Question 1

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 2

Available research suggests that the union wage advantage diminishes the national output by:

Accepted Answer

A)  15 percent. 
B)  8 percent. 
C)  3 percent. 
D)  less than 1 percent. 
A)  15 percent. 
B)  8 percent. 
C)  3 percent. 
D)  less than 1 percent.

Question 3

(Last Word)The dispute over the pay of chief executive officers (CEOs)of U.S.corporations hinges on whether or not such pay:

Accepted Answer

A)  should be granted for past performance or for current performance. 
B)  is determined in a competitive labor market or in a monopsonistic labor market. 
C)  is justified on productivity grounds or mainly reflects an overestimation of CEO importance by corporate boards of directors. 
D)  should contain performance incentives such as stock options,stock shares,or bonuses. 
A)  should be granted for past performance or for current performance. 
B)  is determined in a competitive labor market or in a monopsonistic labor market. 
C)  is justified on productivity grounds or mainly reflects an overestimation of CEO importance by corporate boards of directors. 
D)  should contain performance incentives such as stock options,stock shares,or bonuses.

Question 4

Suppose in some economy there are 100 million workers;8 million of those workers work in retail trade,and 2 million of the retail workers belong to unions.Total union membership in this economy is 30 million.The rate of unionization in the economy is:

Accepted Answer

A)  30 percent and the rate of unionization in retail trade in 20 percent. 
B)  8 percent and the rate of unionization in retail trade is 2 percent. 
C)  30 percent and the rate of unionization in retail trade is 25 percent. 
D)  20 percent and the rate of unionization in retail trade is 25 percent. 
A)  30 percent and the rate of unionization in retail trade in 20 percent. 
B)  8 percent and the rate of unionization in retail trade is 2 percent. 
C)  30 percent and the rate of unionization in retail trade is 25 percent. 
D)  20 percent and the rate of unionization in retail trade is 25 percent.

Question 5

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage),its:

Accepted Answer

A)  MRC curve is also upsloping. 
B)  MRC curve is perfectly elastic. 
C)  MRP curve is perfectly inelastic. 
D)  MRP curve is also upsloping. 
A)  MRC curve is also upsloping. 
B)  MRC curve is perfectly elastic. 
C)  MRP curve is perfectly inelastic. 
D)  MRP curve is also upsloping.

Question 6

Use the resource demand data shown on the left and the resource supply data on the right in answering the following question: $\begin{array}{c}
\underline{\text { Labor Demand Data }}\quad\quad\quad\quad\quad\quad\quad\quad\underline{\text { Labor Supply Data }}\
\begin{array}{c}
\
\underline{\text {Employment}}\
0\
1\
2\
3\
4\
5\
6
\end{array}
\begin{array}{c}
\text {Marginal}\
\underline{\text {Product}}\
0\
15\
28\
39\
48\
55\
60
\end{array}
\begin{array}{c}
\text { Product }\
\underline{\text { Price } }\
\$ 2.20 \
2.00 \
1.80 \
1.60 \
1.40 \
1.20 \
1.00 
\end{array}
\begin{array}{c}
\
\underline{\text {Employment}}\
0\
1\
2\
3\
4\
5\
6 
\end{array}
\begin{array}{c}
\text { Wage}\
\underline{\text { Rate }} \
-- \
\$1.00 \
2.00\
3.00 \
4.00 \
5.00 \
6.00
\end{array}
\end{array}$
  Refer to the given data.What will be the profit-maximizing selling price of the product?

Accepted Answer

A)  $1.40. 
B)  $1.60. 
C)  $1.80. 
D)  $2.00. 
A)  $1.40. 
B)  $1.60. 
C)  $1.80. 
D)  $2.00.

Question 7

A monopsonist's wage cost in hiring an additional worker is the:

Accepted Answer

A)  worker's wage rate. 
B)  worker's wage rate plus the wage increases paid to all workers already employed. 
C)  worker's wage rate adjusted for the lower price that must be charged for the extra output. 
D)  marginal wage cost less the wage rate. 
A)  worker's wage rate. 
B)  worker's wage rate plus the wage increases paid to all workers already employed. 
C)  worker's wage rate adjusted for the lower price that must be charged for the extra output. 
D)  marginal wage cost less the wage rate.

