Question 1

A bilateral monopoly is a situation where a firm is

Accepted Answer

A)  a monopoly in its product market and is a monopsony in its labor market. 
B)  the only employer of a resource and is acquiring that resource from a single supplier. 
C)  one of only two firms that produce a particular product. 
D)  the only buyer of a resource and also the only seller of a product. 
A)  a monopoly in its product market and is a monopsony in its labor market. 
B)  the only employer of a resource and is acquiring that resource from a single supplier. 
C)  one of only two firms that produce a particular product. 
D)  the only buyer of a resource and also the only seller of a product. B

Question 2

When workers unionize, they

Accepted Answer

A)  compete with one another in selling their services. 
B)  make individual wage negotiations with the company. 
C)  become employees of the union, rather than the company. 
D)  sell their labor services collectively. 
A)  compete with one another in selling their services. 
B)  make individual wage negotiations with the company. 
C)  become employees of the union, rather than the company. 
D)  sell their labor services collectively. D

Question 3

According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because

Accepted Answer

A)  the demand for minimum-wage labor is highly elastic. 
B)  it reduces turnover among minimum-wage workers, prompts employers to use them more efficiently, and thus raises their average productivity. 
C)  it encourages teenagers to stay in school. 
D)  employers substitute lower fringe benefits for higher pay, keeping their compensation costs the same. 
A)  the demand for minimum-wage labor is highly elastic. 
B)  it reduces turnover among minimum-wage workers, prompts employers to use them more efficiently, and thus raises their average productivity. 
C)  it encourages teenagers to stay in school. 
D)  employers substitute lower fringe benefits for higher pay, keeping their compensation costs the same. B

Question 4

Occupational licensing

Accepted Answer

A)  functions essentially the same as inclusive unionism. 
B)  attracts large numbers of workers and therefore depresses wages. 
C)  often restricts occupational entry and raises the incomes of license holders. 
D)  has been declared illegal in the majority of states. 
A)  functions essentially the same as inclusive unionism. 
B)  attracts large numbers of workers and therefore depresses wages. 
C)  often restricts occupational entry and raises the incomes of license holders. 
D)  has been declared illegal in the majority of states.

Question 5

In which of the following U.S. industries is the rate of unionization the highest?

Accepted Answer

A)  construction 
B)  government 
C)  transportation 
D)  agriculture 
A)  construction 
B)  government 
C)  transportation 
D)  agriculture

Question 6

A firm finds that it must increase wages to attract extra workers. The firm will hire labor up to the point where the marginal

Accepted Answer

A)  product of labor equals the wage rate. 
B)  revenue product of labor is greater than the wage rate. 
C)  revenue product of labor starts to decline. 
D)  revenue product equals the additional cost of hiring an extra worker. 
A)  product of labor equals the wage rate. 
B)  revenue product of labor is greater than the wage rate. 
C)  revenue product of labor starts to decline. 
D)  revenue product equals the additional cost of hiring an extra worker.

Question 7

According to international comparisons, which nation had the highest hourly pay in U.S. dollar terms in 2013?

Accepted Answer

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

Question 8

In the United States,

Accepted Answer

A)  whites have higher unionization rates than African Americans. 
B)  men have higher unionization rates than women. 
C)  managers have higher unionization rates than transportation workers. 
D)  workers in mining have higher unionization rates than workers in government. 
A)  whites have higher unionization rates than African Americans. 
B)  men have higher unionization rates than women. 
C)  managers have higher unionization rates than transportation workers. 
D)  workers in mining have higher unionization rates than workers in government.

Question 9

The profit-maximizing rule for a firm hiring both labor (L) and capital (C) under conditions of imperfect competition is

Accepted Answer

A)  $\mathrm { MP } _ { L } / \mathrm { P } _ { L } = \mathrm { MP } C / \mathrm { P } C$ 
B) $\mathrm{MP}_{L} / \mathrm{MP}_{C}=\mathrm{MRC}_{C} / \mathrm{MRP}_{L}$ 
C)  $\mathrm{MRP} L / \mathrm{MRC} L=\mathrm{MRP} C / \mathrm{MRC} C=1 .$ 
D)  $\mathrm { MRC } _ { L } / \mathrm { MP } _ { L } = \mathrm { MRC } _ { C } / \mathrm { MP } _ { C } = 1$ 
A)  $\mathrm { MP } _ { L } / \mathrm { P } _ { L } = \mathrm { MP } C / \mathrm { P } C$ 
B) $\mathrm{MP}_{L} / \mathrm{MP}_{C}=\mathrm{MRC}_{C} / \mathrm{MRP}_{L}$ 
C)  $\mathrm{MRP} L / \mathrm{MRC} L=\mathrm{MRP} C / \mathrm{MRC} C=1 .$ 
D)  $\mathrm { MRC } _ { L } / \mathrm { MP } _ { L } = \mathrm { MRC } _ { C } / \mathrm { MP } _ { C } = 1$

