Question 1

For a monopsonist, marginal factor cost exceeds the wage rate since

Accepted Answer

A)  more workers have to be paid the prevailing wage rate. 
B)  the supply of labor is perfectly elastic. 
C)  when new workers are hired the wage rate must be increased for all workers and not just for the additional workers. 
D)  the labor demand is downward sloping. 
A)  more workers have to be paid the prevailing wage rate. 
B)  the supply of labor is perfectly elastic. 
C)  when new workers are hired the wage rate must be increased for all workers and not just for the additional workers. 
D)  the labor demand is downward sloping.

Question 2

Can unions increase productivity? Explain.

Accepted Answer

Unions can increase productivity, but th

Question 3

The attempt to force employers to use more labor than they otherwise would, or to force employers to use labor inefficiently, is known as

Accepted Answer

A)  a secondary boycott. 
B)  a sympathy strike. 
C)  a monopsony. 
D)  featherbedding. 
A)  a secondary boycott. 
B)  a sympathy strike. 
C)  a monopsony. 
D)  featherbedding.

Question 4

-Refer the above figure. An increase in labor productivity is likely to stimulate and shift the labor demand curve to

Accepted Answer

A)  the right and hence increase union wages per year. 
B)  to the left and hence increase union wages per year. 
C)  the right and hence lower union wages per year. 
D)  None of the above is likely to happen. 
A)  the right and hence increase union wages per year. 
B)  to the left and hence increase union wages per year. 
C)  the right and hence lower union wages per year. 
D)  None of the above is likely to happen.

Question 5

State right-to-work laws

Accepted Answer

A)  prohibit discrimination in hiring. 
B)  force companies to submit to Equal Employment Opportunities Commission arbitration in disputes. 
C)  encourage companies to hire minorities. 
D)  make compulsory union membership illegal. 
A)  prohibit discrimination in hiring. 
B)  force companies to submit to Equal Employment Opportunities Commission arbitration in disputes. 
C)  encourage companies to hire minorities. 
D)  make compulsory union membership illegal.

Question 6

The main difference between a monopsonist and a competitive buyer of labor is that

Accepted Answer

A)  the monopsonist can hire as many workers as it wants at the going wage while the competitive firm must raise wages to hire additional workers. 
B)  the competitive firm can hire as many workers as it wants at the going wage while the monopsonist can hire more workers at lower wages. 
C)  the competitor can hire as many workers as it wants at the going wage while the monopsonist must raise wages to hire additional workers. 
D)  the monopsonist can force wages down and still hire as many workers as it wants while the competitive firm must increase the wage rate to hire additional workers. 
A)  the monopsonist can hire as many workers as it wants at the going wage while the competitive firm must raise wages to hire additional workers. 
B)  the competitive firm can hire as many workers as it wants at the going wage while the monopsonist can hire more workers at lower wages. 
C)  the competitor can hire as many workers as it wants at the going wage while the monopsonist must raise wages to hire additional workers. 
D)  the monopsonist can force wages down and still hire as many workers as it wants while the competitive firm must increase the wage rate to hire additional workers.

Question 7

Since the 1970s, union membership in the U.S. has been

Accepted Answer

A)  rising. 
B)  remaining constant. 
C)  declining. 
D)  erratic. 
A)  rising. 
B)  remaining constant. 
C)  declining. 
D)  erratic.

Question 8

A monopsony has an upward sloping supply curve because

Accepted Answer

A)  diminishing marginal product to scale does not exist in a monopsony. 
B)  each additional unit of labor costs less. 
C)  when more units of labor are hired, all laborers must receive the higher wage. 
D)  when more units of labor are hired, only the new workers receive the higher wage. 
A)  diminishing marginal product to scale does not exist in a monopsony. 
B)  each additional unit of labor costs less. 
C)  when more units of labor are hired, all laborers must receive the higher wage. 
D)  when more units of labor are hired, only the new workers receive the higher wage.

Question 9

An industrial union is

Accepted Answer

A)  a union composed of public employees. 
B)  a union composed of workers who are in a specific geographic area. 
C)  a union composed of workers who are employed in a particular industry. 
D)  a union composed of workers who engage in a particular trade or skill. 
A)  a union composed of public employees. 
B)  a union composed of workers who are in a specific geographic area. 
C)  a union composed of workers who are employed in a particular industry. 
D)  a union composed of workers who engage in a particular trade or skill.

Question 10

One method unions use to ration available jobs among excess workers is

Accepted Answer

A)  lengthy apprenticeships. 
B)  to hire only white collar workers. 
C)  collective bargaining. 
D)  refuse to unionize. 
A)  lengthy apprenticeships. 
B)  to hire only white collar workers. 
C)  collective bargaining. 
D)  refuse to unionize.

Question 11

What time period in U.S. history do we generally recognize as the peak of labor union membership?

