Question 1

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 2

The Taft-Hartley Act allowed states the right to

Accepted Answer

A) check into the past of prospective employees before they were hired. 
B) prosecute labor union bosses who did not obey the labor practices deemed reasonable by state authorities. 
C) pass right-to-work laws. 
D) force public employees to join unions. 
A) check into the past of prospective employees before they were hired. 
B) prosecute labor union bosses who did not obey the labor practices deemed reasonable by state authorities. 
C) pass right-to-work laws. 
D) force public employees to join unions.

Question 3

Exhibit 27-7 ​   Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 20 to 30 workers is

Accepted Answer

A) $14. 
B) $8. 
C) $17. 
D) $120. 
E) $170. 
A) $14. 
B) $8. 
C) $17. 
D) $120. 
E) $170.

Question 4

In collective bargaining,

Accepted Answer

A) union members from one union bargain with union members from other unions. 
B) each union member represents herself in labor-management negotiations. 
C) the objective of the union is to increase its bargaining power with management. 
D) employers attempt to minimize their bargaining power. 
A) union members from one union bargain with union members from other unions. 
B) each union member represents herself in labor-management negotiations. 
C) the objective of the union is to increase its bargaining power with management. 
D) employers attempt to minimize their bargaining power.

Question 5

If workers can do the work in both the unionized sector and the nonunionized sector, then an increase in the wage rate paid in the unionized sector (relative to the wage rate paid in the nonunionized sector), which is brought about by a permanent leftward shift in the labor supply curve, will lead to

Accepted Answer

A) an increase in the supply of labor in the nonunionized sector and lower wages in that sector. 
B) an increase in the supply of labor in the unionized sector and lower wages in that sector. 
C) no change in the supply of labor in either of the sectors mentioned. 
D) an increase in the supply of labor in the unionized sector and even higher wages in that sector. 
E) There is not enough information to answer the question. 
A) an increase in the supply of labor in the nonunionized sector and lower wages in that sector. 
B) an increase in the supply of labor in the unionized sector and lower wages in that sector. 
C) no change in the supply of labor in either of the sectors mentioned. 
D) an increase in the supply of labor in the unionized sector and even higher wages in that sector. 
E) There is not enough information to answer the question.

Question 6

Which of the following statements is false ?

Accepted Answer

A) The evidence seems to show that there are only a few, if any, instances of pure monopsony in the real world. 
B) In a monopsony setting, it is possible for a minimum wage to actually increase the number of workers hired. 
C) Although in a monopsony setting it is possible for a minimum wage to actually increase the number of workers hired, it is not possible to raise wage rates continually and always increase employment, too. 
D) The marginal factor cost for a monopsonist is less than the wage rate it pays workers. 
A) The evidence seems to show that there are only a few, if any, instances of pure monopsony in the real world. 
B) In a monopsony setting, it is possible for a minimum wage to actually increase the number of workers hired. 
C) Although in a monopsony setting it is possible for a minimum wage to actually increase the number of workers hired, it is not possible to raise wage rates continually and always increase employment, too. 
D) The marginal factor cost for a monopsonist is less than the wage rate it pays workers.

Question 7

Exhibit 27-6 ​
 
Refer to Exhibit 27-6. L and W are the equilibrium quantity of labor employed and the wage rate respectively. A person arguing that a worker is being exploited if she is paid less than the value of her marginal product would say that the exhibit is an illustration of the fact that

Accepted Answer

A) perfect competition entails labor exploitation. 
B) monopoly entails labor exploitation. 
C) monopoly entails no labor exploitation. 
D) monopsony entails labor exploitation. 
E) monopsony entails no labor exploitation. 
A) perfect competition entails labor exploitation. 
B) monopoly entails labor exploitation. 
C) monopoly entails no labor exploitation. 
D) monopsony entails labor exploitation. 
E) monopsony entails no labor exploitation.

Question 8

Exhibit 27-9 ​
 
Refer to Exhibit 27-9. Let DA and DB represent demand for labor curves facing unions A and B, respectively. As a result of their efforts, both unions succeed in increasing the wage rate from W1 to W2. In terms of the wage-employment trade-off, the wage increase

Accepted Answer

A) had a larger impact on employment for union A than for union B. 
B) had a larger impact on employment for union B than for union A. 
C) had the same impact on employment in both unions. 
D) cannot be determined without further information. 
A) had a larger impact on employment for union A than for union B. 
B) had a larger impact on employment for union B than for union A. 
C) had the same impact on employment in both unions. 
D) cannot be determined without further information.

Question 9

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 10

Right-to-work laws

Accepted Answer

A) say that everyone has the right to work and that it is the responsibility of the government to make available employment opportunities. 
B) ensure that employers cannot prevent persons from gaining employment simply because they are members of a union. 
C) allow everyone to gain employment at a firm without being a union member but also require that once hired the employee must join the union. 
D) make it illegal to require union membership for purposes of employment. 
A) say that everyone has the right to work and that it is the responsibility of the government to make available employment opportunities. 
B) ensure that employers cannot prevent persons from gaining employment simply because they are members of a union. 
C) allow everyone to gain employment at a firm without being a union member but also require that once hired the employee must join the union. 
D) make it illegal to require union membership for purposes of employment.

