Question 1

Exhibit 27-12
  
-Refer to Exhibit 27-12. For each quantity of labor hired (after the first worker), marginal factor cost will be

Accepted Answer

A) less than the corresponding amount in column (2). 
B) greater than the corresponding amount in column (2). 
C) less than the corresponding amount in column (3). 
D) greater than the corresponding amount in column (3). 
E) b and d 
A) less than the corresponding amount in column (2). 
B) greater than the corresponding amount in column (2). 
C) less than the corresponding amount in column (3). 
D) greater than the corresponding amount in column (3). 
E) b and d

Question 2

A possible objective of labor unions is

Accepted Answer

A) employment for all their members. 
B) minimizing the total wage bill. 
C) maximizing income for all union members. 
D) all of the above 
E) none of the above 
A) employment for all their members. 
B) minimizing the total wage bill. 
C) maximizing income for all union members. 
D) all of the above 
E) none of the above

Question 3

To decrease the supply of its labor, a union might argue against right-to-work laws.

Accepted Answer

A) True 
 B)False

Question 4

Labor unions have caused

Accepted Answer

A) the fraction of national income that goes to labor (union and nonunion, combined) to increase. 
B) the fraction of national income that goes to labor (union and nonunion, combined) to decrease. 
C) almost no change in the fraction of national income that goes to labor (union and nonunion, combined). 
D) the fraction of national income that goes to profits to rise. 
A) the fraction of national income that goes to labor (union and nonunion, combined) to increase. 
B) the fraction of national income that goes to labor (union and nonunion, combined) to decrease. 
C) almost no change in the fraction of national income that goes to labor (union and nonunion, combined). 
D) the fraction of national income that goes to profits to rise.

Question 5

Exhibit 27-5
​
  
-Refer to Exhibit 27-5. In case (1), with a rise in the wage rate from W1 to W2, the wage bill will fall if

Accepted Answer

A) (Q1 - Q2) x W1 > (W2 - W1) x Q2. 
B) (Q3 - Q2) x W3 > (W2 - W3) x Q2. 
C) W2 x Q2 > Q3 x W1. 
D) (W1 - W3) x Q2 > (W2 - W1) x Q2. 
A) (Q1 - Q2) x W1 > (W2 - W1) x Q2. 
B) (Q3 - Q2) x W3 > (W2 - W3) x Q2. 
C) W2 x Q2 > Q3 x W1. 
D) (W1 - W3) x Q2 > (W2 - W1) x Q2.

Question 6

Which of the following statements is false?

Accepted Answer

A) For the monopsonist, marginal factor cost decreases as it buys additional units of a factor. 
B) For the monopsonist, the supply curve of the factor it buys is different from the marginal factor cost curve. 
C) The monopsonist buys that quantity of a factor at which marginal revenue product equals marginal factor cost. 
D) The monopsonist pays its factors a dollar amount less than its marginal factor cost. 
A) For the monopsonist, marginal factor cost decreases as it buys additional units of a factor. 
B) For the monopsonist, the supply curve of the factor it buys is different from the marginal factor cost curve. 
C) The monopsonist buys that quantity of a factor at which marginal revenue product equals marginal factor cost. 
D) The monopsonist pays its factors a dollar amount less than its marginal factor cost.

Question 7

Exhibit 27-5
​
  
-Refer to Exhibit 27-5. In which case or cases does the increase in the wage rate from W1 to W2 definitely cause the total wage bill to rise?

Accepted Answer

A) (1) 
B) (2) 
C) (3) 
D) (1) and (2) 
E) (1) and (3) 
A) (1) 
B) (2) 
C) (3) 
D) (1) and (2) 
E) (1) and (3)

Question 8

A monopsonist firm faces an upward sloping supply of labor curve and its marginal factor cost curve lies below its labor supply curve.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not consistent with the view of labor unions as a collective voice?

Accepted Answer

A) Unions reduce job exiting. 
B) Labor productivity declines as a result of labor unions 
C) The worker turnover rate is reduced by labor unions. 
D) Workers feel more secure in their jobs as a result of labor unions. 
A) Unions reduce job exiting. 
B) Labor productivity declines as a result of labor unions 
C) The worker turnover rate is reduced by labor unions. 
D) Workers feel more secure in their jobs as a result of labor unions.