Question 8

The electricians' union is a good example of:

Accepted Answer

A)  exclusive unionism. 
B)  an industrial union. 
C)  how unions can simultaneously increase wage rates and employment by increasing the demand for labor. 
D)  inclusive unionism. 
A)  exclusive unionism. 
B)  an industrial union. 
C)  how unions can simultaneously increase wage rates and employment by increasing the demand for labor. 
D)  inclusive unionism.

Question 9

The individual firm in a purely competitive labor market faces:

Accepted Answer

A)  a perfectly elastic labor supply curve and a downsloping labor demand curve. 
B)  a perfectly elastic labor demand curve and an upsloping labor supply curve. 
C)  labor demand and labor supply curves both of which are perfectly elastic. 
D)  a downsloping labor demand curve and an upsloping labor supply curve. 
A)  a perfectly elastic labor supply curve and a downsloping labor demand curve. 
B)  a perfectly elastic labor demand curve and an upsloping labor supply curve. 
C)  labor demand and labor supply curves both of which are perfectly elastic. 
D)  a downsloping labor demand curve and an upsloping labor supply curve.

Question 10

Economists regard expenditures on education as investments because:

Accepted Answer

A)  they are subject to tax deductions at the same rate as are expenditures on machinery and equipment. 
B)  education is economically beneficial at the same time it is being acquired. 
C)  such expenditures are current costs that are intended to enhance future earnings. 
D)  they differ from expenditures on health and worker mobility. 
A)  they are subject to tax deductions at the same rate as are expenditures on machinery and equipment. 
B)  education is economically beneficial at the same time it is being acquired. 
C)  such expenditures are current costs that are intended to enhance future earnings. 
D)  they differ from expenditures on health and worker mobility.

Question 11

Which of the following might be expected to increase union membership?

Accepted Answer

A)  Increased labor force participation by women and young people. 
B)  Decreased imports of manufactured goods. 
C)  Increased substitution of capital for labor in the production process. 
D)  Continued growth of service-related industries. 
A)  Increased labor force participation by women and young people. 
B)  Decreased imports of manufactured goods. 
C)  Increased substitution of capital for labor in the production process. 
D)  Continued growth of service-related industries.

Question 12

Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:

Accepted Answer

A)  $6 billion per year. 
B)  about 2 percent of domestic output. 
C)  less than one-half of 1 percent of domestic output. 
D)  about 4 percent of domestic output. 
A)  $6 billion per year. 
B)  about 2 percent of domestic output. 
C)  less than one-half of 1 percent of domestic output. 
D)  about 4 percent of domestic output.

Question 13

The labor supply curve facing a purely competitive firm is perfectly inelastic.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is illegal under federal labor law?

Accepted Answer

A)  Closed shops. 
B)  Agency shops. 
C)  Union shops. 
D)  State right-to-work laws. 
A)  Closed shops. 
B)  Agency shops. 
C)  Union shops. 
D)  State right-to-work laws.

Question 15

A monopsonistic employer may sell its product in a competitive market.

Accepted Answer

A) True 
 B)False

Question 16

If a firm is hiring a certain type of labor under purely competitive conditions:

Accepted Answer

A)  its labor demand curve will be perfectly elastic at the market-determined wage rate. 
B)  the labor supply curve will lie above the marginal labor cost curve. 
C)  the labor supply and marginal labor (resource)cost curves will coincide and be upsloping. 
D)  the labor supply and marginal labor (resource)cost curves will coincide and be perfectly elastic. 
A)  its labor demand curve will be perfectly elastic at the market-determined wage rate. 
B)  the labor supply curve will lie above the marginal labor cost curve. 
C)  the labor supply and marginal labor (resource)cost curves will coincide and be upsloping. 
D)  the labor supply and marginal labor (resource)cost curves will coincide and be perfectly elastic.

Question 17

The real wage will rise if the nominal wage:

Accepted Answer

A)  falls more rapidly than the general price level. 
B)  increases at the same rate as labor productivity. 
C)  increases more rapidly than the general price level. 
D)  falls at the same rate as the general price level. 
A)  falls more rapidly than the general price level. 
B)  increases at the same rate as labor productivity. 
C)  increases more rapidly than the general price level. 
D)  falls at the same rate as the general price level.

