Question 1

Which of the following statements concerning the isoprofit curve is false?

Accepted Answer

A)  Isoprofit curves cannot intersect each other. 
B)  Higher isoprofit curves represent lower levels of profits. 
C)  It shows all the wage-employment combinations that maximize profits. 
D)  It shows all the wage-employment combinations that yield the same level of profit for a firm. 
E)  It crosses the maximum point of the labour demand curve. 
A)  Isoprofit curves cannot intersect each other. 
B)  Higher isoprofit curves represent lower levels of profits. 
C)  It shows all the wage-employment combinations that maximize profits. 
D)  It shows all the wage-employment combinations that yield the same level of profit for a firm. 
E)  It crosses the maximum point of the labour demand curve. C

Question 2

An efficient contract (in the Pareto sense) occurs at the:

Accepted Answer

A)  point of tangency between the firm's isoprofit curve and the labour demand curve. 
B)  point of tangency between the union's iso-utility (or indifference) curve and the isoquants of the firm. 
C)  point of tangency between the union's iso-utility (or indifference) curve and the isoprofit curve. 
D)  point on the labour demand curve corresponding to the alternative wage. 
E)  point of intersection between the firm's isoprofit curve and the labour demand curve. 
A)  point of tangency between the firm's isoprofit curve and the labour demand curve. 
B)  point of tangency between the union's iso-utility (or indifference) curve and the isoquants of the firm. 
C)  point of tangency between the union's iso-utility (or indifference) curve and the isoprofit curve. 
D)  point on the labour demand curve corresponding to the alternative wage. 
E)  point of intersection between the firm's isoprofit curve and the labour demand curve. C

Question 3

The median voter model pertains to which of the following aspects of analyzing union behaviour?

Accepted Answer

A)  Determining the constraints under which the union negotiates 
B)  Establishing an efficient contract 
C)  Determining the effective supply of labour 
D)  Determining the preferences of the union 
E)  Determining the bargaining strategy 
A)  Determining the constraints under which the union negotiates 
B)  Establishing an efficient contract 
C)  Determining the effective supply of labour 
D)  Determining the preferences of the union 
E)  Determining the bargaining strategy D

Question 4

A union would be more effective at bargaining a wage increase for its members:

Accepted Answer

A)  if the share of labour costs in total costs is greater 
B)  if the product demand is less elastic 
C)  if the degree of substitutability between labour and capital is greater 
D)  if the product demand is less responsive to a wage change. 
E)  if the supply of capital.is more elastic 
A)  if the share of labour costs in total costs is greater 
B)  if the product demand is less elastic 
C)  if the degree of substitutability between labour and capital is greater 
D)  if the product demand is less responsive to a wage change. 
E)  if the supply of capital.is more elastic

Question 5

If the labour union acts to maximize the economic rent that its members receive, what will happen to employment and wages?

Accepted Answer

A)  Wage will be lower than in the case of the absence of a labour union. 
B)  Employment will be lower than in the case of the absence of a labour union. 
C)  We cannot tell what the effect on employment would be, but wages will be higher than they would be in the absence of a union 
D)  Employment will be higher than in the case of the absence of a labour union. 
E)  We cannot tell what the effect on wages would be, but employment will be higher than it would be in the absence of a union 
A)  Wage will be lower than in the case of the absence of a labour union. 
B)  Employment will be lower than in the case of the absence of a labour union. 
C)  We cannot tell what the effect on employment would be, but wages will be higher than they would be in the absence of a union 
D)  Employment will be higher than in the case of the absence of a labour union. 
E)  We cannot tell what the effect on wages would be, but employment will be higher than it would be in the absence of a union

Question 6

Approximately what percentage of Canadian paid workers was unionized in 2010?

