Question 1

The majority of union members in the United States belong to unions that are

Accepted Answer

A)  affiliated with the United Workers of America (UW
A) . 
B)  affiliated with the AFL-CIO. 
C)  independent unions that are not affiliated with the AFL-CIO. 
D)  growing rapidly in membership. 
A)  affiliated with the United Workers of America (UW
A) . 
B)  affiliated with the AFL-CIO. 
C)  independent unions that are not affiliated with the AFL-CIO. 
D)  growing rapidly in membership.

Question 2

The equilibrium wage rate in a bilateral monopoly labor market is

Accepted Answer

A)  determined by the monopoly supplier of labor. 
B)  determined solely by employers. 
C)  logically indeterminate within a certain range. 
D)  largely set by government regulators. 
A)  determined by the monopoly supplier of labor. 
B)  determined solely by employers. 
C)  logically indeterminate within a certain range. 
D)  largely set by government regulators.

Question 3

A profit-maximizing firm will

Accepted Answer

A)  expand employment if marginal revenue product equals marginal resource cost. 
B)  reduce employment if marginal revenue product equals marginal resource cost. 
C)  reduce employment if marginal revenue product is less than marginal resource cost. 
D)  expand employment if marginal revenue product is less than marginal resource cost. 
A)  expand employment if marginal revenue product equals marginal resource cost. 
B)  reduce employment if marginal revenue product equals marginal resource cost. 
C)  reduce employment if marginal revenue product is less than marginal resource cost. 
D)  expand employment if marginal revenue product is less than marginal resource cost.

Question 4

The basic explanation for high real wages in the United States and other industrially advanced economies is that the

Accepted Answer

A)  labor supply has increased more rapidly than labor demand in these nations. 
B)  labor demand has increased more rapidly than labor supply in these nations. 
C)  unemployment in these nations has remained relatively stable over the years. 
D)  inflation rate in these nations has been higher than the rate of increase in nominal wages. 
A)  labor supply has increased more rapidly than labor demand in these nations. 
B)  labor demand has increased more rapidly than labor supply in these nations. 
C)  unemployment in these nations has remained relatively stable over the years. 
D)  inflation rate in these nations has been higher than the rate of increase in nominal wages.

Question 5

Traveling sales representative Harold Hill only calls on clients four days a week rather than the five days expected by his employer. This is an example of

Accepted Answer

A)  equalizing differences. 
B)  a nonmonetary job disadvantage. 
C)  shirking. 
D)  the free-rider problem. 
A)  equalizing differences. 
B)  a nonmonetary job disadvantage. 
C)  shirking. 
D)  the free-rider problem.

Question 6

A craft union attempts to increase wage rates by

Accepted Answer

A)  equating the MRP and the MRC curves. 
B)  shifting the labor supply curve to the left. 
C)  shifting the labor supply curve to the right. 
D)  shifting the MRP curve to the right. 
A)  equating the MRP and the MRC curves. 
B)  shifting the labor supply curve to the left. 
C)  shifting the labor supply curve to the right. 
D)  shifting the MRP curve to the right.

Question 7

Noncompeting groups of workers are the result of geographic immobility.

Accepted Answer

A) True 
 B)False

Question 8

Union membership among workers in America has been declining since the 1950s.

Accepted Answer

A) True 
 B)False

Question 9

A monopsonistic employer's marginal resource (labor) cost curve

Accepted Answer

A)  is always more elastic than the labor supply curve. 
B)  coincides with the labor supply curve. 
C)  lies below the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers. 
D)  lies above the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers. 
A)  is always more elastic than the labor supply curve. 
B)  coincides with the labor supply curve. 
C)  lies below the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers. 
D)  lies above the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers.

Question 10

Discrimination that results in minorities being paid less than whites for identical work would be an example of which explanation for wage differentials?

Accepted Answer

A)  noncompeting groups 
B)  compensating differences 
C)  market imperfections 
D)  principal-agent problems 
A)  noncompeting groups 
B)  compensating differences 
C)  market imperfections 
D)  principal-agent problems

Question 11

For the firm, the major goal of profit sharing plans is to

Accepted Answer

A)  force workers to incur some of the business risk. 
B)  overcome the monopsony problem of having to pay higher wages to attract additional workers. 
C)  overcome the principal-agent problem by better aligning the workers' interests with those of the firm. 
D)  reduce total compensation payments. 
A)  force workers to incur some of the business risk. 
B)  overcome the monopsony problem of having to pay higher wages to attract additional workers. 
C)  overcome the principal-agent problem by better aligning the workers' interests with those of the firm. 
D)  reduce total compensation payments.

