Question 1

Which of the following is FALSE regarding unions?

Accepted Answer

A)  The American Federation of Labor (AFL), composed of craft unions, was formed in 1886 under the leadership of Samuel Gompers. 
B)  For a period after World War I the government temporarily stopped protecting labor's right to organize. 
C)  During the Great Depression, legislation was passed that made collective bargaining illegal. 
D)  The AFL and the CIO merged in 1955. 
A)  The American Federation of Labor (AFL), composed of craft unions, was formed in 1886 under the leadership of Samuel Gompers. 
B)  For a period after World War I the government temporarily stopped protecting labor's right to organize. 
C)  During the Great Depression, legislation was passed that made collective bargaining illegal. 
D)  The AFL and the CIO merged in 1955.

Question 2

-In the above table, what is the marginal factor cost of the 4th worker?

Accepted Answer

A)  $16 
B)  $30 
C)  $64 
D)  $22 
A)  $16 
B)  $30 
C)  $64 
D)  $22

Question 3

How can restricting entry into a union help boost members' wages without the union specifically setting wages?

Accepted Answer

With union membership limited, the quant

Question 4

A business enterprise in which employees must belong to the union before they can be hired is

Accepted Answer

A)  a closed shop. 
B)  a union shop. 
C)  a jurisdictional dispute. 
D)  an industrial union. 
A)  a closed shop. 
B)  a union shop. 
C)  a jurisdictional dispute. 
D)  an industrial union.

Question 5

-Use the above table. If the marginal revenue product is $10, 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 6

Why might a union find that attaining the goal of employing all its members and the goal of maximizing total union wage receipts to be incompatible objectives?

Accepted Answer

To ensure that all of its members are em

Question 7

A closed shop is a business enterprise in which

Accepted Answer

A)  employees cannot belong to a union when they are employed, and cannot join a union and keep working there. 
B)  employees must join the union to maintain employment. 
C)  employees must belong to the union before they can be employed. 
D)  employees cannot belong to the union when they are hired, but may join the union later and keep their jobs. 
A)  employees cannot belong to a union when they are employed, and cannot join a union and keep working there. 
B)  employees must join the union to maintain employment. 
C)  employees must belong to the union before they can be employed. 
D)  employees cannot belong to the union when they are hired, but may join the union later and keep their jobs.

Question 8

When workers boycott a company because it does business with a firm whose employees are on strike, that is a

Accepted Answer

A)  secondary boycott. 
B)  primary boycott. 
C)  strike. 
D)  sympathy strike. 
A)  secondary boycott. 
B)  primary boycott. 
C)  strike. 
D)  sympathy strike.

Question 9

Currently about what percentage of the civilian labor force is unionized in the United States?

Accepted Answer

A)  1 percent 
B)  12 percent 
C)  55 percent 
D)  70 percent 
A)  1 percent 
B)  12 percent 
C)  55 percent 
D)  70 percent

Question 10

If the union wants to follow the strategy of maximizing member's income, wages should be set

Accepted Answer

A)  above the market clearing wage rate. 
B)  such that all that wanted to work could work. 
C)  at the market clearing wage rate. 
D)  at the point at which the price elasticity of demand equals 1. 
A)  above the market clearing wage rate. 
B)  such that all that wanted to work could work. 
C)  at the market clearing wage rate. 
D)  at the point at which the price elasticity of demand equals 1.

Question 11

If a union sets the wage rate to maximize the total wage receipts of its members, the marginal revenue would be

Accepted Answer

A)  zero. 
B)  negative. 
C)  positive, but greater than 1. 
D)  positive, but less than 1. 
A)  zero. 
B)  negative. 
C)  positive, but greater than 1. 
D)  positive, but less than 1.

Question 12

Strikes occur in about ________ percent of the labor-management negotiations.

Accepted Answer

A)  2 
B)  25 
C)  64 
D)  99 
A)  2 
B)  25 
C)  64 
D)  99

Question 13

In an analytical sense, unions can be thought of as

Accepted Answer

A)  setters of minimum wages. 
B)  monopoly buyers of workers. 
C)  generators of inflation. 
D)  monopsonies. 
A)  setters of minimum wages. 
B)  monopoly buyers of workers. 
C)  generators of inflation. 
D)  monopsonies.