Accepted Answer

A)  40% 
B)  10% 
C)  60% 
D)  50% 
E)  30% 
A)  40% 
B)  10% 
C)  60% 
D)  50% 
E)  30%

Question 7

The evidence regarding the decline in unionization in Canada has indicated that:

Accepted Answer

A)  there has been a fall in the likelihood that a worker with a given set of characteristics will be unionized. 
B)  shifts in the industrial and occupational composition of the labour force can explain it. 
C)  shifts in the demographic composition of the labour force can explain it. 
D)  workers find it easier to move between industries and countries. 
E)  this trend has occurred in almost all countries. 
A)  there has been a fall in the likelihood that a worker with a given set of characteristics will be unionized. 
B)  shifts in the industrial and occupational composition of the labour force can explain it. 
C)  shifts in the demographic composition of the labour force can explain it. 
D)  workers find it easier to move between industries and countries. 
E)  this trend has occurred in almost all countries.

Question 8

Which of the following types of economic behaviour best characterizes a labour union's function?

Accepted Answer

A)  Monopsony 
B)  Price-taking 
C)  Monopolistic Competition 
D)  Oligopoly 
E)  Monopoly 
A)  Monopsony 
B)  Price-taking 
C)  Monopolistic Competition 
D)  Oligopoly 
E)  Monopoly

Question 9

Which of the following countries has the highest union density?

Accepted Answer

A)  Japan 
B)  Canada 
C)  United Kingdom 
D)  France 
E)  United States 
A)  Japan 
B)  Canada 
C)  United Kingdom 
D)  France 
E)  United States

Question 10

Over the past 60 years in Canada, the growth in labour unions has tended to be characterized by:

Accepted Answer

A)  a negative but erratic trend. 
B)  a steadily positive trend. 
C)  a steadily negative trend. 
D)  relative stability. 
E)  a positive but erratic trend. 
A)  a negative but erratic trend. 
B)  a steadily positive trend. 
C)  a steadily negative trend. 
D)  relative stability. 
E)  a positive but erratic trend.

Question 11

Which of the following statements regarding efficient contracts is false?

Accepted Answer

A)  Efficient contacts are often associated with work rules. 
B)  Efficient contracts typically involve excessive staffing levels. 
C)  Given an efficient contract, it is impossible to make one party better off without making the other party worse off. 
D)  The set of efficient contracts is relevant for the "right-to-manage" bargaining regime. 
E)  The set of efficient contracts lies to the right of the labour demand curve. 
A)  Efficient contacts are often associated with work rules. 
B)  Efficient contracts typically involve excessive staffing levels. 
C)  Given an efficient contract, it is impossible to make one party better off without making the other party worse off. 
D)  The set of efficient contracts is relevant for the "right-to-manage" bargaining regime. 
E)  The set of efficient contracts lies to the right of the labour demand curve.

Question 12

The costs to workers of unionization include all of the following, except:

Accepted Answer

A)  time devoted to union activities. 
B)  higher taxes. 
C)  the possibility of a pay settlement that is not in the interests of certain members of the union. 
D)  loss of pay during job action and strikes. 
E)  union dues. 
A)  time devoted to union activities. 
B)  higher taxes. 
C)  the possibility of a pay settlement that is not in the interests of certain members of the union. 
D)  loss of pay during job action and strikes. 
E)  union dues.

Question 13

A plumber's union is an example of:

Accepted Answer

A)  a craft union. 
B)  a public employee union. 
C)  an industrial union. 
D)  an employee association. 
E)  a professional association. 
A)  a craft union. 
B)  a public employee union. 
C)  an industrial union. 
D)  an employee association. 
E)  a professional association.

Question 14

Assume that a labour strike ends and that the labour union is successful in negotiating a substantial raise in pay for its workers. Concerns are raised about the motivation of the union and the negative employment consequences of the expensive labour contract.
• Discuss the various possible objectives for the union. There are a number of alternative hypotheses concerning the variable that the union seeks to maximize.
• It is time for you to put on your anti-union hat. The opponents of labour unions typically cite the labour demand curve model to support their claim that the union is destroying jobs. You should present a graph.
• Now it is time for you to put on your pro-union hat. Supporters of unions cite the efficient contract model to support the proposition that unions do not destroy jobs when they bargain for higher wages. If anything, they create jobs. Your analysis should include a graph, and you should clearly distinguish the implications that flow from this model from those that flow from the preceding one (the labour demand curve model). If the wage increase does not arise at the expense of employment, then what variable does the wage increase impinge on?
• As is often the case in this textbook, we are confronted with a series of models which give conflicting predictions. We have to appeal to empirical research in order to answer the question of whether unions bargain solely for higher wages, solely for higher employment levels, or perhaps for some other objective. What does the limited empirical evidence obtained thus far indicate? There is
no need to go into the technical details.
• Assume that the labour demand model does apply after all, which places a constraint on the union's bargaining power. Does the union have any other course of action which could mitigate the disemployment effects associated with a negotiated wage increase? If so, explain.