Question 18

Suppose the MRP of a firm's 12th worker is $22 and the worker's marginal wage cost is $16.We can say with certainty that the firm:

Accepted Answer

A)  is hiring labor in a competitive labor market at a wage rate of $16. 
B)  is hiring labor in a monopsonistic labor market. 
C)  will find it profitable to hire fewer workers. 
D)  will find it profitable to hire more workers. 
A)  is hiring labor in a competitive labor market at a wage rate of $16. 
B)  is hiring labor in a monopsonistic labor market. 
C)  will find it profitable to hire fewer workers. 
D)  will find it profitable to hire more workers.

Question 19

Many economists are critical of the minimum wage because they believe that it:

Accepted Answer

A)  hurts the efforts of labor unions. 
B)  reduces the number of available job opportunities. 
C)  conflicts with policies designed to equalize the distribution of income. 
D)  causes labor shortages in affected markets. 
A)  hurts the efforts of labor unions. 
B)  reduces the number of available job opportunities. 
C)  conflicts with policies designed to equalize the distribution of income. 
D)  causes labor shortages in affected markets.

Question 20

As compared to a purely competitive labor market,in a nonunionized monopsonistic labor market,wages:

Accepted Answer

A)  and employment will both be lower. 
B)  will be higher,but employment will be lower. 
C)  will be lower,but employment will be higher. 
D)  and employment will both be higher. 
A)  and employment will both be lower. 
B)  will be higher,but employment will be lower. 
C)  will be lower,but employment will be higher. 
D)  and employment will both be higher.

Occupational licensing:

Available research suggests that the union wage advantage diminishes the national output by:

(Last Word)The dispute over the pay of chief executive officers (CEOs)of U.S.corporations hinges on whether or not such pay:

Suppose in some economy there are 100 million workers;8 million of those workers work in retail trade,and 2 million of the retail workers belong to unions.Total union membership in this economy is 30 million.The rate of unionization in the economy is:

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage),its:

A monopsonist's wage cost in hiring an additional worker is the:

The electricians' union is a good example of:

The individual firm in a purely competitive labor market faces:

Economists regard expenditures on education as investments because:

Which of the following might be expected to increase union membership?

Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:

The labor supply curve facing a purely competitive firm is perfectly inelastic.

Which of the following is illegal under federal labor law?

A monopsonistic employer may sell its product in a competitive market.

If a firm is hiring a certain type of labor under purely competitive conditions:

The real wage will rise if the nominal wage:

Suppose the MRP of a firm's 12^th worker is $22 and the worker's marginal wage cost is $16.We can say with certainty that the firm:

Many economists are critical of the minimum wage because they believe that it:

As compared to a purely competitive labor market,in a nonunionized monopsonistic labor market,wages:

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 Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

Filters

Exam 16: Wage Determination

Occupational licensing:

Available research suggests that the union wage advantage diminishes the national output by:

(Last Word)The dispute over the pay of chief executive officers (CEOs)of U.S.corporations hinges on whether or not such pay:

Suppose in some economy there are 100 million workers;8 million of those workers work in retail trade,and 2 million of the retail workers belong to unions.Total union membership in this economy is 30 million.The rate of unionization in the economy is:

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage),its:

A monopsonist's wage cost in hiring an additional worker is the:

The electricians' union is a good example of:

The individual firm in a purely competitive labor market faces:

Economists regard expenditures on education as investments because:

Which of the following might be expected to increase union membership?

Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:

The labor supply curve facing a purely competitive firm is perfectly inelastic.

Which of the following is illegal under federal labor law?

A monopsonistic employer may sell its product in a competitive market.

If a firm is hiring a certain type of labor under purely competitive conditions:

The real wage will rise if the nominal wage:

Suppose the MRP of a firm's 12th worker is $22 and the worker's marginal wage cost is $16.We can say with certainty that the firm:

Many economists are critical of the minimum wage because they believe that it:

As compared to a purely competitive labor market,in a nonunionized monopsonistic labor market,wages:

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 Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

Filters

Suppose the MRP of a firm's 12^th worker is $22 and the worker's marginal wage cost is $16.We can say with certainty that the firm: