Question 1

In negotiating with trade unions, an employer's power can depend on

Accepted Answer

A)  credit- worthiness. 
B)  co- operation with other employers. 
C)  A and B 
D)  neither A nor B 
A)  credit- worthiness. 
B)  co- operation with other employers. 
C)  A and B 
D)  neither A nor B C

Question 2

Part- time employment in the UK is a higher percentage of total employment than in the whole of the EU.

Accepted Answer

A) True 
 B)False  FALSE

Question 3

Which of the following is not a source of imperfection in labour markets?

Accepted Answer

A)  Workers owning rather than renting houses 
B)  Workers making irrational job choices 
C)  Workers not being equally skilled 
D)  Restrictions on entry to certain jobs 
A)  Workers owning rather than renting houses 
B)  Workers making irrational job choices 
C)  Workers not being equally skilled 
D)  Restrictions on entry to certain jobs B

Question 4

If a trade union negotiates a productivity deal, then the wage increase will be above any productivity increase.

Accepted Answer

A) True 
 B)False

Question 5

According to perfect competition wage theory, which of the following will not help wages to be more equal?

Accepted Answer

A)  All workers having the same abilities 
B)  Perfect mobility of labour 
C)  Perfect knowledge 
D)  A national minimum wage 
A)  All workers having the same abilities 
B)  Perfect mobility of labour 
C)  Perfect knowledge 
D)  A national minimum wage

Question 6

When economists assume perfect markets for inputs, such as labour, they are not assuming

Accepted Answer

A)  freedom of entry into all labour markets. 
B)  workers in any one type of employment are all alike. 
C)  a minimum wage. 
D)  workers and employers are price- takers. 
E)  workers are rational. 
A)  freedom of entry into all labour markets. 
B)  workers in any one type of employment are all alike. 
C)  a minimum wage. 
D)  workers and employers are price- takers. 
E)  workers are rational.

Question 7

Assume the wage rate is £10 per hour. If two workers produce 500 units per hour and three workers produce 720 units per hour, the marginal revenue product of the third worker is

Accepted Answer

A)  £2,400 
B)  £7,200 
C)  £2,200 
D)  £3,600 
A)  £2,400 
B)  £7,200 
C)  £2,200 
D)  £3,600

Question 8

Geographical immobility of labour is caused by

Accepted Answer

A)  the costs of moving. 
B)  moral hazard. 
C)  people's unwillingness to move. 
D)  A and C 
A)  the costs of moving. 
B)  moral hazard. 
C)  people's unwillingness to move. 
D)  A and C

Question 9

One of the main types of flexibility in the use of labour is wage flexibility.

Accepted Answer

A) True 
 B)False

Question 10

The firm's demand for labour curve depends on

Accepted Answer

A)  the wage rate. 
B)  MRPL and MC1 
C)  MCL  
D)  MRPL 
A)  the wage rate. 
B)  MRPL and MC1 
C)  MCL  
D)  MRPL

Question 11

What are some of the threats and promises used in collective bargaining?

Accepted Answer

Strike action is a threat that unions ma

Question 12

Assuming leisure is a normal good, if the income effect is greater than the substitution effect, a wage increase

Accepted Answer

A)  will have no effect on labour supply. 
B)  will decrease labour supply. 
C)  could cause either an increase or a decrease in labour supply. 
D)  will increase labour supply. 
A)  will have no effect on labour supply. 
B)  will decrease labour supply. 
C)  could cause either an increase or a decrease in labour supply. 
D)  will increase labour supply.

Question 13

Differences in wages that result from differences in working conditions are known as

Accepted Answer

A)  compensating differentials. 
B)  occupational differentials. 
C)  job differentials. 
D)  search differentials. 
A)  compensating differentials. 
B)  occupational differentials. 
C)  job differentials. 
D)  search differentials.

Question 14

Which one of the following is not a typical feature of the flexible firm in employing and deploying labour?

