Question 1

-Use the above table. If the marginal revenue product is $20, 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 2

A union shop is a

Accepted Answer

A)  strike by a union in sympathy with another union's strike or cause. 
B)  dispute involving two or more unions over which should have control of a particular jurisdiction. 
C)  business enterprise in which employees must belong to the union before they can be hired and must remain in the union after they are hired. 
D)  business which may hire nonunion members conditional on their joining the union by some specified date after employment begins. 
A)  strike by a union in sympathy with another union's strike or cause. 
B)  dispute involving two or more unions over which should have control of a particular jurisdiction. 
C)  business enterprise in which employees must belong to the union before they can be hired and must remain in the union after they are hired. 
D)  business which may hire nonunion members conditional on their joining the union by some specified date after employment begins.

Question 3

If a union is successful in negotiating a wage rate which is above the market clearing wage, then which of the following would not occur?

Accepted Answer

A)  The higher wages attract more workers leading to a shortage of jobs. 
B)  Management may replace part of the workforce with machinery. 
C)  To handle the surplus of labor the union will form a closed shop. 
D)  The union may shift the supply of labor curve by developing methods to ration jobs. 
A)  The higher wages attract more workers leading to a shortage of jobs. 
B)  Management may replace part of the workforce with machinery. 
C)  To handle the surplus of labor the union will form a closed shop. 
D)  The union may shift the supply of labor curve by developing methods to ration jobs.

Question 4

For a monopsonist, the marginal factor cost curve will be above the supply of labor curve. The marginal factor cost curve is above the supply curve because

Accepted Answer

A)  the monopsonist will take advantage of labor and offer them lower wages. 
B)  in order for the monopsonist to sell an additional unit of the good, the price of the good must be lowered. 
C)  in order for the monopsonist to hire more labor the monopsonist must also purchase more capital. 
D)  the monopsonist will have to pay all workers a higher wage rate than the current wage rate if it wants to hire more workers. 
A)  the monopsonist will take advantage of labor and offer them lower wages. 
B)  in order for the monopsonist to sell an additional unit of the good, the price of the good must be lowered. 
C)  in order for the monopsonist to hire more labor the monopsonist must also purchase more capital. 
D)  the monopsonist will have to pay all workers a higher wage rate than the current wage rate if it wants to hire more workers.

Question 5

Featherbedding means that

Accepted Answer

A)  company management receives a cut from the collected union wages. 
B)  employers are force to hire apprentices. 
C)  employers are forced to hire more workers than they want to. 
D)  a union can join a sympathy strike. 
A)  company management receives a cut from the collected union wages. 
B)  employers are force to hire apprentices. 
C)  employers are forced to hire more workers than they want to. 
D)  a union can join a sympathy strike.

Question 6

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 7

A right-to-work law makes it illegal

Accepted Answer

A)  to prevent union members from working in any firm. 
B)  to fire a worker who has joined a union or who tries to organize a union at any firm. 
C)  to inquire whether a prospective employee is a member of a union or not. 
D)  for union membership to be a requirement for continued employment in any firm. 
A)  to prevent union members from working in any firm. 
B)  to fire a worker who has joined a union or who tries to organize a union at any firm. 
C)  to inquire whether a prospective employee is a member of a union or not. 
D)  for union membership to be a requirement for continued employment in any firm.

Question 8

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 9

Which of the following is FALSE regarding a monopsonist?

Accepted Answer

A)  The monopsonist is the only buyer in a market. 
B)  The monopsonist faces an upward sloping labor supply curve. 
C)  The monopsonist faces an upward sloping labor demand curve. 
D)  The monopsonist faces the entire market labor supply curve. 
A)  The monopsonist is the only buyer in a market. 
B)  The monopsonist faces an upward sloping labor supply curve. 
C)  The monopsonist faces an upward sloping labor demand curve. 
D)  The monopsonist faces the entire market labor supply curve.

Question 10

The Congress of Industrial Organization (CIO) was founded by

Accepted Answer

A)  Samuel Gompers. 
B)  Jimmy Hoffa. 
C)  John L. Lewis. 
D)  George Meany. 
A)  Samuel Gompers. 
B)  Jimmy Hoffa. 
C)  John L. Lewis. 
D)  George Meany.