Question 10

Exhibit 27-12
  
-Refer to Exhibit 27-12. As the firm increases employment from 4 to 5 workers, its marginal factor cost (MFC) is

Accepted Answer

A) $13. 
B) $15. 
C) $5.60. 
D) $28. 
A) $13. 
B) $15. 
C) $5.60. 
D) $28.

Question 11

Exhibit 27-8
​
  
-Refer to Exhibit 27-8. An effective price floor set at W3 would

Accepted Answer

A) increase employment from Q1 to Q2. 
B) increase employment from Q3 to Q4. 
C) decrease employment from Q5 to Q2. 
D) decrease employment from Q5 to Q4. 
A) increase employment from Q1 to Q2. 
B) increase employment from Q3 to Q4. 
C) decrease employment from Q5 to Q2. 
D) decrease employment from Q5 to Q4.

Question 12

Exhibit 27-10
​
  
-Refer to Exhibit 27-10. If the firm in the exhibit is a monopsony, then the curve represented by the number 2 is its __________ curve, and the curve represented by the number 3 is its __________ curve.

Accepted Answer

A) marginal factor cost; factor supply 
B) factor supply; marginal revenue product 
C) marginal revenue product; average total cost 
D) marginal cost; marginal factor cost 
E) factor supply; marginal factor cost 
A) marginal factor cost; factor supply 
B) factor supply; marginal revenue product 
C) marginal revenue product; average total cost 
D) marginal cost; marginal factor cost 
E) factor supply; marginal factor cost

Question 13

If a union seeks to maximize the total wage bill received by its members, then it should negotiate the

Accepted Answer

A) highest possible wage rate. 
B) wage rate at which all of its members are employed. 
C) wage rate that maximizes the firm's profits. 
D) wage rate at which the elasticity of demand for workers is 1. 
E) wage rate at which the elasticity of demand for workers is at its highest. 
A) highest possible wage rate. 
B) wage rate at which all of its members are employed. 
C) wage rate that maximizes the firm's profits. 
D) wage rate at which the elasticity of demand for workers is 1. 
E) wage rate at which the elasticity of demand for workers is at its highest.

Question 14

Which of the following will reduce the cutback in union labor for a given wage increase?

Accepted Answer

A) an increase in the number of substitutes for union labor 
B) an increase in the elasticity of demand for the product that labor produces 
C) a decrease in the elasticity of demand for the product that labor produces 
D) an increase in the total revenue for the product that labor produces 
E) a decrease in the total revenue for the product that labor produces 
A) an increase in the number of substitutes for union labor 
B) an increase in the elasticity of demand for the product that labor produces 
C) a decrease in the elasticity of demand for the product that labor produces 
D) an increase in the total revenue for the product that labor produces 
E) a decrease in the total revenue for the product that labor produces

Question 15

A closed shop is an organization

Accepted Answer

A) that is closed on holidays. 
B) in which an employee must belong to the union before he or she can work. 
C) that does not require workers to be union members in order to be hired, but does require them to join the union within a certain period of time after becoming employed. 
D) set up by the federal government to train ex-convicts to become productive workers. 
E) none of the above 
A) that is closed on holidays. 
B) in which an employee must belong to the union before he or she can work. 
C) that does not require workers to be union members in order to be hired, but does require them to join the union within a certain period of time after becoming employed. 
D) set up by the federal government to train ex-convicts to become productive workers. 
E) none of the above

Question 16

Exhibit 27-5
​
  
-Refer to Exhibit 27-5. In which of the following cases has the increase in the wage from W1 to W2 been brought about by a country-wide legalization of union shops?