Accepted Answer

A)  Financial flexibility 
B)  Functional flexibility 
C)  Managerial flexibility 
D)  Numerical flexibility 
A)  Financial flexibility 
B)  Functional flexibility 
C)  Managerial flexibility 
D)  Numerical flexibility

Question 15

The elasticity of demand for labour will not be increased by

Accepted Answer

A)  changes in the wage rate in the short run. 
B)  the ease of substituting labour with other input factors such as machinery. 
C)  greater price elasticity of demand for the product it produces. 
D)  rising wages which are a large proportion of total costs. 
A)  changes in the wage rate in the short run. 
B)  the ease of substituting labour with other input factors such as machinery. 
C)  greater price elasticity of demand for the product it produces. 
D)  rising wages which are a large proportion of total costs.

Question 16

Which of the following changes has occurred in UK labour markets in recent years?

Accepted Answer

A)  A shift from employment in the primary and tertiary sectors to employment in the secondary sector 
B)  A rise in the proportion of part- time workers 
C)  A fall in the proportion of workers employed on fixed- term contracts 
D)  All of the above 
A)  A shift from employment in the primary and tertiary sectors to employment in the secondary sector 
B)  A rise in the proportion of part- time workers 
C)  A fall in the proportion of workers employed on fixed- term contracts 
D)  All of the above

Question 17

If an employer has a labour force that has functional flexibility, then its employees are capable of switching between jobs with relative ease.

Accepted Answer

A) True 
 B)False

Question 18

The amount people must be paid to stay in their present job is called

Accepted Answer

A)  occupational immobility allowance. 
B)  transfer earnings. 
C)  quasi- rent. 
D)  occupational inertia. 
A)  occupational immobility allowance. 
B)  transfer earnings. 
C)  quasi- rent. 
D)  occupational inertia.

Question 19

If we produced as much as French workers per hour, why would it be possible for us to take Fridays off and not receive a pay cut?

Accepted Answer

If we increase our productivity, we will

Question 20

Which of the following will increase a trade union's power?

Accepted Answer

A)  New figures that show inflation has fallen 
B)  A low level of union membership 
C)  Normal profits for the industry in question owing to lower demand 
D)  High levels of unemployment 
E)  Reduced competition for the firm's products from abroad 
A)  New figures that show inflation has fallen 
B)  A low level of union membership 
C)  Normal profits for the industry in question owing to lower demand 
D)  High levels of unemployment 
E)  Reduced competition for the firm's products from abroad

Exam 18: Labour Markets, Wages and Industrial Relations

In negotiating with trade unions, an employer's power can depend on

Part- time employment in the UK is a higher percentage of total employment than in the whole of the EU.

Which of the following is not a source of imperfection in labour markets?

If a trade union negotiates a productivity deal, then the wage increase will be above any productivity increase.

According to perfect competition wage theory, which of the following will not help wages to be more equal?

When economists assume perfect markets for inputs, such as labour, they are not assuming

Assume the wage rate is £10 per hour. If two workers produce 500 units per hour and three workers produce 720 units per hour, the marginal revenue product of the third worker is

Geographical immobility of labour is caused by

One of the main types of flexibility in the use of labour is wage flexibility.

The firm's demand for labour curve depends on

What are some of the threats and promises used in collective bargaining?

Assuming leisure is a normal good, if the income effect is greater than the substitution effect, a wage increase

Differences in wages that result from differences in working conditions are known as

Which one of the following is not a typical feature of the flexible firm in employing and deploying labour?

The elasticity of demand for labour will not be increased by

Which of the following changes has occurred in UK labour markets in recent years?

If an employer has a labour force that has functional flexibility, then its employees are capable of switching between jobs with relative ease.

The amount people must be paid to stay in their present job is called

If we produced as much as French workers per hour, why would it be possible for us to take Fridays off and not receive a pay cut?

Which of the following will increase a trade union's power?

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