Question 1

Exhibit 27-2
​
  
-Refer to Exhibit 27-2. The union wants management to believe the supply curve of labor is S'S instead of SS. What does supply curve S'S represent?

Accepted Answer

A) It represents a situation where management cannot hire workers for less than W2, and if the firm wants to hire more workers than it hires at equilibrium, it will have to pay a wage between W1 and W2. 
B) It represents a situation where management cannot hire workers for more than W2, and if the firm wants to hire more workers than Q2 it will have to pay more than W1. 
C) It represents a situation where management cannot hire workers for less than W2, and if the firm wants to hire more than Q3 workers it will have to pay more than W2. 
D) It represents a situation where management cannot hire Q1 - Q2 workers for less than W2, but that Q3 - Q1 workers can be hired for less. 
A) It represents a situation where management cannot hire workers for less than W2, and if the firm wants to hire more workers than it hires at equilibrium, it will have to pay a wage between W1 and W2. 
B) It represents a situation where management cannot hire workers for more than W2, and if the firm wants to hire more workers than Q2 it will have to pay more than W1. 
C) It represents a situation where management cannot hire workers for less than W2, and if the firm wants to hire more than Q3 workers it will have to pay more than W2. 
D) It represents a situation where management cannot hire Q1 - Q2 workers for less than W2, but that Q3 - Q1 workers can be hired for less. C

Question 2

A monopsonist's wage rate is

Accepted Answer

A) the same as marginal factor cost. 
B) greater than marginal factor cost. 
C) less than marginal factor cost. 
D) the same as marginal revenue product. 
E) a and d 
A) the same as marginal factor cost. 
B) greater than marginal factor cost. 
C) less than marginal factor cost. 
D) the same as marginal revenue product. 
E) a and d C

Question 3

In 18th century England, higher wages of weavers appears to have led to the invention of the power loom.

Accepted Answer

A) True 
 B)False  True

Question 4

Exhibit 27-1
​
  
-Refer to Exhibit 27-l. Four demand curves for labor are displayed: D1, D2, D3, and D4. Which provides the most pronounced wage-employment tradeoff?

Accepted Answer

A) D1 
B) D2 
C) D3 
D) D4 
A) D1 
B) D2 
C) D3 
D) D4

Question 5

Since workers today can move from city to city (quite easily) and from firm to firm (again, quite easily), it is unlikely that there are very many pure

Accepted Answer

A) monopsony firms. 
B) oligopoly firms. 
C) monopoly firms. 
D) perfectly competitive firms. 
E) factor price takers. 
A) monopsony firms. 
B) oligopoly firms. 
C) monopoly firms. 
D) perfectly competitive firms. 
E) factor price takers.

Question 6

Which of the following is a possible objective of labor unions?

Accepted Answer

A) employment for all union members 
B) maximizing the total (union) wage bill 
C) maximizing income for a limited number of union members 
D) a and b 
E) a, b, and c 
A) employment for all union members 
B) maximizing the total (union) wage bill 
C) maximizing income for a limited number of union members 
D) a and b 
E) a, b, and c

Question 7

In your textbook there is an exhibit that shows (for selected industries) the median weekly earnings of workers represented by labor unions and the median weekly earnings of workers not represented by labor unions. The point to be made by this comparison is that in some cases,

Accepted Answer

A) nonunion workers earn more than union workers (which is different from what most people expect). 
B) nonunion workers and union workers earn the same. 
C) union workers earn more than nonunion workers. 
D) the number of union workers is greater than the number of nonunion workers. 
E) a and c 
A) nonunion workers earn more than union workers (which is different from what most people expect). 
B) nonunion workers and union workers earn the same. 
C) union workers earn more than nonunion workers. 
D) the number of union workers is greater than the number of nonunion workers. 
E) a and c

Question 8

Exhibit 27-8
​
  
-Refer to Exhibit 27-8. In the absence of collective bargaining, what wage rate would the profit-maximizing monoposonist pay?

Accepted Answer

A) W1 
B) W2 
C) W3 
D) W4 
E) W5 
A) W1 
B) W2 
C) W3 
D) W4 
E) W5

Question 9

Suppose the marginal revenue product of individuals who work in the union sector is greater than that of individuals who work in the nonunion sector. Normally, we would expect labor to move from the nonunionized sector to the unionized sector-from where it is worth less to where it is worth more. But if this cannot happen, owing to the supply-restraining efforts of the union, then

Accepted Answer

A) wages in the nonunion sector will rise. 
B) wages in the union sector will fall. 
C) there will be a misallocation of labor---not all labor will be employed where it is most valuable. 
D) workers in the union sector will move to the nonunion sector. 
A) wages in the nonunion sector will rise. 
B) wages in the union sector will fall. 
C) there will be a misallocation of labor---not all labor will be employed where it is most valuable. 
D) workers in the union sector will move to the nonunion sector.

Question 10

Describe the difference between the "traditional" view of labor unions and the "labor union as a collective voice" view of labor unions with respect to the impact that labor unions have on productivity and efficiency.

Accepted Answer

The traditional view holds that labor un

Question 11

The traditional (or orthodox) view of labor unions is that they

Accepted Answer

A) positively impact productivity and efficiency. 
B) negatively impact productivity and efficiency. 
C) drive an artificial wedge between the wages of comparable labor in the union and nonunion sectors of the labor market. 
D) a and c 
E) b and c 
A) positively impact productivity and efficiency. 
B) negatively impact productivity and efficiency. 
C) drive an artificial wedge between the wages of comparable labor in the union and nonunion sectors of the labor market. 
D) a and c 
E) b and c

Question 12

In collective bargaining,

Accepted Answer

A) union members act together as a single unit. 
B) each union member represents herself in labor-management negotiations. 
C) the objective of the union is to increase its bargaining power with management. 
D) a and c 
E) b and c 
A) union members act together as a single unit. 
B) each union member represents herself in labor-management negotiations. 
C) the objective of the union is to increase its bargaining power with management. 
D) a and c 
E) b and c

Question 13

Exhibit 27-8
​
  
-Refer to Exhibit 27-8. What is the total wage bill of the profit- maximizing monoposonist?

