Question 1

Which of the following is FALSE regarding bilateral monopoly?

Accepted Answer

A)  Bilateral monopoly is a market structure consisting of a monopolist and a monopsonist. 
B)  Bilateral monopoly is defined as a market structure in which a single buyer faces a single seller. 
C)  An example of bilateral monopoly is a state education employer facing a single teachers' union in the labor market. 
D)  The price outcome is easily determined. 
A)  Bilateral monopoly is a market structure consisting of a monopolist and a monopsonist. 
B)  Bilateral monopoly is defined as a market structure in which a single buyer faces a single seller. 
C)  An example of bilateral monopoly is a state education employer facing a single teachers' union in the labor market. 
D)  The price outcome is easily determined.

Question 2

Collective bargaining refers to

Accepted Answer

A)  negotiations between workers and health officials. 
B)  negotiations between management of a company and a labor union. 
C)  farming methods in Marxist states. 
D)  the process of electing union leaders. 
A)  negotiations between workers and health officials. 
B)  negotiations between management of a company and a labor union. 
C)  farming methods in Marxist states. 
D)  the process of electing union leaders.

Question 3

The earliest unions in the United States were

Accepted Answer

A)  industrial unions. 
B)  craft unions. 
C)  public-sector unions. 
D)  military unions. 
A)  industrial unions. 
B)  craft unions. 
C)  public-sector unions. 
D)  military unions.

Question 4

Unions can ration the excess supply of labor generated by the establishment of a wage that is above the competitive wage by

Accepted Answer

A)  lengthening the time period for apprenticeship programs. 
B)  lowering union dues. 
C)  encouraging older workers to take early retirement. 
D)  having more intensive membership drives to ensure a larger proportion of workers are covered by the union contract. 
A)  lengthening the time period for apprenticeship programs. 
B)  lowering union dues. 
C)  encouraging older workers to take early retirement. 
D)  having more intensive membership drives to ensure a larger proportion of workers are covered by the union contract.

Question 5

-In the above table, if the marginal revenue product is $18, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?

Accepted Answer

A)  5; $18 
B)  3; $14 
C)  3; $18 
D)  4; $16 
A)  5; $18 
B)  3; $14 
C)  3; $18 
D)  4; $16

Question 6

The supply curve of labor to a monopsonist is

Accepted Answer

A)  upward sloping. 
B)  downward sloping because of the law of diminishing marginal returns. 
C)  downward sloping, but not because of the law of diminishing marginal returns. 
D)  horizontal. 
A)  upward sloping. 
B)  downward sloping because of the law of diminishing marginal returns. 
C)  downward sloping, but not because of the law of diminishing marginal returns. 
D)  horizontal.

Question 7

-Refer to the above table. If the marginal revenue product is $21, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?

Accepted Answer

A)  1; $17 
B)  2; $19 
C)  2; $21 
D)  3; $21 
A)  1; $17 
B)  2; $19 
C)  2; $21 
D)  3; $21

Question 8

When workers boycott a company because it does business with a firm whose employees are on strike, that is a

Accepted Answer

A)  secondary boycott. 
B)  primary boycott. 
C)  strike. 
D)  sympathy strike. 
A)  secondary boycott. 
B)  primary boycott. 
C)  strike. 
D)  sympathy strike.

Question 9

If a union succeeds in increasing the wage rate by restricting labor supply, then

Accepted Answer

A)  all of its members will be better off. 
B)  some members may lose their jobs. 
C)  all of its members will be worse off. 
D)  more of its members will be employed. 
A)  all of its members will be better off. 
B)  some members may lose their jobs. 
C)  all of its members will be worse off. 
D)  more of its members will be employed.

Question 10

-Use the above table. If the marginal revenue product is $10, how many workers will the profit maximizing monopsonist hire?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 11

The figure supports all of the following statements regarding the marginal factor cost curve for a monopsonist EXCEPT

Accepted Answer

A)  the monopsonist firm looks at a marginal cost curve, MFC, which slopes upward and is above its labor supply curve. 
B)  the marginal benefit of hiring additional workers is given by the firm's MRP curve. 
C)  the intersection of MFC with MRP, at point E, determines the number of workers hired. 
D)  a monopsonist cannot find the profit-maximizing quantity of labor demanded at E. 
A)  the monopsonist firm looks at a marginal cost curve, MFC, which slopes upward and is above its labor supply curve. 
B)  the marginal benefit of hiring additional workers is given by the firm's MRP curve. 
C)  the intersection of MFC with MRP, at point E, determines the number of workers hired. 
D)  a monopsonist cannot find the profit-maximizing quantity of labor demanded at E.

