Question 1

Since the mid-1950s, union membership has declined as a percentage of employed wage and salary workers.

Accepted Answer

A) True 
 B)False  False

Question 2

One reason for the high wage rates in the United States and other advanced economies is the high productivity of labor in these countries.

Accepted Answer

A) True 
 B)False  True

Question 3

A firm operating in a purely competitive labor market has the marginal revenue product schedule shown in the table.   If the wage rate decreases from $22.50 to $21.50, by how much will the firm expand employment?

Accepted Answer

A) 2 workers 
B) 3 workers 
C) 0 workers 
D) 1 worker 
A) 2 workers 
B) 3 workers 
C) 0 workers 
D) 1 worker D

Question 4

Assume that your nominal wage was fixed at $15 an hour, and the price index rose from 100 to 105. In this case, your real wage has

Accepted Answer

A) decreased to $10. 
B) increased to $15.75. 
C) decreased to $14.29. 
D) increased to $20. 
A) decreased to $10. 
B) increased to $15.75. 
C) decreased to $14.29. 
D) increased to $20.

Question 5

Refer to the given data. The marginal revenue product of the fourth worker is

Accepted Answer

A) $4. 
B) $2. 
C) $8. 
D) $52. 
A) $4. 
B) $2. 
C) $8. 
D) $52.

Question 6

The rate of unionization is substantially higher for protective service workers than for sales workers.

Accepted Answer

A) True 
 B)False

Question 7

What is collective bargaining? What is the goal of collective bargaining?

Accepted Answer

Collective bargaining is the negotiation

Question 8

A firm pays the same wage rate to all its workers. At present, 20 workers are employed at $50 per day. Wages are subsequently raised to $55 per day in order to attract an extra worker. Thus, the marginal labor cost per day is

Accepted Answer

A) $5. 
B) $21. 
C) $55. 
D) $155. 
A) $5. 
B) $21. 
C) $55. 
D) $155.

Question 9

Refer to the given data. At the profit-maximizing level of employment, this firm's total revenue will be

Accepted Answer

A) $48. 
B) $12. 
C) $36. 
D) $24. 
A) $48. 
B) $12. 
C) $36. 
D) $24.

Question 10

Suppose the MRP of a firm's 20th worker is $16 and the worker's marginal wage cost is $22. We can say with the most certainty that the firm

Accepted Answer

A) is hiring labor in a competitive labor market at a wage rate of $22. 
B) is hiring labor in a monopsonistic labor market. 
C) will find it profitable to hire more workers. 
D) will find it profitable to hire fewer workers. 
A) is hiring labor in a competitive labor market at a wage rate of $22. 
B) is hiring labor in a monopsonistic labor market. 
C) will find it profitable to hire more workers. 
D) will find it profitable to hire fewer workers.

Question 11

The nominal annual wage increases from $25,000 to $27,000, while the price level increases by 6 percent. In this case, the percentage change in the real annual wage is about

Accepted Answer

A) 8 percent. 
B) 10 percent. 
C) 14 percent. 
D) 2 percent. 
A) 8 percent. 
B) 10 percent. 
C) 14 percent. 
D) 2 percent.

Question 12

There is no evidence that unions are able to increase wage rates above those that the market would otherwise provide.

Accepted Answer

A) True 
 B)False

Question 13

According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S. dollar terms in 2013?

Accepted Answer

A) Sweden 
B) Germany 
C) Australia 
D) United States 
A) Sweden 
B) Germany 
C) Australia 
D) United States

Question 14

In monopsony situations, a minimum wage might increase wage and employment levels.

Accepted Answer

A) True 
 B)False

Question 15

A firm's labor input, total output of labor, and product price schedules are given in the table. Labor is the only variable input. How many workers will the profit-maximizing firm hire if the wage rate is $15 per day?

Accepted Answer

A) 3 
B) 4 
C) 6 
D) 5 
A) 3 
B) 4 
C) 6 
D) 5

Question 16

Refer to the given data. We can conclude from the information given that this firm is a

Accepted Answer

A) pure monopolist. 
B) discriminating monopolist. 
C) pure competitor. 
D) monopolistic competitor. 
A) pure monopolist. 
B) discriminating monopolist. 
C) pure competitor. 
D) monopolistic competitor.

Question 17

What is the purpose of occupational licensing? What are the effects of unnecessary or excessive occupational licensing requirements?

Accepted Answer

Occupational licensing was created to pr

Question 18

A labor union may engage in a lockout if the collective bargaining process breaks down.

Accepted Answer

A) True 
 B)False

Question 19

Efficiency wages are established at below-equilibrium levels.

Accepted Answer

A) True 
 B)False

Question 20

A bilateral monopoly case is a situation where two monopolists in two countries are selling competing products in the world market.

Accepted Answer

A) True 
 B)False

Exam 17: Wage Determination

Since the mid-1950s, union membership has declined as a percentage of employed wage and salary workers.

One reason for the high wage rates in the United States and other advanced economies is the high productivity of labor in these countries.

A firm operating in a purely competitive labor market has the marginal revenue product schedule shown in the table. If the wage rate decreases from $22.50 to $21.50, by how much will the firm expand employment?

Assume that your nominal wage was fixed at $15 an hour, and the price index rose from 100 to 105. In this case, your real wage has

Refer to the given data. The marginal revenue product of the fourth worker is

The rate of unionization is substantially higher for protective service workers than for sales workers.

What is collective bargaining? What is the goal of collective bargaining?

A firm pays the same wage rate to all its workers. At present, 20 workers are employed at $50 per day. Wages are subsequently raised to $55 per day in order to attract an extra worker. Thus, the marginal labor cost per day is

Refer to the given data. At the profit-maximizing level of employment, this firm's total revenue will be

Suppose the MRP of a firm's 20th worker is $16 and the worker's marginal wage cost is $22. We can say with the most certainty that the firm

The nominal annual wage increases from $25,000 to $27,000, while the price level increases by 6 percent. In this case, the percentage change in the real annual wage is about

There is no evidence that unions are able to increase wage rates above those that the market would otherwise provide.

According to international comparisons, which of these nations was not in the top 5 for hourly pay in U.S. dollar terms in 2013?

In monopsony situations, a minimum wage might increase wage and employment levels.

A firm's labor input, total output of labor, and product price schedules are given in the table. Labor is the only variable input. How many workers will the profit-maximizing firm hire if the wage rate is $15 per day?

Refer to the given data. We can conclude from the information given that this firm is a

What is the purpose of occupational licensing? What are the effects of unnecessary or excessive occupational licensing requirements?

A labor union may engage in a lockout if the collective bargaining process breaks down.

Efficiency wages are established at below-equilibrium levels.

A bilateral monopoly case is a situation where two monopolists in two countries are selling competing products in the world market.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, RD, and Efficiency

The Demand for Resources

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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