Question 14

Suppose a union successfully negotiates for its members a wage rate that is above the competitive wage rate, then

Accepted Answer

A)  there will be a surplus of jobs. 
B)  antitrust laws become effective. 
C)  there will be downward pressure on the wage rate until equilibrium is established. 
D)  there will be an excess supply of labor. 
A)  there will be a surplus of jobs. 
B)  antitrust laws become effective. 
C)  there will be downward pressure on the wage rate until equilibrium is established. 
D)  there will be an excess supply of labor.

Question 15

Which of the following has been the largest organized group of U.S. unions during the past 50 years?

Accepted Answer

A)  AFL-CIO 
B)  AFL 
C)  CIO 
D)  Change to Win 
A)  AFL-CIO 
B)  AFL 
C)  CIO 
D)  Change to Win

Question 16

-Refer to the above figure. Under monopsony, the wage rate will be

Accepted Answer

A)  W1. 
B)  W2. 
C)  W3. 
D)  W5. 
A)  W1. 
B)  W2. 
C)  W3. 
D)  W5.

Question 17

A monopsonistic employer will pay a wage rate

Accepted Answer

A)  less than the labor's MRP. 
B)  greater than the labor's MRP. 
C)  equal to the labor's MRP. 
D)  equal to MFC. 
A)  less than the labor's MRP. 
B)  greater than the labor's MRP. 
C)  equal to the labor's MRP. 
D)  equal to MFC.

Question 18

The United Auto Worker (UAW) would best be classified as

Accepted Answer

A)  a craft union. 
B)  an industrial union. 
C)  a guild. 
D)  closed shop union. 
E)  none of the above. 
A)  a craft union. 
B)  an industrial union. 
C)  a guild. 
D)  closed shop union. 
E)  none of the above.

Question 19

A firm that is a monopolist in the output market and a monopsonist in the input market

Accepted Answer

A)  will hire the same amount of labor as if perfect competition prevailed in both markets, but pay a lower wage. 
B)  will restrict the level of output but not that of employment compared to the perfectly competitive case. 
C)  will hire less labor but pay the same wage compared to the perfectly competitive case. 
D)  will hire less labor and pay a lower wage compared to the perfectly competitive case. 
A)  will hire the same amount of labor as if perfect competition prevailed in both markets, but pay a lower wage. 
B)  will restrict the level of output but not that of employment compared to the perfectly competitive case. 
C)  will hire less labor but pay the same wage compared to the perfectly competitive case. 
D)  will hire less labor and pay a lower wage compared to the perfectly competitive case.

Question 20

A work stoppage by a union in solidarity with another union's cause is known as a

Accepted Answer

A)  secondary boycott. 
B)  sympathy strike. 
C)  jurisdictional dispute. 
D)  primary boycott. 
A)  secondary boycott. 
B)  sympathy strike. 
C)  jurisdictional dispute. 
D)  primary boycott.

Exam 29: Unions and Labor Market Monopoly Power

Which of the following is FALSE regarding unions?

-In the above table, what is the marginal factor cost of the 4th worker?

How can restricting entry into a union help boost members' wages without the union specifically setting wages?

A business enterprise in which employees must belong to the union before they can be hired is

-Use the above table. If the marginal revenue product is $10, how many workers will the profit maximizing monopsonist hire?

Why might a union find that attaining the goal of employing all its members and the goal of maximizing total union wage receipts to be incompatible objectives?

A closed shop is a business enterprise in which

When workers boycott a company because it does business with a firm whose employees are on strike, that is a

Currently about what percentage of the civilian labor force is unionized in the United States?

If the union wants to follow the strategy of maximizing member's income, wages should be set

If a union sets the wage rate to maximize the total wage receipts of its members, the marginal revenue would be

Strikes occur in about ________ percent of the labor-management negotiations.

In an analytical sense, unions can be thought of as

Suppose a union successfully negotiates for its members a wage rate that is above the competitive wage rate, then

Which of the following has been the largest organized group of U.S. unions during the past 50 years?

-Refer to the above figure. Under monopsony, the wage rate will be

A monopsonistic employer will pay a wage rate

The United Auto Worker (UAW) would best be classified as

A firm that is a monopolist in the output market and a monopsonist in the input market

A work stoppage by a union in solidarity with another union's cause is known as a

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