Question 1

Exhibit 27-10
​
  
-Refer to Exhibit 27-10. If the firm in the exhibit is a monopsony, then the curve represented by the number 1 is its

Accepted Answer

A) factor supply curve. 
B) marginal factor cost curve. 
C) marginal revenue product curve. 
D) marginal cost curve. 
E) average fixed cost curve. 
A) factor supply curve. 
B) marginal factor cost curve. 
C) marginal revenue product curve. 
D) marginal cost curve. 
E) average fixed cost curve.

Question 2

Which of the following statements is true?

Accepted Answer

A) The fewer the substitute factors for union labor, the higher the elasticity of demand for union labor, and the smaller the cutback in union labor for any given wage increase. 
B) The fewer the substitute factors for union labor, the lower the elasticity of demand for union labor, and the larger the cutback in union labor for any given wage increase. 
C) The more the substitute factors for union labor, the higher the elasticity of demand for union labor, and the smaller the cutback in union labor for any given wage increase. 
D) The more the substitute factors for union labor, the higher the elasticity of demand for union labor, and the larger the cutback in union labor for any given wage increase. 
E) none of the above 
A) The fewer the substitute factors for union labor, the higher the elasticity of demand for union labor, and the smaller the cutback in union labor for any given wage increase. 
B) The fewer the substitute factors for union labor, the lower the elasticity of demand for union labor, and the larger the cutback in union labor for any given wage increase. 
C) The more the substitute factors for union labor, the higher the elasticity of demand for union labor, and the smaller the cutback in union labor for any given wage increase. 
D) The more the substitute factors for union labor, the higher the elasticity of demand for union labor, and the larger the cutback in union labor for any given wage increase. 
E) none of the above

Question 3

When firm A hires one worker it pays $10 an hour and its total labor cost is $10. When it hires a second worker, it has to pay $11 to each of its two workers and its total labor cost is $22. When it hires a third worker, it has to pay $12 to each of its three workers and its total labor cost is $36. For firm A,

Accepted Answer

A) its marginal factor cost is greater than the wage rate it pays, except for the first worker it hires. 
B) its marginal factor cost is greater than the wage rate it pays, except for the first two workers it hires. 
C) its supply curve of labor lies above its marginal factor cost curve. 
D) it is likely that marginal revenue product is always greater than marginal factor cost. 
E) none of the above 
A) its marginal factor cost is greater than the wage rate it pays, except for the first worker it hires. 
B) its marginal factor cost is greater than the wage rate it pays, except for the first two workers it hires. 
C) its supply curve of labor lies above its marginal factor cost curve. 
D) it is likely that marginal revenue product is always greater than marginal factor cost. 
E) none of the above

Question 4

Exhibit 27-11
​
  
-Refer to Exhibit 27-11. The firm in the exhibit is a monopsony. We have deliberately not identified the three curves in the exhibit. They are simply curves 1, 2, and 3. If (union) collective bargaining with the monopsony guarantees the wage rate that workers will be paid is W2, then the factor supply curve is

Accepted Answer

A) curve 2. 
B) curve 3. 
C) the curve that starts at W2, goes to point B, then down to point C, then moves up curve 2. 
D) the curve that starts at W2, goes to point D, and then moves up curve 2. 
E) the curve that starts at W2 and goes to point D. 
A) curve 2. 
B) curve 3. 
C) the curve that starts at W2, goes to point B, then down to point C, then moves up curve 2. 
D) the curve that starts at W2, goes to point D, and then moves up curve 2. 
E) the curve that starts at W2 and goes to point D.

Question 5

Union training programs are meant to shift the __________ labor to the __________.

Accepted Answer

A) demand curve for; left 
B) demand curve for; right 
C) supply curve of; left 
D) supply curve of; right 
A) demand curve for; left 
B) demand curve for; right 
C) supply curve of; left 
D) supply curve of; right

Question 6

Exhibit 27-8
​
  
-Refer to Exhibit 27-8. If the monopsonist could perfectly discriminate by paying each worker a different wage rate, the number of workers employed would be

Accepted Answer

A) Q1. 
B) Q2. 
C) Q3. 
D) Q4. 
E) Q5. 
A) Q1. 
B) Q2. 
C) Q3. 
D) Q4. 
E) Q5.