Accepted Answer

A)  1900s-1920s 
B)  1920s-1940s 
C)  1940s-1970s 
D)  1970s-2000s 
A)  1900s-1920s 
B)  1920s-1940s 
C)  1940s-1970s 
D)  1970s-2000s

Question 12

Strikes occur in about ________ percent of the labor-management negotiations.

Accepted Answer

A)  2 
B)  16 
C)  25 
D)  40 
A)  2 
B)  16 
C)  25 
D)  40

Question 13

The employees of Ajax cookies are on strike. Jane has decided not to shop at any store that is still selling Ajax cookies. This is known as

Accepted Answer

A)  a closed shop. 
B)  a union shop. 
C)  a sympathy strike. 
D)  a secondary boycott. 
A)  a closed shop. 
B)  a union shop. 
C)  a sympathy strike. 
D)  a secondary boycott.

Question 14

A union requirement that a fireman has to be hired to work in a diesel locomotive would be an example of

Accepted Answer

A)  work expansion. 
B)  featherbedding. 
C)  work requirements. 
D)  work stabilization. 
A)  work expansion. 
B)  featherbedding. 
C)  work requirements. 
D)  work stabilization.

Question 15

The ultimate threat of a union is

Accepted Answer

A)  the lockout. 
B)  the President's power granted by the Taft-Hartley Act. 
C)  the unity of spirit of the union membership. 
D)  the strike. 
A)  the lockout. 
B)  the President's power granted by the Taft-Hartley Act. 
C)  the unity of spirit of the union membership. 
D)  the strike.

Question 16

Craft unions exert market control by

Accepted Answer

A)  limiting the demand for labor. 
B)  limiting the supply of labor. 
C)  setting minimum wages. 
D)  setting maximum wages. 
A)  limiting the demand for labor. 
B)  limiting the supply of labor. 
C)  setting minimum wages. 
D)  setting maximum wages.

Question 17

The most powerful tool unions have at their disposal when bargaining with management is

Accepted Answer

A)  the Taft-Hartley Act. 
B)  the ability to strike. 
C)  the secondary boycott. 
D)  the power of pure competition. 
A)  the Taft-Hartley Act. 
B)  the ability to strike. 
C)  the secondary boycott. 
D)  the power of pure competition.

Question 18

An example of featherbedding is

Accepted Answer

A)  advertising that encourages consumers to buy union-made goods. 
B)  union requirements that forbid the use of certain laborsaving equipment. 
C)  lobbying Congress to get higher tariffs. 
D)  the requirement that all construction workers who work on a government-financed project receive the union wage rate regardless if they are in the union or not. 
A)  advertising that encourages consumers to buy union-made goods. 
B)  union requirements that forbid the use of certain laborsaving equipment. 
C)  lobbying Congress to get higher tariffs. 
D)  the requirement that all construction workers who work on a government-financed project receive the union wage rate regardless if they are in the union or not.

Question 19

Bargaining between the management of a company and the management of a union is

Accepted Answer

A)  a closed shop. 
B)  a bilateral monopoly. 
C)  a craft union. 
D)  collective bargaining. 
A)  a closed shop. 
B)  a bilateral monopoly. 
C)  a craft union. 
D)  collective bargaining.

Question 20

Monopsonistic exploitation refers to

Accepted Answer

A)  the payment to the resource equal to MFC. 
B)  the payment to a resource less than MRP. 
C)  the payment to a resource equal to MRP. 
D)  the payment to a resource above MRP. 
A)  the payment to the resource equal to MFC. 
B)  the payment to a resource less than MRP. 
C)  the payment to a resource equal to MRP. 
D)  the payment to a resource above MRP.

Exam 29: Unions and Labor Market Monopoly Power

For a monopsonist, marginal factor cost exceeds the wage rate since

Can unions increase productivity? Explain.

The attempt to force employers to use more labor than they otherwise would, or to force employers to use labor inefficiently, is known as

-Refer the above figure. An increase in labor productivity is likely to stimulate and shift the labor demand curve to

State right-to-work laws

The main difference between a monopsonist and a competitive buyer of labor is that

Since the 1970s, union membership in the U.S. has been

A monopsony has an upward sloping supply curve because

An industrial union is

One method unions use to ration available jobs among excess workers is

What time period in U.S. history do we generally recognize as the peak of labor union membership?

Strikes occur in about ________ percent of the labor-management negotiations.

The employees of Ajax cookies are on strike. Jane has decided not to shop at any store that is still selling Ajax cookies. This is known as

A union requirement that a fireman has to be hired to work in a diesel locomotive would be an example of

The ultimate threat of a union is

Craft unions exert market control by

The most powerful tool unions have at their disposal when bargaining with management is

An example of featherbedding is

Bargaining between the management of a company and the management of a union is

Monopsonistic exploitation refers to

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

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The Firm: Cost and Output Determination

Perfect Competition

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Monopolistic Competition

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Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

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Environmental Economics

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