Question 11

If you get a job and are required to join the union within a month, this is known as a(n)

Accepted Answer

A)  closed shop. 
B)  open shop. 
C)  agency shop. 
D)  union shop. 
A)  closed shop. 
B)  open shop. 
C)  agency shop. 
D)  union shop.

Question 12

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 13

Collective bargaining

Accepted Answer

A)  has nothing to do with fringe benefits. 
B)  is bargaining between unions and management. 
C)  is illegal in many states. 
D)  is practiced in non-union related disputes. 
A)  has nothing to do with fringe benefits. 
B)  is bargaining between unions and management. 
C)  is illegal in many states. 
D)  is practiced in non-union related disputes.

Question 14

-In the above figure, what is the quantity of workers that would be hired by a monopsonist?

Accepted Answer

A)  Q1 
B)  Q2 
C)  Q3 
D)  Q4 
A)  Q1 
B)  Q2 
C)  Q3 
D)  Q4

Question 15

What is it called when the price paid for a variable input is less than its marginal revenue product?

Accepted Answer

A)  bilateral monopoly 
B)  monopsonistic exploitation 
C)  monopolistic exploitation 
D)  featherbedding 
A)  bilateral monopoly 
B)  monopsonistic exploitation 
C)  monopolistic exploitation 
D)  featherbedding

Question 16

Under monopsony, marginal factor cost is

Accepted Answer

A)  equal to the wage rate. 
B)  below the wage rate but increases as more workers are hired. 
C)  greater than the wage rate. 
D)  downward sloping. 
A)  equal to the wage rate. 
B)  below the wage rate but increases as more workers are hired. 
C)  greater than the wage rate. 
D)  downward sloping.

Question 17

-Use the above table. The MFC of the 3rd worker is

Accepted Answer

A)  $5. 
B)  $30. 
C)  $20. 
D)  $6.7. 
A)  $5. 
B)  $30. 
C)  $20. 
D)  $6.7.

Question 18

A union contract requiring elevator operators in a building with automatic elevators is an example of

Accepted Answer

A)  a closed shop. 
B)  featherbedding. 
C)  a lockout. 
D)  a right-to-work requirement. 
A)  a closed shop. 
B)  featherbedding. 
C)  a lockout. 
D)  a right-to-work requirement.

Question 19

The MFC can be calculated by the

Accepted Answer

A)  change in total wages/change in labor. 
B)  total wages/total labor. 
C)  change in labor/change in total wages. 
D)  total wages/change in labor. 
A)  change in total wages/change in labor. 
B)  total wages/total labor. 
C)  change in labor/change in total wages. 
D)  total wages/change in labor.

Question 20

All of the following can raise wages of union members EXCEPT

Accepted Answer

A)  increasing the demand for non-union made goods. 
B)  increasing the demand for union-made goods. 
C)  limiting union membership over time. 
D)  increasing the productivity of union workers. 
A)  increasing the demand for non-union made goods. 
B)  increasing the demand for union-made goods. 
C)  limiting union membership over time. 
D)  increasing the productivity of union workers.

Exam 29: Unions and Labor Market Monopoly Power

-Use the above table. If the marginal revenue product is $20, how many workers will the profit maximizing monopsonist hire?

A union shop is a

If a union is successful in negotiating a wage rate which is above the market clearing wage, then which of the following would not occur?

For a monopsonist, the marginal factor cost curve will be above the supply of labor curve. The marginal factor cost curve is above the supply curve because

Featherbedding means that

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

A right-to-work law makes it illegal

Collective bargaining refers to

Which of the following is FALSE regarding a monopsonist?

The Congress of Industrial Organization (CIO) was founded by

If you get a job and are required to join the union within a month, this is known as a(n)

State right-to-work laws

Collective bargaining

-In the above figure, what is the quantity of workers that would be hired by a monopsonist?

What is it called when the price paid for a variable input is less than its marginal revenue product?

Under monopsony, marginal factor cost is

-Use the above table. The MFC of the 3rd worker is

A union contract requiring elevator operators in a building with automatic elevators is an example of

The MFC can be calculated by the

All of the following can raise wages of union members EXCEPT

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