Question 7

Two possible ways to increase union wages indirectly are to increase the demand for union labor or increase the supply of union labor.

Accepted Answer

A) True 
 B)False

Question 8

An American labor union worker has a picket sign that reads "Say No to Tokyo, Buy American." Most likely, the worker is trying to

Accepted Answer

A) increase the price of substitute factors. 
B) decrease the price of substitute factors. 
C) increase demand for the product he or she produces. 
D) increase his marginal physical product. 
E) increase the availability of substitutes for the product he or she produces. 
A) increase the price of substitute factors. 
B) decrease the price of substitute factors. 
C) increase demand for the product he or she produces. 
D) increase his marginal physical product. 
E) increase the availability of substitutes for the product he or she produces.

Question 9

Labor unions try to meet their objectives by influencing the elasticity of demand for labor and the demand for labor. To influence these factors, they try to do all of the following except

Accepted Answer

A) reduce the availability of substitutes for the product they produce. 
B) reduce the availability of substitute factors. 
C) increase demand for the product they produce. 
D) increase substitute factor prices. 
E) reduce the nonmoney benefits of substitute factors. 
A) reduce the availability of substitutes for the product they produce. 
B) reduce the availability of substitute factors. 
C) increase demand for the product they produce. 
D) increase substitute factor prices. 
E) reduce the nonmoney benefits of substitute factors.

Question 10

If a firm is a monopsonist, then it faces

Accepted Answer

A) a downward sloping demand curve for its product, and its marginal revenue curve will lie below its demand curve. 
B) a horizontal marginal factor cost curve. 
C) an upward sloping factor supply curve, and its marginal factor cost curve will lie above the factor supply curve. 
D) an upward sloping factor supply curve, and its marginal factor cost curve will coincide with the factor supply curve. 
E) an upward-sloping factor supply curve, and its marginal factor cost curve will lie below the factor supply curve. 
A) a downward sloping demand curve for its product, and its marginal revenue curve will lie below its demand curve. 
B) a horizontal marginal factor cost curve. 
C) an upward sloping factor supply curve, and its marginal factor cost curve will lie above the factor supply curve. 
D) an upward sloping factor supply curve, and its marginal factor cost curve will coincide with the factor supply curve. 
E) an upward-sloping factor supply curve, and its marginal factor cost curve will lie below the factor supply curve.

Question 11

The supply curve of labor that an employer faces can be changed through successful collective bargaining by a labor union.

Accepted Answer

A) True 
 B)False

Question 12

A union shop is an organization that

Accepted Answer

A) requires individuals to join a union within a certain period of time after becoming employed. 
B) requires individuals to be members of the union before they can be hired. 
C) is legal in all fifty states. 
D) is set up by labor unions to train new entrants and inform members of jobs in different states. 
E) a and c 
A) requires individuals to join a union within a certain period of time after becoming employed. 
B) requires individuals to be members of the union before they can be hired. 
C) is legal in all fifty states. 
D) is set up by labor unions to train new entrants and inform members of jobs in different states. 
E) a and c

Question 13

Exhibit 27-12
  
-Refer to Exhibit 27-12. The profit-maximizing number of workers to hire for this firm is

Accepted Answer

A) 2. 
B) 3. 
C) 4. 
D) 5. 
E) 6. 
A) 2. 
B) 3. 
C) 4. 
D) 5. 
E) 6.

Question 14

Some economists contend that the National Collegiate Athletic Association (NCAA) imposes its rules and regulations to keep college sports nonprofessional and in relatively high demand.

Accepted Answer

A) True 
 B)False

Question 15

Exhibit 27-7
​
  
-Refer to Exhibit 27-7. As the firm increases employment from 50 to 60 workers, by how much does total labor cost increase?

Accepted Answer

A) $210 
B) $40 
C) $10 
D) $230 
A) $210 
B) $40 
C) $10 
D) $230

Question 16

For a union to be successful in increasing the total wage bill received by its members by forcing up the wage rate, the demand curve for labor needs to be

Accepted Answer

A) elastic. 
B) perfectly elastic. 
C) unitary elastic. 
D) inelastic. 
A) elastic. 
B) perfectly elastic. 
C) unitary elastic. 
D) inelastic.

