Question 1

-According to the above table, if the marginal revenue product is $48, how many workers will the profit maximizing monopsonist hire?

Accepted Answer

A)  5 
B)  6 
C)  7 
D)  8 
A)  5 
B)  6 
C)  7 
D)  8

Question 2

Which of the following is NOT one of the reasons for declining union membership in the United States?

Accepted Answer

A)  The economy has shifted away from manufacturing. 
B)  The AFL-CIO merger and creation of the Change to Win Federation reduced competition among unions. 
C)  Some industries have been deregulated. 
D)  Labor force participation by women has increased. 
A)  The economy has shifted away from manufacturing. 
B)  The AFL-CIO merger and creation of the Change to Win Federation reduced competition among unions. 
C)  Some industries have been deregulated. 
D)  Labor force participation by women has increased.

Question 3

The Wagner Act

Accepted Answer

A)  permitted unions to engage in collective bargaining. 
B)  permitted states to pass right-to-work laws. 
C)  restricted activities of heads of unions that were not beneficial to union members. 
D)  mandates compulsory arbitration in some key industries. 
A)  permitted unions to engage in collective bargaining. 
B)  permitted states to pass right-to-work laws. 
C)  restricted activities of heads of unions that were not beneficial to union members. 
D)  mandates compulsory arbitration in some key industries.

Question 4

The U.S. labor movement started with

Accepted Answer

A)  aerospace workers unions. 
B)  industrial unions. 
C)  craft unions. 
D)  depression unions. 
A)  aerospace workers unions. 
B)  industrial unions. 
C)  craft unions. 
D)  depression unions.

Question 5

Which statement best describes the behavior of the monopsonist in the labor market?

Accepted Answer

A)  It restricts its output to keep the product price high. 
B)  It hires less labor but pays the perfectly competitive wage rate. 
C)  It must pay different amounts to each unit of labor hired. 
D)  It hires less labor and pays a lower wage rate than in the perfectly competitive case. 
A)  It restricts its output to keep the product price high. 
B)  It hires less labor but pays the perfectly competitive wage rate. 
C)  It must pay different amounts to each unit of labor hired. 
D)  It hires less labor and pays a lower wage rate than in the perfectly competitive case.

Question 6

The Taft-Hartley Act of 1947 made

Accepted Answer

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

Question 7

Using a graph, compare the labor-market equilibrium under perfect competition and monopsony. Explain.

Accepted Answer

@#IMG-DLM& Refer to the above figure. Under perfec

Question 8

-In the above figure, what is the quantity of workers that would be hired by a monopsonist?

Accepted Answer

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

Question 9

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

Accepted Answer

A)  there will be downward pressure on the wage rate until equilibrium is established. 
B)  right-to-work laws become effective. 
C)  there is a shortage of jobs. 
D)  there is excess demand for labor. 
A)  there will be downward pressure on the wage rate until equilibrium is established. 
B)  right-to-work laws become effective. 
C)  there is a shortage of jobs. 
D)  there is excess demand for labor.

Question 10

If a union is successful in negotiating a wage rate which is above the market clearing wage, then which of the following would not occur?

Accepted Answer

A)  The higher wages attract more workers leading to a shortage of jobs. 
B)  Management may replace part of the workforce with machinery. 
C)  To handle the surplus of labor the union will form a closed shop. 
D)  The union may shift the supply of labor curve by developing methods to ration jobs. 
A)  The higher wages attract more workers leading to a shortage of jobs. 
B)  Management may replace part of the workforce with machinery. 
C)  To handle the surplus of labor the union will form a closed shop. 
D)  The union may shift the supply of labor curve by developing methods to ration jobs.

Question 11

Workers in the United States were granted the legal right to engage in collective bargaining by the

Accepted Answer

A)  National Labor Relations Act. 
B)  Taft-Hartley Act. 
C)  Landrum-Griffin Act. 
D)  Knights of Labor Act. 
A)  National Labor Relations Act. 
B)  Taft-Hartley Act. 
C)  Landrum-Griffin Act. 
D)  Knights of Labor Act.

Question 12

A situation in which a worker can be hired without being in a union but has to join a union after a specified period of time is a

Accepted Answer

A)  closed shop. 
B)  union shop. 
C)  open shop. 
D)  restricted shop. 
A)  closed shop. 
B)  union shop. 
C)  open shop. 
D)  restricted shop.

