Question 1

A monopsonistic employer faces a

Accepted Answer

A)  perfectly elastic labor supply curve. 
B)  perfectly inelastic labor supply curve. 
C)  MFC curve that is greater than the wage rate at each quantity of labor. 
D)  MFC curve that is less than the wage rate at each quantity of labor. 
A)  perfectly elastic labor supply curve. 
B)  perfectly inelastic labor supply curve. 
C)  MFC curve that is greater than the wage rate at each quantity of labor. 
D)  MFC curve that is less than the wage rate at each quantity of labor.

Question 2

Exploitation due to a single buyer in the input market is known as

Accepted Answer

A)  monopoly exploitation. 
B)  monopsonistic exploitation. 
C)  Marxian exploitation. 
D)  the result of closed shops. 
A)  monopoly exploitation. 
B)  monopsonistic exploitation. 
C)  Marxian exploitation. 
D)  the result of closed shops.

Question 3

Craft unions exert market control by

Accepted Answer

A)  limiting the demand for labor. 
B)  limiting the supply of labor. 
C)  setting minimum wages. 
D)  setting maximum wages. 
A)  limiting the demand for labor. 
B)  limiting the supply of labor. 
C)  setting minimum wages. 
D)  setting maximum wages.

Question 4

The AFL and CIO merged because it was thought that

Accepted Answer

A)  organized labor would grow faster as a result. 
B)  union pension funds would shrink as a result. 
C)  strikes could be averted. 
D)  managers would be more sympathetic to unions. 
A)  organized labor would grow faster as a result. 
B)  union pension funds would shrink as a result. 
C)  strikes could be averted. 
D)  managers would be more sympathetic to unions.

Question 5

Suppose that under its collective bargaining agreement, the XYZ Co. can only hire union members in good standing at the time of hiring. XYZ Co. is

Accepted Answer

A)  a union shop. 
B)  a closed shop. 
C)  an open shop. 
D)  a company union. 
A)  a union shop. 
B)  a closed shop. 
C)  an open shop. 
D)  a company union.

Question 6

A monopsonist finds its profit maximizing quantity of labor employed at the point at which

Accepted Answer

A)  marginal revenue product is zero. 
B)  marginal revenue product equals marginal factor cost. 
C)  marginal factor cost is zero. 
D)  total cost equals total revenue. 
A)  marginal revenue product is zero. 
B)  marginal revenue product equals marginal factor cost. 
C)  marginal factor cost is zero. 
D)  total cost equals total revenue.

Question 7

A monopsonist that wants to hire more labor must pay more for the new labor than it is currently paying and increase the wage rate of all existing employees because

Accepted Answer

A)  the demand curve for labor is inelastic. 
B)  of labor unions. 
C)  the supply of labor is upward sloping. 
D)  of competition in the labor market. 
A)  the demand curve for labor is inelastic. 
B)  of labor unions. 
C)  the supply of labor is upward sloping. 
D)  of competition in the labor market.

Question 8

Which of the following type of shops is unlawful under the provisions of the Taft-Hartley Act?

Accepted Answer

A)  union shops 
B)  closed shops 
C)  modified union shops 
D)  open shops 
A)  union shops 
B)  closed shops 
C)  modified union shops 
D)  open shops

Question 9

Which of the following laws made "closed shops" unlawful?

Accepted Answer

A)  Taft-Hartley Act 
B)  National Industrial Recovery Act 
C)  National Labor Relations Act 
D)  Railway Workers Act 
A)  Taft-Hartley Act 
B)  National Industrial Recovery Act 
C)  National Labor Relations Act 
D)  Railway Workers Act

Question 10

Since the 1970s, union membership in the U.S. has been

Accepted Answer

A)  rising. 
B)  remaining constant. 
C)  declining. 
D)  erratic. 
A)  rising. 
B)  remaining constant. 
C)  declining. 
D)  erratic.

Question 11

If a union negotiates and obtains a wage rate above the competitive wage rate,

Accepted Answer

A)  it must find a way to make workers more productive. 
B)  employment in the union sector will increase relative to employment in the nonunion sector. 
C)  it must find a way to ration jobs among the excessive number of workers who wish to work in the union sector. 
D)  unemployment will increase in the nonunion sector relative to the union sector. 
A)  it must find a way to make workers more productive. 
B)  employment in the union sector will increase relative to employment in the nonunion sector. 
C)  it must find a way to ration jobs among the excessive number of workers who wish to work in the union sector. 
D)  unemployment will increase in the nonunion sector relative to the union sector.

Question 12

-According to the above table, the marginal factor cost of the fifth worker is

Accepted Answer

A)  $30.00. 
B)  $45.00. 
C)  $60.00. 
D)  $90.00. 
A)  $30.00. 
B)  $45.00. 
C)  $60.00. 
D)  $90.00.