Question 10

The idea of efficiency wages is that

Accepted Answer

A)  the wages of each type of labor must be proportionate to their marginal products. 
B)  the wages of each type of labor must be equal to their marginal products. 
C)  firms might get greater work effort by paying above-equilibrium wage rates. 
D)  workers are more diligent when paid below-equilibrium wages. 
A)  the wages of each type of labor must be proportionate to their marginal products. 
B)  the wages of each type of labor must be equal to their marginal products. 
C)  firms might get greater work effort by paying above-equilibrium wage rates. 
D)  workers are more diligent when paid below-equilibrium wages.

Question 11

(Consider This) Which of the following statements is true about the relationship between take-home pay and fringe benefits for U.S. middle-class workers over the past several decades?

Accepted Answer

A)  The ratio of take-home pay to fringe benefits has remained relatively constant. 
B)  The ratio of take-home pay to fringe benefits has risen significantly. 
C)  The ratio of take-home pay to fringe benefits has fallen significantly. 
D)  Both have declined steadily. 
A)  The ratio of take-home pay to fringe benefits has remained relatively constant. 
B)  The ratio of take-home pay to fringe benefits has risen significantly. 
C)  The ratio of take-home pay to fringe benefits has fallen significantly. 
D)  Both have declined steadily.

Question 12

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 13

Taking unauthorized work breaks would be an example of

Accepted Answer

A)  compensating differences. 
B)  noncompeting groups. 
C)  piece-rate incentives. 
D)  shirking. 
A)  compensating differences. 
B)  noncompeting groups. 
C)  piece-rate incentives. 
D)  shirking.

Question 14

Unions prefer

Accepted Answer

A)  open shops to agency shops. 
B)  agency shops to closed shops. 
C)  agency shops to union shops. 
D)  union shops to agency shops. 
A)  open shops to agency shops. 
B)  agency shops to closed shops. 
C)  agency shops to union shops. 
D)  union shops to agency shops.

Question 15

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 16

Seven of the 50 states account for approximately half of all union members in the United States.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Who is the most likely to be a union member in the United States?

Accepted Answer

A)  a female retail trade worker 
B)  a male transportation worker 
C)  an African American manager 
D)  a white agricultural worker 
A)  a female retail trade worker 
B)  a male transportation worker 
C)  an African American manager 
D)  a white agricultural worker

Question 19

"Player drafts" of professional athletes

Accepted Answer

A)  increase the competitiveness of the labor market for professional athletes. 
B)  reduce the profitability of professional sports franchises. 
C)  promote monopsony in the hiring of professional athletes. 
D)  increase salaries of professional athletes. 
A)  increase the competitiveness of the labor market for professional athletes. 
B)  reduce the profitability of professional sports franchises. 
C)  promote monopsony in the hiring of professional athletes. 
D)  increase salaries of professional athletes.

Question 20

Pay plans that are designed to elicit a desired level of performance from workers are generally called

Accepted Answer

A)  basic wage-plus-fringe benefits plans. 
B)  annual-and-renewable salary plans. 
C)  pay for performance plans. 
D)  design-and-performance plans. 
A)  basic wage-plus-fringe benefits plans. 
B)  annual-and-renewable salary plans. 
C)  pay for performance plans. 
D)  design-and-performance plans.

Exam 17: Wage Determination

A bilateral monopoly is a situation where a firm is

When workers unionize, they

According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because

Occupational licensing

In which of the following U.S. industries is the rate of unionization the highest?

A firm finds that it must increase wages to attract extra workers. The firm will hire labor up to the point where the marginal

According to international comparisons, which nation had the highest hourly pay in U.S. dollar terms in 2013?

In the United States,

The profit-maximizing rule for a firm hiring both labor (L) and capital (C) under conditions of imperfect competition is

The idea of efficiency wages is that

(Consider This) Which of the following statements is true about the relationship between take-home pay and fringe benefits for U.S. middle-class workers over the past several decades?

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

Taking unauthorized work breaks would be an example of

Unions prefer

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

Seven of the 50 states account for approximately half of all union members in the United States.

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

Who is the most likely to be a union member in the United States?

"Player drafts" of professional athletes

Pay plans that are designed to elicit a desired level of performance from workers are generally called

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

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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