Question 1

In the demand-enhancing union model, a union tries to increase the wage rate through actions such as promoting the industry's product or raising labor productivity.

Accepted Answer

A) True 
 B)False

Question 2

If the nominal wage falls by 2 percent and the price level falls by 5 percent, the real wage will

Accepted Answer

A) be unaffected. 
B) fall by 7 percent. 
C) rise by 3 percent. 
D) rise by 7 percent. 
A) be unaffected. 
B) fall by 7 percent. 
C) rise by 3 percent. 
D) rise by 7 percent.

Question 3

Suppose in some economy there are 100 million workers; 8 million of those workers work in retail trade, and 2 million of the retail workers belong to unions. Total union membership in this economy is 30 million. The rate of unionization in the economy is

Accepted Answer

A) 30 percent, and the rate of unionization in retail trade in 20 percent. 
B) 8 percent, and the rate of unionization in retail trade is 2 percent. 
C) 30 percent, and the rate of unionization in retail trade is 25 percent. 
D) 20 percent, and the rate of unionization in retail trade is 25 percent. 
A) 30 percent, and the rate of unionization in retail trade in 20 percent. 
B) 8 percent, and the rate of unionization in retail trade is 2 percent. 
C) 30 percent, and the rate of unionization in retail trade is 25 percent. 
D) 20 percent, and the rate of unionization in retail trade is 25 percent.

Question 4

The graph represents the supply and demand for labor in a purely competitive market. The area 0 abc represents

Accepted Answer

A) total revenue of the firm. 
B) total earnings of labor. 
C) marginal revenue product of labor. 
D) marginal labor cost. 
A) total revenue of the firm. 
B) total earnings of labor. 
C) marginal revenue product of labor. 
D) marginal labor cost.

Question 5

A firm's labor input, total output of labor, and product price schedules are given in the table. Labor is the only variable input. What is the marginal revenue product of the fifth worker?

Accepted Answer

A) $5 
B) $25 
C) $−7 
D) $1 
A) $5 
B) $25 
C) $−7 
D) $1

Question 6

A profit-maximizing firm will

Accepted Answer

A) expand employment if marginal revenue product equals marginal resource cost. 
B) reduce employment if marginal revenue product equals marginal resource cost. 
C) reduce employment if marginal revenue product is less than marginal resource cost. 
D) expand employment if marginal revenue product is less than marginal resource cost. 
A) expand employment if marginal revenue product equals marginal resource cost. 
B) reduce employment if marginal revenue product equals marginal resource cost. 
C) reduce employment if marginal revenue product is less than marginal resource cost. 
D) expand employment if marginal revenue product is less than marginal resource cost.

Question 7

The table shows labor demand data on the left and labor supply data on the right. How many workers will this profit-maximizing firm choose to employ?

Accepted Answer

A) 4 
B) 3 
C) 1 
D) 2 
A) 4 
B) 3 
C) 1 
D) 2

Question 8

What is human capital? How is it related to one's future earnings?

Accepted Answer

Human capital is the knowledge and skill

Question 9

What are the economic effects of imposition of a new occupational license on a labor market?

Accepted Answer

Occupational licenses often lead to poli

Question 10

An example of a monopsonist is a labor union whose members include all the workers in a particular industry.

Accepted Answer

A) True 
 B)False

Question 11

Real wages in the United States in the long run

Accepted Answer

A) show no discernible relationship to output per worker. 
B) have increased at about the same rate as increases in output per worker. 
C) have increased slower than increases in output per worker. 
D) have increased faster than increases in output per worker. 
A) show no discernible relationship to output per worker. 
B) have increased at about the same rate as increases in output per worker. 
C) have increased slower than increases in output per worker. 
D) have increased faster than increases in output per worker.

Question 12

What is a monopsony? Explain its three characteristics as applied to a labor market.

Accepted Answer

A monopsony is a market structure in whi

Question 13

Discuss the hourly wage of production workers between the United States and some European countries.

Accepted Answer

The general level of real wages in the U

Question 14

Unions prefer agency shops to open shops.

Accepted Answer

A) True 
 B)False

Question 15

Real wages in the United States are

Accepted Answer

A) the highest in the world. 
B) relatively high, but not as high as in some other industrially advanced nations. 
C) much higher than output per worker. 
D) higher than nominal wages. 
A) the highest in the world. 
B) relatively high, but not as high as in some other industrially advanced nations. 
C) much higher than output per worker. 
D) higher than nominal wages.

Question 16

The marginal cost of a productive resource is equal to the price of the resource if a firm is

Accepted Answer

A) a price taker in the output market. 
B) a price taker in the resource market. 
C) able to influence the price of the product by producing more or less of it. 
D) able to influence the price of the factor by buying more or less of it. 
A) a price taker in the output market. 
B) a price taker in the resource market. 
C) able to influence the price of the product by producing more or less of it. 
D) able to influence the price of the factor by buying more or less of it.

Question 17

Refer to the given data. If this firm can hire as few or many workers as it wants at $9, it is

Accepted Answer

A) hiring labor in a monopsony labor market. 
B) hiring labor in a purely competitive labor market. 
C) selling its product in a monopolized product market. 
D) selling its product in a purely competitive product market. 
A) hiring labor in a monopsony labor market. 
B) hiring labor in a purely competitive labor market. 
C) selling its product in a monopolized product market. 
D) selling its product in a purely competitive product market.

Question 18

If the nominal wages of carpenters rose by 3 percent in 2019 and the price level decreased by 4 percent, then the real wages of carpenters

Accepted Answer

A) decreased by 1 percent. 
B) increased by 7 percent. 
C) increased by 1 percent. 
D) increased by 4 percent. 
A) decreased by 1 percent. 
B) increased by 7 percent. 
C) increased by 1 percent. 
D) increased by 4 percent.

Question 19

What is meant by managerial prerogatives?

Accepted Answer

Many work agreements contain clauses out

Question 20

Explain the long-run relationship between real hourly earnings and productivity.

Accepted Answer

There is a close long-run relationship b

Exam 17: Wage Determination

In the demand-enhancing union model, a union tries to increase the wage rate through actions such as promoting the industry's product or raising labor productivity.

If the nominal wage falls by 2 percent and the price level falls by 5 percent, the real wage will

Suppose in some economy there are 100 million workers; 8 million of those workers work in retail trade, and 2 million of the retail workers belong to unions. Total union membership in this economy is 30 million. The rate of unionization in the economy is

The graph represents the supply and demand for labor in a purely competitive market. The area 0 abc represents

A firm's labor input, total output of labor, and product price schedules are given in the table. Labor is the only variable input. What is the marginal revenue product of the fifth worker?

A profit-maximizing firm will

The table shows labor demand data on the left and labor supply data on the right. How many workers will this profit-maximizing firm choose to employ?

What is human capital? How is it related to one's future earnings?

What are the economic effects of imposition of a new occupational license on a labor market?

An example of a monopsonist is a labor union whose members include all the workers in a particular industry.

Real wages in the United States in the long run

What is a monopsony? Explain its three characteristics as applied to a labor market.

Discuss the hourly wage of production workers between the United States and some European countries.

Unions prefer agency shops to open shops.

Real wages in the United States are

The marginal cost of a productive resource is equal to the price of the resource if a firm is

Refer to the given data. If this firm can hire as few or many workers as it wants at $9, it is

If the nominal wages of carpenters rose by 3 percent in 2019 and the price level decreased by 4 percent, then the real wages of carpenters

What is meant by managerial prerogatives?

Explain the long-run relationship between real hourly earnings and productivity.

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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