Question 12

Since the 1960s, the share of the labor force that is unionized in the United States has

Accepted Answer

A)  increased except for the government sector. 
B)  increased. 
C)  declined. 
D)  declined except in the private sector. 
A)  increased except for the government sector. 
B)  increased. 
C)  declined. 
D)  declined except in the private sector.

Question 13

In the United States the differential between union and non-union wages

Accepted Answer

A)  does not exist. 
B)  currently averages about 50-60 percent. 
C)  has been narrowing. 
D)  tends to fall during a recession because union members typically have shorter-term contracts than do nonunion employees. 
A)  does not exist. 
B)  currently averages about 50-60 percent. 
C)  has been narrowing. 
D)  tends to fall during a recession because union members typically have shorter-term contracts than do nonunion employees.

Question 14

A bilateral monopoly means

Accepted Answer

A)  that a monopsonistic employer bargains with two unions. 
B)  that a monopsonistic employer bargains with both an industrial and a craft union. 
C)  that a monopsonistic employer bargains with a monopoly. 
D)  that an industrial union bargains with a two-firm oligopoly. 
A)  that a monopsonistic employer bargains with two unions. 
B)  that a monopsonistic employer bargains with both an industrial and a craft union. 
C)  that a monopsonistic employer bargains with a monopoly. 
D)  that an industrial union bargains with a two-firm oligopoly.

Question 15

-Look at the above figure. A union wishes to maximize wage income for employed union members, so it should aim for a wage rate ________ and a number of employed members equal to

Accepted Answer

A)  W1, Q3 
B)  W2, Q2 
C)  W3, Q1 
D)  W4, Q3 
A)  W1, Q3 
B)  W2, Q2 
C)  W3, Q1 
D)  W4, Q3

Question 16

A labor union that consists of workers from a particular industry is a(n)

Accepted Answer

A)  closed shop. 
B)  industrial union. 
C)  union shop. 
D)  bilateral monopoly. 
A)  closed shop. 
B)  industrial union. 
C)  union shop. 
D)  bilateral monopoly.

Question 17

-Refer to the above figure. The wage rate under perfect competition is

Accepted Answer

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

Question 18

What is the purpose of a strike? What are the costs to workers and to management?

Accepted Answer

The purpose of a strike is to impose cos

Question 19

The ultimate bargaining tool for unions is

Accepted Answer

A)  the strike. 
B)  "labor's Magna Carta." 
C)  the Taft-Hartley Act. 
D)  the sympathy strike. 
A)  the strike. 
B)  "labor's Magna Carta." 
C)  the Taft-Hartley Act. 
D)  the sympathy strike.

Question 20

The type of labor agreement that requires workers to be union members prior to being considered for employment is a

Accepted Answer

A)  right-to-work agreement. 
B)  closed-shop agreement. 
C)  union shop agreement. 
D)  open-shop agreement. 
A)  right-to-work agreement. 
B)  closed-shop agreement. 
C)  union shop agreement. 
D)  open-shop agreement.

Exam 29: Unions and Labor Market Monopoly Power

Which of the following is FALSE regarding bilateral monopoly?

Collective bargaining refers to

The earliest unions in the United States were

Unions can ration the excess supply of labor generated by the establishment of a wage that is above the competitive wage by

-In the above table, if the marginal revenue product is $18, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?

The supply curve of labor to a monopsonist is

-Refer to the above table. If the marginal revenue product is $21, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?

When workers boycott a company because it does business with a firm whose employees are on strike, that is a

If a union succeeds in increasing the wage rate by restricting labor supply, then

-Use the above table. If the marginal revenue product is $10, how many workers will the profit maximizing monopsonist hire?

The figure supports all of the following statements regarding the marginal factor cost curve for a monopsonist EXCEPT

Since the 1960s, the share of the labor force that is unionized in the United States has

In the United States the differential between union and non-union wages

A bilateral monopoly means

-Look at the above figure. A union wishes to maximize wage income for employed union members, so it should aim for a wage rate ________ and a number of employed members equal to

A labor union that consists of workers from a particular industry is a(n)

-Refer to the above figure. The wage rate under perfect competition is

What is the purpose of a strike? What are the costs to workers and to management?

The ultimate bargaining tool for unions is

The type of labor agreement that requires workers to be union members prior to being considered for employment is a

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