Question 13

When unions raise wages beyond what productivity increases would permit,

Accepted Answer

A)  more union workers are employed. 
B)  there are higher wages for all union members. 
C)  there is a redistribution of income from low- to high-seniority workers. 
D)  nonunion workers wages in the economy also increase. 
A)  more union workers are employed. 
B)  there are higher wages for all union members. 
C)  there is a redistribution of income from low- to high-seniority workers. 
D)  nonunion workers wages in the economy also increase.

Question 14

Which of the following correctly describes the trend in U.S. union membership?

Accepted Answer

A)  Union membership has been decreasing steadily since the 1930s. 
B)  Union membership decreased from 1930 - 1960, but has been increasing steadily since. 
C)  Union membership peaked in the 1960s and has been decreasing steadily since. 
D)  Union membership declined until the 1980s, but has been increasing steadily since. 
A)  Union membership has been decreasing steadily since the 1930s. 
B)  Union membership decreased from 1930 - 1960, but has been increasing steadily since. 
C)  Union membership peaked in the 1960s and has been decreasing steadily since. 
D)  Union membership declined until the 1980s, but has been increasing steadily since.

Question 15

If we were to compare the annual earnings of union and nonunion workers in recent years, we would find that

Accepted Answer

A)  unions have not succeeded in raising the annual incomes of their members. 
B)  unions have succeeded in raising the annual incomes of their members. 
C)  the data is incomplete to tell whether unions have been successful in raising the annual income of their members. 
D)  union members have annual incomes substantially below nonunion members. 
A)  unions have not succeeded in raising the annual incomes of their members. 
B)  unions have succeeded in raising the annual incomes of their members. 
C)  the data is incomplete to tell whether unions have been successful in raising the annual income of their members. 
D)  union members have annual incomes substantially below nonunion members.

Question 16

Labor unions are organizations that

Accepted Answer

A)  try to secure more opportunities for more workers in the economy. 
B)  try to secure economic improvements for all workers. 
C)  try to secure economic improvements for their members. 
D)  try to make labor markets more competitive. 
A)  try to secure more opportunities for more workers in the economy. 
B)  try to secure economic improvements for all workers. 
C)  try to secure economic improvements for their members. 
D)  try to make labor markets more competitive.

Question 17

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 18

Which type of collective bargaining agreement requires workers to be union members prior to being considered for employment?

Accepted Answer

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

Question 19

Which of the following is the BEST example of a monopsonist?

Accepted Answer

A)  a household hiring a gardener 
B)  a turnip farmer hiring seasonal help 
C)  Hershey's Chocolate Factory in Hershey, PA 
D)  Vinaka Coffee Shop in Carlsbad, CA 
A)  a household hiring a gardener 
B)  a turnip farmer hiring seasonal help 
C)  Hershey's Chocolate Factory in Hershey, PA 
D)  Vinaka Coffee Shop in Carlsbad, CA

Question 20

The first type of labor unions that emerged in the United States were

Accepted Answer

A)  industrial unions. 
B)  craft unions. 
C)  professional unions. 
D)  transportation unions. 
A)  industrial unions. 
B)  craft unions. 
C)  professional unions. 
D)  transportation unions.

Exam 29: Unions and Labor Market Monopoly Power

A monopsonistic employer faces a

Exploitation due to a single buyer in the input market is known as

Craft unions exert market control by

The AFL and CIO merged because it was thought that

Suppose that under its collective bargaining agreement, the XYZ Co. can only hire union members in good standing at the time of hiring. XYZ Co. is

A monopsonist finds its profit maximizing quantity of labor employed at the point at which

A monopsonist that wants to hire more labor must pay more for the new labor than it is currently paying and increase the wage rate of all existing employees because

Which of the following type of shops is unlawful under the provisions of the Taft-Hartley Act?

Which of the following laws made "closed shops" unlawful?

Since the 1970s, union membership in the U.S. has been

If a union negotiates and obtains a wage rate above the competitive wage rate,

-According to the above table, the marginal factor cost of the fifth worker is

When unions raise wages beyond what productivity increases would permit,

Which of the following correctly describes the trend in U.S. union membership?

If we were to compare the annual earnings of union and nonunion workers in recent years, we would find that

Labor unions are organizations that

Which of the following is FALSE regarding bilateral monopoly?

Which type of collective bargaining agreement requires workers to be union members prior to being considered for employment?

Which of the following is the BEST example of a monopsonist?

The first type of labor unions that emerged in the United States were

The Nature of Economics

Scarcity and the World of Trade-Offs

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Perfect Competition

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