Question 17

In the case of a monopsony, higher wage rates (over some range) do not necessarily imply fewer persons working.

Accepted Answer

A) True 
 B)False

Question 18

If, through collective bargaining, a union is able to raise the wage above the existing competitive equilibrium wage,

Accepted Answer

A) fewer workers will be employed than before the wage increase. 
B) more workers will be employed than before the wage increase. 
C) the same number of workers will be employed as before the wage increase. 
D) the number of workers that will be employed is not related to the wage increase. 
A) fewer workers will be employed than before the wage increase. 
B) more workers will be employed than before the wage increase. 
C) the same number of workers will be employed as before the wage increase. 
D) the number of workers that will be employed is not related to the wage increase.

Question 19

If a monopsonist is hiring factors, it will choose to hire that quantity of labor at which __________ and pay a wage rate that is __________.

Accepted Answer

A) MR = MC; equal to labor's MRP 
B) the supply curve of labor intersects the demand curve for labor; equal to labor's MRP 
C) MRP = MFC; equal to labor's MRP 
D) MRP = MFC; less than labor's MRP 
E) the supply curve of labor intersects the demand curve for labor; less than MFC 
A) MR = MC; equal to labor's MRP 
B) the supply curve of labor intersects the demand curve for labor; equal to labor's MRP 
C) MRP = MFC; equal to labor's MRP 
D) MRP = MFC; less than labor's MRP 
E) the supply curve of labor intersects the demand curve for labor; less than MFC

Question 20

Successful collective bargaining (on the part of a labor union) will

Accepted Answer

A) increase the demand for labor. 
B) decrease the demand for labor. 
C) change the marginal physical product of labor. 
D) a and c 
E) none of the above 
A) increase the demand for labor. 
B) decrease the demand for labor. 
C) change the marginal physical product of labor. 
D) a and c 
E) none of the above

Exam 27: Wages Unions and Labor

Exhibit 27-10 ​ -Refer to Exhibit 27-10. If the firm in the exhibit is a monopsony, then the curve represented by the number 1 is its

Which of the following statements is true?

Union training programs are meant to shift the __________ labor to the __________.

Exhibit 27-8 ​ -Refer to Exhibit 27-8. If the monopsonist could perfectly discriminate by paying each worker a different wage rate, the number of workers employed would be

Two possible ways to increase union wages indirectly are to increase the demand for union labor or increase the supply of union labor.

An American labor union worker has a picket sign that reads "Say No to Tokyo, Buy American." Most likely, the worker is trying to

Labor unions try to meet their objectives by influencing the elasticity of demand for labor and the demand for labor. To influence these factors, they try to do all of the following except

If a firm is a monopsonist, then it faces

The supply curve of labor that an employer faces can be changed through successful collective bargaining by a labor union.

A union shop is an organization that

Exhibit 27-12 -Refer to Exhibit 27-12. The profit-maximizing number of workers to hire for this firm is

Some economists contend that the National Collegiate Athletic Association (NCAA) imposes its rules and regulations to keep college sports nonprofessional and in relatively high demand.

Exhibit 27-7 ​ -Refer to Exhibit 27-7. As the firm increases employment from 50 to 60 workers, by how much does total labor cost increase?

For a union to be successful in increasing the total wage bill received by its members by forcing up the wage rate, the demand curve for labor needs to be

In the case of a monopsony, higher wage rates (over some range) do not necessarily imply fewer persons working.

If, through collective bargaining, a union is able to raise the wage above the existing competitive equilibrium wage,

If a monopsonist is hiring factors, it will choose to hire that quantity of labor at which __________ and pay a wage rate that is __________.

Successful collective bargaining (on the part of a labor union) will

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Exhibit 27-10 -Refer to Exhibit 27-10. If the firm in the exhibit is a monopsony, then the curve represented by the number 1 is its

Union training programs are meant to shift the labor to the .

Exhibit 27-8 -Refer to Exhibit 27-8. If the monopsonist could perfectly discriminate by paying each worker a different wage rate, the number of workers employed would be

Exhibit 27-7 -Refer to Exhibit 27-7. As the firm increases employment from 50 to 60 workers, by how much does total labor cost increase?

If a monopsonist is hiring factors, it will choose to hire that quantity of labor at which and pay a wage rate that is .