  70 percent

Question 17

Which statement is most TRUE about the impact of unions on wage levels in the Untied States?

Accepted Answer

A)  Unions have had no impact on the wage levels of their workers. 
B)  Unions have tended to increase the hourly wage rates of their members relative to nonunion workers by an average of about $2.25. 
C)  Unions have contributed to increased income inequality in the United States by raising corporate profits. 
D)  The union/nonunion wage differential tends to decrease during a recession. 
A)  Unions have had no impact on the wage levels of their workers. 
B)  Unions have tended to increase the hourly wage rates of their members relative to nonunion workers by an average of about $2.25. 
C)  Unions have contributed to increased income inequality in the United States by raising corporate profits. 
D)  The union/nonunion wage differential tends to decrease during a recession.

Question 18

Economists argue that the union wage advantage

Accepted Answer

A)  has been estimated to be 100% in the private sector. 
B)  in the private sector is a 4% increase in wages for union workers over nonunion workers. 
C)  reached its height in 2000 in the private sector. 
D)  has been close to zero since World War II in the private sector. 
A)  has been estimated to be 100% in the private sector. 
B)  in the private sector is a 4% increase in wages for union workers over nonunion workers. 
C)  reached its height in 2000 in the private sector. 
D)  has been close to zero since World War II in the private sector.

Question 19

-From the information in the above table, calculate the marginal factor cost of the third worker.

Accepted Answer

A)  $24.00 
B)  $36.00 
C)  $18.00 
D)  $12.00 
A)  $24.00 
B)  $36.00 
C)  $18.00 
D)  $12.00

Question 20

-In the above figure, what is the wage rate for the perfectly competitive market?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Exam 29: Unions and Labor Market Monopoly Power

In order to hire additional laborers, a monopsony must

A right-to-work law is

Under monopsony, the marginal factor cost of a worker is equal to

Suppose a union successfully negotiates a wage rate for its members that is above the competitive wage rate, then

Suppose that under its collective bargaining agreement the XYZ Corp. can hire nonunion workers, but these workers must join the union within 60 days. This agreement is an example of

Which of the following best describes the effects of unions in the United States today?

The National Labor Relations Act (Wagner Act)

Which is NOT one of the potential benefits of labor unions?

The United Steelworkers is an example of a(n)

Which of the following type of shops is unlawful under the provisions of the Taft-Hartley Act?

A monopsonistic employer will pay a wage rate

-Use the above table. The MFC of the 3rd worker is

The Taft-Hartley Act outlawed all of the following practices EXCEPT

If a union establishes by collective bargaining a wage rate that is above a competitive market equilibrium wage rate, then

Currently about what percentage of the civilian labor force is unionized in the United States?

Which statement is most TRUE about the impact of unions on wage levels in the Untied States?

Economists argue that the union wage advantage

-From the information in the above table, calculate the marginal factor cost of the third worker.

-In the above figure, what is the wage rate for the perfectly competitive market?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

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The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

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Money, Banking, and Central Banking

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Stabilization in an Integrated World Economy

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Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

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