Question 13

The United Auto Worker (UAW) would best be classified as

Accepted Answer

A)  a craft union. 
B)  an industrial union. 
C)  a guild. 
D)  closed shop union. 
E)  none of the above 
A)  a craft union. 
B)  an industrial union. 
C)  a guild. 
D)  closed shop union. 
E)  none of the above

Question 14

If a firm is a union shop, then

Accepted Answer

A)  a worker may elect to either join or not join the union. 
B)  only workers who have been union members for two years may be employed. 
C)  only union members may be employed by the firm. 
D)  a non-union worker may be hired but must join the union within a certain time period. 
A)  a worker may elect to either join or not join the union. 
B)  only workers who have been union members for two years may be employed. 
C)  only union members may be employed by the firm. 
D)  a non-union worker may be hired but must join the union within a certain time period.

Question 15

A monopsonist finds its profit maximizing quantity of labor employed at the point at which

Accepted Answer

A)  marginal revenue product is zero. 
B)  marginal revenue product equals marginal factor cost. 
C)  marginal factor cost is zero. 
D)  total cost equals total revenue. 
A)  marginal revenue product is zero. 
B)  marginal revenue product equals marginal factor cost. 
C)  marginal factor cost is zero. 
D)  total cost equals total revenue.

Question 16

A plumbers' union is an example of

Accepted Answer

A)  an industrial union. 
B)  a craft union. 
C)  skilled workers union. 
D)  auxiliary union. 
A)  an industrial union. 
B)  a craft union. 
C)  skilled workers union. 
D)  auxiliary union.

Question 17

What is a monopsony and how does a monopsonistic firm determine the wage rate to pay its employees?

Accepted Answer

Monopsony is the situation when there is

Question 18

A craft labor union is made up of

Accepted Answer

A)  groups of workers in an individual trade. 
B)  all the workers in a firm such as General Motors. 
C)  firms that employ similar labor skills. 
D)  an organization that controls the labor market in a particular industry. 
A)  groups of workers in an individual trade. 
B)  all the workers in a firm such as General Motors. 
C)  firms that employ similar labor skills. 
D)  an organization that controls the labor market in a particular industry.

Question 19

-Use the above table. If the marginal revenue product is $30, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?

Accepted Answer

A)  1; $10 
B)  2; $15 
C)  3; $20 
D)  4; $25 
A)  1; $10 
B)  2; $15 
C)  3; $20 
D)  4; $25

Question 20

All of the following are true regarding the current status of labor unions EXCEPT

Accepted Answer

A)  organized labor's heyday occurred from the 1940s through the 1970s. 
B)  part of the explanation for the decline in union membership has to do with the shift away from manufacturing. 
C)  the deregulation of certain industries has also contributed to a decline in unionism. 
D)  recent labor laws have diminished worker's rights. 
A)  organized labor's heyday occurred from the 1940s through the 1970s. 
B)  part of the explanation for the decline in union membership has to do with the shift away from manufacturing. 
C)  the deregulation of certain industries has also contributed to a decline in unionism. 
D)  recent labor laws have diminished worker's rights.

Exam 29: Unions and Labor Market Monopoly Power

-According to the above table, if the marginal revenue product is $48, how many workers will the profit maximizing monopsonist hire?

Which of the following is NOT one of the reasons for declining union membership in the United States?

The Wagner Act

The U.S. labor movement started with

Which statement best describes the behavior of the monopsonist in the labor market?

The Taft-Hartley Act of 1947 made

Using a graph, compare the labor-market equilibrium under perfect competition and monopsony. Explain.

-In the above figure, what is the quantity of workers that would be hired by a monopsonist?

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

If a union is successful in negotiating a wage rate which is above the market clearing wage, then which of the following would not occur?

Workers in the United States were granted the legal right to engage in collective bargaining by the

A situation in which a worker can be hired without being in a union but has to join a union after a specified period of time is a

The United Auto Worker (UAW) would best be classified as

If a firm is a union shop, then

A monopsonist finds its profit maximizing quantity of labor employed at the point at which

A plumbers' union is an example of

What is a monopsony and how does a monopsonistic firm determine the wage rate to pay its employees?

A craft labor union is made up of

-Use the above table. If the marginal revenue product is $30, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?

All of the following are true regarding the current status of labor unions EXCEPT

The Nature of Economics

Scarcity and the World of Trade-Offs

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The Macroeconomy: Unemployment, Inflation, and Deflation

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