Accepted Answer

•	Union objectives refer to the goals of

Question 15

Which of the following statements is false?

Accepted Answer

A)  Inefficient work rules that hamper productivity come at the expense of the firm's profits. 
B)  The firm is indifferent between the various wage/employment combinations that exist along the contract curve. 
C)  The union prefers higher iso-utility or indifference curves to lower ones. 
D)  The labour demand curve intersects isoprofit curves at their maximum points. 
E)  The contract curve does not exist if the product market in which the firm operates is perfectly competitive. 
A)  Inefficient work rules that hamper productivity come at the expense of the firm's profits. 
B)  The firm is indifferent between the various wage/employment combinations that exist along the contract curve. 
C)  The union prefers higher iso-utility or indifference curves to lower ones. 
D)  The labour demand curve intersects isoprofit curves at their maximum points. 
E)  The contract curve does not exist if the product market in which the firm operates is perfectly competitive.

Question 16

The primary mechanism by which industrial unions typically increase wage rates is:

Accepted Answer

A)  increasing the demand for labour of the firm. 
B)  imposing a wage rate above the equilibrium rate on the firm. 
C)  increasing the supply of labour of the firm. 
D)  decreasing the demand for labour of the firm. 
A)  increasing the demand for labour of the firm. 
B)  imposing a wage rate above the equilibrium rate on the firm. 
C)  increasing the supply of labour of the firm. 
D)  decreasing the demand for labour of the firm.

Question 17

The objective of lengthy and demanding entrance procedures to join a union or a professional group is to:

Accepted Answer

A)  shift the labour demand curve to the left. 
B)  shift the labour supply curve to the right. 
C)  shift the labour supply curve to the left. 
D)  shift the labour demand curve to the right. 
E)  directly raise the wage that union members receive. 
A)  shift the labour demand curve to the left. 
B)  shift the labour supply curve to the right. 
C)  shift the labour supply curve to the left. 
D)  shift the labour demand curve to the right. 
E)  directly raise the wage that union members receive.

Question 18

If a firm operates in a competitive output market, then the higher wages negotiated by a union must:

Accepted Answer

A)  lead to a Pareto-efficient contractl 
B)  cause it to pass on the cost of the higher wages to its customers in the form of higher product prices. 
C)  reduce the level of employment at the firm. 
D)  push the firm off of its labour demand curve and onto the contract curve. 
E)  increase the level of employment at the firm. 
A)  lead to a Pareto-efficient contractl 
B)  cause it to pass on the cost of the higher wages to its customers in the form of higher product prices. 
C)  reduce the level of employment at the firm. 
D)  push the firm off of its labour demand curve and onto the contract curve. 
E)  increase the level of employment at the firm.

Question 19

The bargaining power that a union has is most closely related to:

Accepted Answer

A)  the quantity demanded of labour. 
B)  the elasticity of labour supply. 
C)  the size of the bargaining unit. 
D)  the elasticity of labour demand. 
E)  the quantity supplied of labour. 
A)  the quantity demanded of labour. 
B)  the elasticity of labour supply. 
C)  the size of the bargaining unit. 
D)  the elasticity of labour demand. 
E)  the quantity supplied of labour.

Question 20

Which of the following statements regarding union incidence rates between 2000 and 2005 is true?

Accepted Answer

A)  They rose in both the U.S. and in Canada. 
B)  They were higher in the U.S. than they were in Canada. 
C)  They declined in both the U.S. and in Canada. 
D)  They declined in the U.S. but rose in Canada. 
E)  They declined in Canada but rose in the U.S. 
A)  They rose in both the U.S. and in Canada. 
B)  They were higher in the U.S. than they were in Canada. 
C)  They declined in both the U.S. and in Canada. 
D)  They declined in the U.S. but rose in Canada. 
E)  They declined in Canada but rose in the U.S.

