Question 1

-Refer the above figure. An increase in labor productivity is likely to stimulate and shift the labor demand curve to

Accepted Answer

A)  the right and hence increase union wages per year. 
B)  to the left and hence increase union wages per year. 
C)  the right and hence lower union wages per year. 
D)  None of the above is likely to happen. 
A)  the right and hence increase union wages per year. 
B)  to the left and hence increase union wages per year. 
C)  the right and hence lower union wages per year. 
D)  None of the above is likely to happen.

Question 2

Suppose a union negotiates for its members a wage that is above the market-clearing wage. What problems does the union have to solve now? Explain.

Accepted Answer

The higher wage implies there will be an

Question 3

Union membership, in terms of percentage of the U.S. civilian labor force

Accepted Answer

A)  has increased steadily since the passage of the Wagner Act. 
B)  peaked about 1960 and has since declined. 
C)  was over 50 percent in 1987. 
D)  has increased dramatically since 1970. 
A)  has increased steadily since the passage of the Wagner Act. 
B)  peaked about 1960 and has since declined. 
C)  was over 50 percent in 1987. 
D)  has increased dramatically since 1970.

Question 4

When there is only one buyer of labor in a community, we talk of a

Accepted Answer

A)  monopoly. 
B)  monopsony. 
C)  monopolistic market. 
D)  labor cooperative. 
A)  monopoly. 
B)  monopsony. 
C)  monopolistic market. 
D)  labor cooperative.

Question 5

-Refer to the above table. What is the marginal factor cost when the firm employs the third unit of labor?

Accepted Answer

A)  $62 
B)  $57 
C)  $25 
D)  $21 
A)  $62 
B)  $57 
C)  $25 
D)  $21

Question 6

The supply curve of labor to a monopsonist is

Accepted Answer

A)  upward sloping. 
B)  downward sloping because of the law of diminishing marginal returns. 
C)  downward sloping, but not because of the law of diminishing marginal returns. 
D)  horizontal. 
A)  upward sloping. 
B)  downward sloping because of the law of diminishing marginal returns. 
C)  downward sloping, but not because of the law of diminishing marginal returns. 
D)  horizontal.

Question 7

The United Auto Workers is striking against Ford. The Teamsters refuse to deliver steel to Ford. This is an example of

Accepted Answer

A)  a jurisdictional dispute and is illegal under the Taft-Hartley Act. 
B)  a secondary boycott and is illegal under the Taft-Hartley Act. 
C)  a sympathy strike and is illegal under the Taft-Hartley Act. 
D)  a closed shop and is illegal under the Wagner Act. 
A)  a jurisdictional dispute and is illegal under the Taft-Hartley Act. 
B)  a secondary boycott and is illegal under the Taft-Hartley Act. 
C)  a sympathy strike and is illegal under the Taft-Hartley Act. 
D)  a closed shop and is illegal under the Wagner Act.

Question 8

In 2005, which union organization was formed out of the AFL-CIO membership?

Accepted Answer

A)  National Brotherhood of Teamsters 
B)  Service Employees International Union 
C)  American Federation of Workers 
D)  Change to Win 
A)  National Brotherhood of Teamsters 
B)  Service Employees International Union 
C)  American Federation of Workers 
D)  Change to Win

Question 9

Research indicates that on average, state government unions have

Accepted Answer

A)  raised wages to 35 percent above nonunionized government workers. 
B)  reduce wages 20 to 30 percent below nonunionized private-sector and government workers. 
C)  raised wages about 100 percent above similar workers in the nonunion private sector. 
D)  have not significantly raised wages above similar workers in the nonunion sector. 
A)  raised wages to 35 percent above nonunionized government workers. 
B)  reduce wages 20 to 30 percent below nonunionized private-sector and government workers. 
C)  raised wages about 100 percent above similar workers in the nonunion private sector. 
D)  have not significantly raised wages above similar workers in the nonunion sector.

Question 10

Under monopsony, marginal factor cost

Accepted Answer

A)  is downward sloping. 
B)  is less than the wage rate, although it increases as more workers are hired. 
C)  equals the wage rate. 
D)  is greater than the going wage rate. 
A)  is downward sloping. 
B)  is less than the wage rate, although it increases as more workers are hired. 
C)  equals the wage rate. 
D)  is greater than the going wage rate.

Question 11

Collective bargaining in the United States typically involves negotiations between

Accepted Answer

A)  the government and management over the minimum wage law. 
B)  the management of a company and the leaders of the union over the wages and fringe benefits to be offered. 
C)  an individual and her boss over the appropriate salary level. 
D)  union and nonunion employees regarding work rules. 
A)  the government and management over the minimum wage law. 
B)  the management of a company and the leaders of the union over the wages and fringe benefits to be offered. 
C)  an individual and her boss over the appropriate salary level. 
D)  union and nonunion employees regarding work rules.

Question 12

A closed shop is one in which

Accepted Answer

A)  a union is prohibited. 
B)  some members belong to the union while others do not. 
C)  belonging to a union is a condition of employment. 
D)  the union is a co-manager of the day-to-day operations of the firm. 
A)  a union is prohibited. 
B)  some members belong to the union while others do not. 
C)  belonging to a union is a condition of employment. 
D)  the union is a co-manager of the day-to-day operations of the firm.