Question 12

Real wages in the United States are

Accepted Answer

A)  the highest in the world. 
B)  relatively high, but not as high as in some other industrially advanced nations. 
C)  much higher than output per worker. 
D)  higher than nominal wages. 
A)  the highest in the world. 
B)  relatively high, but not as high as in some other industrially advanced nations. 
C)  much higher than output per worker. 
D)  higher than nominal wages.

Question 13

In 2015, approximately 5 percent of all work time lost was due to work stoppages.

Accepted Answer

A) True 
 B)False

Question 14

Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hiring of labor.

Accepted Answer

A) True 
 B)False

Question 15

Critics of minimum-wage legislation argue that it

Accepted Answer

A)  keeps inefficient producers in business. 
B)  reduces employment. 
C)  undermines incentives to work. 
D)  is deflationary. 
A)  keeps inefficient producers in business. 
B)  reduces employment. 
C)  undermines incentives to work. 
D)  is deflationary.

Question 16

The principal-agent problem, as applied to the management of a company, would have the

Accepted Answer

A)  stockholders as the agents and the managers as the principals. 
B)  company as the principal and the customer as the agent. 
C)  stockholders as the principals and the managers as the agents. 
D)  customer as the principal and the company as the agent. 
A)  stockholders as the agents and the managers as the principals. 
B)  company as the principal and the customer as the agent. 
C)  stockholders as the principals and the managers as the agents. 
D)  customer as the principal and the company as the agent.

Question 17

Geographic immobility in the labor force results in

Accepted Answer

A)  homogeneous wage rates. 
B)  homogeneous unemployment rates. 
C)  local labor markets which reach equilibrium quickly and efficiently. 
D)  persistent wage and unemployment differentials among different regions of the country. 
A)  homogeneous wage rates. 
B)  homogeneous unemployment rates. 
C)  local labor markets which reach equilibrium quickly and efficiently. 
D)  persistent wage and unemployment differentials among different regions of the country.

Question 18

If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as

Accepted Answer

A)  a cartel. 
B)  countervailing power. 
C)  a bilateral monopoly. 
D)  an internal labor market. 
A)  a cartel. 
B)  countervailing power. 
C)  a bilateral monopoly. 
D)  an internal labor market.

Question 19

According to U.S. Bureau of Labor Statistics data, which of the following industries had the highest unionization rate in 2015?

Accepted Answer

A)  finance 
B)  construction 
C)  transportation 
D)  manufacturing 
A)  finance 
B)  construction 
C)  transportation 
D)  manufacturing

Question 20

Which of the following tactics is most associated with the demand-enhancement union model?

Accepted Answer

A)  reducing the price of inputs that are substitutes for union workers 
B)  lobbying for increases in public expenditures on the product it is producing 
C)  restricting the number of workers allowed to work in the industry 
D)  increasing the price of products that are complements for the one it is producing 
A)  reducing the price of inputs that are substitutes for union workers 
B)  lobbying for increases in public expenditures on the product it is producing 
C)  restricting the number of workers allowed to work in the industry 
D)  increasing the price of products that are complements for the one it is producing

Exam 17: Wage Determination

The majority of union members in the United States belong to unions that are

The equilibrium wage rate in a bilateral monopoly labor market is

A profit-maximizing firm will

The basic explanation for high real wages in the United States and other industrially advanced economies is that the

Traveling sales representative Harold Hill only calls on clients four days a week rather than the five days expected by his employer. This is an example of

A craft union attempts to increase wage rates by

Noncompeting groups of workers are the result of geographic immobility.

Union membership among workers in America has been declining since the 1950s.

A monopsonistic employer's marginal resource (labor) cost curve

Discrimination that results in minorities being paid less than whites for identical work would be an example of which explanation for wage differentials?

For the firm, the major goal of profit sharing plans is to

Real wages in the United States are

In 2015, approximately 5 percent of all work time lost was due to work stoppages.

Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hiring of labor.

Critics of minimum-wage legislation argue that it

The principal-agent problem, as applied to the management of a company, would have the

Geographic immobility in the labor force results in

If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as

According to U.S. Bureau of Labor Statistics data, which of the following industries had the highest unionization rate in 2015?

Which of the following tactics is most associated with the demand-enhancement union model?

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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