Accepted Answer

A) W5 x Q3 
B) W4 x Q5 
C) W3 x Q2 
D) W2 x Q3 
A) W5 x Q3 
B) W4 x Q5 
C) W3 x Q2 
D) W2 x Q3

Question 14

Exhibit 27-7
​
  
-Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 40 to 50 workers is

Accepted Answer

A) $210. 
B) $21. 
C) $19. 
D) $160. 
E) $15 
A) $210. 
B) $21. 
C) $19. 
D) $160. 
E) $15

Question 15

Unions typically argue that state right-to-work laws

Accepted Answer

A) are unfair. 
B) constrain unions' abilities to control the supply of labor in a market. 
C) are inconsistent with the Taft-Hartley Act. 
D) legalize union shops. 
A) are unfair. 
B) constrain unions' abilities to control the supply of labor in a market. 
C) are inconsistent with the Taft-Hartley Act. 
D) legalize union shops.

Question 16

Among the stated objectives of the National Collegiate Athletic Association (NCAA) regulations is to

Accepted Answer

A) maintain the amateur standing of college athletes. 
B) prevent schools with more money from getting all of the good players. 
C) enhance the competitiveness of college sports. 
D) all of the above 
A) maintain the amateur standing of college athletes. 
B) prevent schools with more money from getting all of the good players. 
C) enhance the competitiveness of college sports. 
D) all of the above

Question 17

It is possible for an increase in minimum wage to increase the number of workers hired in a competitive labor market, but not in a monopsony setting.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 27-7
​
  
-Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 20 to 30 workers is

Accepted Answer

A) $14. 
B) $8. 
C) $17. 
D) $120. 
E) $170. 
A) $14. 
B) $8. 
C) $17. 
D) $120. 
E) $170.

Question 19

Unions are interested in increasing the productivity of their members because as their productivity rises, the __________ their labor __________ and their wages __________.

Accepted Answer

A) demand for; falls; rise. 
B) demand for; rises; rise. 
C) supply of; rises; rise. 
D) supply of; falls; rise. 
A) demand for; falls; rise. 
B) demand for; rises; rise. 
C) supply of; rises; rise. 
D) supply of; falls; rise.

Question 20

A profit-maximizing monopsonist will pay a wage rate that is less than the marginal factor cost.

Accepted Answer

A) True 
 B)False

Exam 27: Wages Unions and Labor

Exhibit 27-2 ​ -Refer to Exhibit 27-2. The union wants management to believe the supply curve of labor is S'S instead of SS. What does supply curve S'S represent?

A monopsonist's wage rate is

In 18th century England, higher wages of weavers appears to have led to the invention of the power loom.

Exhibit 27-1 ​ -Refer to Exhibit 27-l. Four demand curves for labor are displayed: D1, D2, D3, and D4. Which provides the most pronounced wage-employment tradeoff?

Since workers today can move from city to city (quite easily) and from firm to firm (again, quite easily), it is unlikely that there are very many pure

Which of the following is a possible objective of labor unions?

In your textbook there is an exhibit that shows (for selected industries) the median weekly earnings of workers represented by labor unions and the median weekly earnings of workers not represented by labor unions. The point to be made by this comparison is that in some cases,

Exhibit 27-8 ​ -Refer to Exhibit 27-8. In the absence of collective bargaining, what wage rate would the profit-maximizing monoposonist pay?

Describe the difference between the "traditional" view of labor unions and the "labor union as a collective voice" view of labor unions with respect to the impact that labor unions have on productivity and efficiency.

The traditional (or orthodox) view of labor unions is that they

In collective bargaining,

Exhibit 27-8 ​ -Refer to Exhibit 27-8. What is the total wage bill of the profit- maximizing monoposonist?

Exhibit 27-7 ​ -Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 40 to 50 workers is

Unions typically argue that state right-to-work laws

Among the stated objectives of the National Collegiate Athletic Association (NCAA) regulations is to

It is possible for an increase in minimum wage to increase the number of workers hired in a competitive labor market, but not in a monopsony setting.

Exhibit 27-7 ​ -Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 20 to 30 workers is

Unions are interested in increasing the productivity of their members because as their productivity rises, the __________ their labor __________ and their wages __________.

A profit-maximizing monopsonist will pay a wage rate that is less than the marginal factor cost.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

The Distribution of Income and Poverty

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

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Filters

Exhibit 27-2 -Refer to Exhibit 27-2. The union wants management to believe the supply curve of labor is S'S instead of SS. What does supply curve S'S represent?

Exhibit 27-1 -Refer to Exhibit 27-l. Four demand curves for labor are displayed: D₁, D₂, D₃, and D₄. Which provides the most pronounced wage-employment tradeoff?

Exhibit 27-8 -Refer to Exhibit 27-8. In the absence of collective bargaining, what wage rate would the profit-maximizing monoposonist pay?

Exhibit 27-8 -Refer to Exhibit 27-8. What is the total wage bill of the profit- maximizing monoposonist?

Exhibit 27-7 -Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 40 to 50 workers is

Exhibit 27-7 -Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 20 to 30 workers is

Unions are interested in increasing the productivity of their members because as their productivity rises, the their labor and their wages __.