Which of the following statements concerning the isoprofit curve is false?

An efficient contract (in the Pareto sense) occurs at the:

The median voter model pertains to which of the following aspects of analyzing union behaviour?

A union would be more effective at bargaining a wage increase for its members:

If the labour union acts to maximize the economic rent that its members receive, what will happen to employment and wages?

Approximately what percentage of Canadian paid workers was unionized in 2010?

The evidence regarding the decline in unionization in Canada has indicated that:

Which of the following types of economic behaviour best characterizes a labour union's function?

Which of the following countries has the highest union density?

Over the past 60 years in Canada, the growth in labour unions has tended to be characterized by:

Which of the following statements regarding efficient contracts is false?

The costs to workers of unionization include all of the following, except:

A plumber's union is an example of:

Which of the following statements is false?

The primary mechanism by which industrial unions typically increase wage rates is:

The objective of lengthy and demanding entrance procedures to join a union or a professional group is to:

If a firm operates in a competitive output market, then the higher wages negotiated by a union must:

The bargaining power that a union has is most closely related to:

Which of the following statements regarding union incidence rates between 2000 and 2005 is true?

Labour Supply: Individual Attachment to the Labour Market

Labour Supply and Public Policy: Work Incentive Effects of Alternative Income Maintenance Schemes

Labour Supply Over the Life Cycle

Demand for Labour in Competitive Labour Markets

Labour Demand, Non-Wage Benefits, and Quasi-Fixed Costs

Wages and Employment in a Single Labour Market

Compensating Wage Differentials

Human Capital Theory: Applications to Education and Training

Wage Structures Across Markets

The Economics of Immigration

Discrimination and Male-Female Earnings Differentials

Optimal Compensation Systems, Deferred Compensation, and Mandatory Retirement

Union Impact on Wage and Non-Wage Outcomes

Unemployment: Meaning, Measurement, and Canadas Experience

Unemployment: Causes and Consequences

Filters

Exam 14: Unions and Collective Bargaining

Which of the following statements concerning the isoprofit curve is false?

An efficient contract (in the Pareto sense) occurs at the:

The median voter model pertains to which of the following aspects of analyzing union behaviour?

A union would be more effective at bargaining a wage increase for its members:

If the labour union acts to maximize the economic rent that its members receive, what will happen to employment and wages?

Approximately what percentage of Canadian paid workers was unionized in 2010?

The evidence regarding the decline in unionization in Canada has indicated that:

Which of the following types of economic behaviour best characterizes a labour union's function?

Which of the following countries has the highest union density?

Over the past 60 years in Canada, the growth in labour unions has tended to be characterized by:

Which of the following statements regarding efficient contracts is false?

The costs to workers of unionization include all of the following, except:

A plumber's union is an example of:

Which of the following statements is false?

The primary mechanism by which industrial unions typically increase wage rates is:

The objective of lengthy and demanding entrance procedures to join a union or a professional group is to:

If a firm operates in a competitive output market, then the higher wages negotiated by a union must:

The bargaining power that a union has is most closely related to:

Which of the following statements regarding union incidence rates between 2000 and 2005 is true?

Labour Supply: Individual Attachment to the Labour Market

Labour Supply and Public Policy: Work Incentive Effects of Alternative Income Maintenance Schemes

Labour Supply Over the Life Cycle

Demand for Labour in Competitive Labour Markets

Labour Demand, Non-Wage Benefits, and Quasi-Fixed Costs

Wages and Employment in a Single Labour Market

Compensating Wage Differentials

Human Capital Theory: Applications to Education and Training

Wage Structures Across Markets

The Economics of Immigration

Discrimination and Male-Female Earnings Differentials

Optimal Compensation Systems, Deferred Compensation, and Mandatory Retirement

Union Impact on Wage and Non-Wage Outcomes

Unemployment: Meaning, Measurement, and Canadas Experience

Unemployment: Causes and Consequences

Filters