Question 11

It is unlikely that very many (pure)monopsony firms exist today, given that workers are increasingly mobile.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Exhibit 27-8 ​
 
Refer to Exhibit 27-8. What is the total wage bill of the profit- maximizing monoposonist?

Accepted Answer

A) W5 x Q3 
B) W4 x Q5 
C) W3 x Q2 
D) W2 x Q3 
A) W5 x Q3 
B) W4 x Q5 
C) W3 x Q2 
D) W2 x Q3

Question 14

Exhibit 27-7 ​   Refer to Exhibit 27-7. For technological reasons, this monopsonist can hire labor only in increments of 10 workers. The profit-maximizing number of workers is

Accepted Answer

A) 20. 
B) 30. 
C) 40. 
D) 50. 
E) 60. 
A) 20. 
B) 30. 
C) 40. 
D) 50. 
E) 60.

Question 15

Exhibit 27-7 ​  
Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 40 to 50 workers is

Accepted Answer

A) $210. 
B) $21. 
C) $19. 
D) $160. 
E) $15 
A) $210. 
B) $21. 
C) $19. 
D) $160. 
E) $15

Question 16

Which of the following comes closest to being a monopsony?

Accepted Answer

A) a car manufacturer in Detroit 
B) a McDonald's in a big city 
C) a coal company who employees all of the workers in a given town 
D) a farmer who hires labor 
A) a car manufacturer in Detroit 
B) a McDonald's in a big city 
C) a coal company who employees all of the workers in a given town 
D) a farmer who hires labor

Question 17

In 18th century England, higher wages of weavers appears to have led to the invention of the power loom.

Accepted Answer

A) True 
 B)False

Question 18

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 19

If a labor union tries to reduce the availability of substitutes for the product it sells, it is attempting to affect the __________ for labor. But if it tries to increase substitute factor prices, it is attempting to affect the __________ labor.

Accepted Answer

A) elasticity of demand; supply of 
B) demand; elasticity of demand for 
C) elasticity of demand; demand for 
D) demand; supply of 
A) elasticity of demand; supply of 
B) demand; elasticity of demand for 
C) elasticity of demand; demand for 
D) demand; supply of

Question 20

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.

Exam 14: Wages, Union, and Labor

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?

The Taft-Hartley Act allowed states the right to

Exhibit 27-7 ​ Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 20 to 30 workers is

In collective bargaining,

Which of the following statements is false ?

Exhibit 27-6 ​ Refer to Exhibit 27-6. L and W are the equilibrium quantity of labor employed and the wage rate respectively. A person arguing that a worker is being exploited if she is paid less than the value of her marginal product would say that the exhibit is an illustration of the fact that

Exhibit 27-9 ​ Refer to Exhibit 27-9. Let DA and DB represent demand for labor curves facing unions A and B, respectively. As a result of their efforts, both unions succeed in increasing the wage rate from W1 to W2. In terms of the wage-employment trade-off, the wage increase

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

Right-to-work laws

It is unlikely that very many (pure)monopsony firms exist today, given that workers are increasingly mobile.

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

Exhibit 27-8 ​ Refer to Exhibit 27-8. What is the total wage bill of the profit- maximizing monoposonist?

Exhibit 27-7 ​ Refer to Exhibit 27-7. For technological reasons, this monopsonist can hire labor only in increments of 10 workers. The profit-maximizing number of workers is

Exhibit 27-7 ​ Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 40 to 50 workers is

Which of the following comes closest to being a monopsony?

In 18th century England, higher wages of weavers appears to have led to the invention of the power loom.

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.

If a labor union tries to reduce the availability of substitutes for the product it sells, it is attempting to affect the __________ for labor. But if it tries to increase substitute factor prices, it is attempting to affect the __________ labor.

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

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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?

Exhibit 27-7 Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 20 to 30 workers is

Exhibit 27-6 Refer to Exhibit 27-6. L and W are the equilibrium quantity of labor employed and the wage rate respectively. A person arguing that a worker is being exploited if she is paid less than the value of her marginal product would say that the exhibit is an illustration of the fact that

Exhibit 27-9 Refer to Exhibit 27-9. Let D_A and D_B represent demand for labor curves facing unions A and B, respectively. As a result of their efforts, both unions succeed in increasing the wage rate from W₁ to W₂. In terms of the wage-employment trade-off, the wage increase

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

Exhibit 27-8 Refer to Exhibit 27-8. What is the total wage bill of the profit- maximizing monoposonist?

Exhibit 27-7 Refer to Exhibit 27-7. For technological reasons, this monopsonist can hire labor only in increments of 10 workers. The profit-maximizing number of workers is

Exhibit 27-7 Refer to Exhibit 27-7. The marginal factor cost of increasing employment from 40 to 50 workers is

If a labor union tries to reduce the availability of substitutes for the product it sells, it is attempting to affect the for labor. But if it tries to increase substitute factor prices, it is attempting to affect the labor.