Accepted Answer

A) (1) 
B) (2) 
C) (3) 
D) none of the above 
A) (1) 
B) (2) 
C) (3) 
D) none of the above

Question 17

If a labor union successfully practices collective bargaining against a monopsonist, then

Accepted Answer

A) product price will decrease. 
B) both wages and employment may rise. 
C) both wages and employment may fall. 
D) workers will probably receive a wage further away from their marginal revenue products. 
E) b and d 
A) product price will decrease. 
B) both wages and employment may rise. 
C) both wages and employment may fall. 
D) workers will probably receive a wage further away from their marginal revenue products. 
E) b and d

Question 18

Some economists refer to a monopsony as a

Accepted Answer

A) factor price taker. 
B) factor buyer. 
C) buyer's monopoly. 
D) single-price monopolist. 
E) Economists don't refer to a monopsony as anything other than a monopsony. 
A) factor price taker. 
B) factor buyer. 
C) buyer's monopoly. 
D) single-price monopolist. 
E) Economists don't refer to a monopsony as anything other than a monopsony.

Question 19

What is the difference between a union shop and a closed shop? Are either (or both) legal in the United States?

Accepted Answer

A closed shop is an organization in whic

Question 20

If a labor union wanted to employ all its membership it would most likely negotiate for a __________ than if it wanted to maximize the income of a limited number of union members.

Accepted Answer

A) wage that discounted for fixed costs 
B) higher wage 
C) wage that accounted for a percentage of sales revenues 
D) lower wage 
E) none of the above 
A) wage that discounted for fixed costs 
B) higher wage 
C) wage that accounted for a percentage of sales revenues 
D) lower wage 
E) none of the above

Exam 27: Wages Unions and Labor

Exhibit 27-12 -Refer to Exhibit 27-12. For each quantity of labor hired (after the first worker), marginal factor cost will be

A possible objective of labor unions is

To decrease the supply of its labor, a union might argue against right-to-work laws.

Labor unions have caused

Exhibit 27-5 ​ -Refer to Exhibit 27-5. In case (1), with a rise in the wage rate from W1 to W2, the wage bill will fall if

Which of the following statements is false?

Exhibit 27-5 ​ -Refer to Exhibit 27-5. In which case or cases does the increase in the wage rate from W1 to W2 definitely cause the total wage bill to rise?

A monopsonist firm faces an upward sloping supply of labor curve and its marginal factor cost curve lies below its labor supply curve.

Which of the following is not consistent with the view of labor unions as a collective voice?

Exhibit 27-12 -Refer to Exhibit 27-12. As the firm increases employment from 4 to 5 workers, its marginal factor cost (MFC) is

Exhibit 27-8 ​ -Refer to Exhibit 27-8. An effective price floor set at W3 would

Exhibit 27-10 ​ -Refer to Exhibit 27-10. If the firm in the exhibit is a monopsony, then the curve represented by the number 2 is its __________ curve, and the curve represented by the number 3 is its __________ curve.

If a union seeks to maximize the total wage bill received by its members, then it should negotiate the

Which of the following will reduce the cutback in union labor for a given wage increase?

A closed shop is an organization

Exhibit 27-5 ​ -Refer to Exhibit 27-5. In which of the following cases has the increase in the wage from W1 to W2 been brought about by a country-wide legalization of union shops?

If a labor union successfully practices collective bargaining against a monopsonist, then

Some economists refer to a monopsony as a

What is the difference between a union shop and a closed shop? Are either (or both) legal in the United States?

If a labor union wanted to employ all its membership it would most likely negotiate for a __________ than if it wanted to maximize the income of a limited number of union members.

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

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

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Filters

Exhibit 27-5 -Refer to Exhibit 27-5. In case (1), with a rise in the wage rate from W₁ to W₂, the wage bill will fall if

Exhibit 27-5 -Refer to Exhibit 27-5. In which case or cases does the increase in the wage rate from W₁ to W₂ definitely cause the total wage bill to rise?

Exhibit 27-8 -Refer to Exhibit 27-8. An effective price floor set at W₃ would

Exhibit 27-10 -Refer to Exhibit 27-10. If the firm in the exhibit is a monopsony, then the curve represented by the number 2 is its curve, and the curve represented by the number 3 is its curve.

Exhibit 27-5 -Refer to Exhibit 27-5. In which of the following cases has the increase in the wage from W₁ to W₂ been brought about by a country-wide legalization of union shops?