Question 13

-In the above figure, which wage rate will yield the highest wage rates for particular workers?

Accepted Answer

A)  W1 
B)  W2 
C)  W3 
D)  W3 - W2 
A)  W1 
B)  W2 
C)  W3 
D)  W3 - W2

Question 14

Under monopsony, the marginal factor cost of a worker is equal to

Accepted Answer

A)  the additional worker's wage rate only. 
B)  the additional worker's wage rate plus the increase in the wages of all other existing workers. 
C)  the increase in the wages of all other existing workers. 
D)  the difference between the worker's wage rate and the lower wage rate received by workers who have already been hired. 
A)  the additional worker's wage rate only. 
B)  the additional worker's wage rate plus the increase in the wages of all other existing workers. 
C)  the increase in the wages of all other existing workers. 
D)  the difference between the worker's wage rate and the lower wage rate received by workers who have already been hired.

Question 15

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

Accepted Answer

A)  unions have not succeeded in raising the hourly incomes of their members above nonunion members. 
B)  unions have succeeded in raising the hourly incomes of their members above nonunion members. 
C)  state government unionized employees have earned less in hourly wages than nonunion government employee. 
D)  union members have increased their hourly incomes, but are still below the hourly incomes of nonunion members. 
A)  unions have not succeeded in raising the hourly incomes of their members above nonunion members. 
B)  unions have succeeded in raising the hourly incomes of their members above nonunion members. 
C)  state government unionized employees have earned less in hourly wages than nonunion government employee. 
D)  union members have increased their hourly incomes, but are still below the hourly incomes of nonunion members.

Question 16

The employees of Aunt Smith's cookies are on strike. Jane has decided not to shop at any store that is still selling Aunt Smith's cookies. This is known as

Accepted Answer

A)  a closed shop. 
B)  a union shop. 
C)  a sympathy strike. 
D)  a secondary boycott. 
A)  a closed shop. 
B)  a union shop. 
C)  a sympathy strike. 
D)  a secondary boycott.

Question 17

The founder of the American Federation of Labor was

Accepted Answer

A)  John L. Lewis. 
B)  Samuel Gompers. 
C)  Walter Reuther. 
D)  Ralph Nader. 
A)  John L. Lewis. 
B)  Samuel Gompers. 
C)  Walter Reuther. 
D)  Ralph Nader.

Question 18

-Refer to the above figure. Suppose there are L4 workers in the union. If the union wants to set a wage rate of W3, it must

Accepted Answer

A)  determine which of its members will earn W3 and which will earn W1. 
B)  accept that L4 - L2 members will not be able to find work in the industry. 
C)  accept that L3 - L2 workers will have to get a lower wage equal to W2 and L4 - L3 workers will have to get a wage of W1. 
D)  determine the most efficient way to get the firms to accept the wage and hire all L4 workers. 
A)  determine which of its members will earn W3 and which will earn W1. 
B)  accept that L4 - L2 members will not be able to find work in the industry. 
C)  accept that L3 - L2 workers will have to get a lower wage equal to W2 and L4 - L3 workers will have to get a wage of W1. 
D)  determine the most efficient way to get the firms to accept the wage and hire all L4 workers.

Question 19

In a bilateral monopoly, the wage rate that is determined in the market

Accepted Answer

A)  is equal to MFC. 
B)  is equal to MRP. 
C)  is indeterminate. 
D)  is the same as in a perfectly competitive market. 
A)  is equal to MFC. 
B)  is equal to MRP. 
C)  is indeterminate. 
D)  is the same as in a perfectly competitive market.

Question 20

What can a union do in order to raise the wages of its members ?

Accepted Answer

A union can establish a wage rate above

Exam 29: Unions and Labor Market Monopoly Power

-Refer the above figure. An increase in labor productivity is likely to stimulate and shift the labor demand curve to

Suppose a union negotiates for its members a wage that is above the market-clearing wage. What problems does the union have to solve now? Explain.

Union membership, in terms of percentage of the U.S. civilian labor force

When there is only one buyer of labor in a community, we talk of a

-Refer to the above table. What is the marginal factor cost when the firm employs the third unit of labor?

The supply curve of labor to a monopsonist is

The United Auto Workers is striking against Ford. The Teamsters refuse to deliver steel to Ford. This is an example of

In 2005, which union organization was formed out of the AFL-CIO membership?

Research indicates that on average, state government unions have

Under monopsony, marginal factor cost

Collective bargaining in the United States typically involves negotiations between

A closed shop is one in which

-In the above figure, which wage rate will yield the highest wage rates for particular workers?

Under monopsony, the marginal factor cost of a worker is equal to

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

The employees of Aunt Smith's cookies are on strike. Jane has decided not to shop at any store that is still selling Aunt Smith's cookies. This is known as

The founder of the American Federation of Labor was

-Refer to the above figure. Suppose there are L4 workers in the union. If the union wants to set a wage rate of W3, it must

In a bilateral monopoly, the wage rate that is determined in the market

What can a union do in order to raise the wages of its members ?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters