Question 1

An appeal to consumers to purchase union-made products represents an attempt to

Accepted Answer

A)  increase the supply of union labor 
B)  increase the demand for union labor 
C)  decrease the supply of union labor 
D)  decrease the quantity demanded of union labor 
E)  decrease the demand for union labor 
A)  increase the supply of union labor 
B)  increase the demand for union labor 
C)  decrease the supply of union labor 
D)  decrease the quantity demanded of union labor 
E)  decrease the demand for union labor B

Question 2

In order to reduce labor supply, a union must be able to

Accepted Answer

A)  do all of the following 
B)  force all employers in the industry to hire only union members 
C)  set wages 
D)  agree to wage concessions 
E)  increase union membership 
A)  do all of the following 
B)  force all employers in the industry to hire only union members 
C)  set wages 
D)  agree to wage concessions 
E)  increase union membership B

Question 3

Unions whose membership includes all workers in a particular product market, whether skilled or unskilled, are known as

Accepted Answer

A)  craft unions 
B)  exclusive unions 
C)  national unions 
D)  regional unions 
E)  industrial unions 
A)  craft unions 
B)  exclusive unions 
C)  national unions 
D)  regional unions 
E)  industrial unions E

Question 4

NARRBEGIN: Exhibit 12-1
Exhibit 12-1
  
-Along which part of the labor supply curve in Exhibit 12-1 does the substitution effect of a wage change outweigh the income effect?

Accepted Answer

A)  between points a and b 
B)  between points a and c 
C)  between points b and c 
D)  between points b and d 
E)  between points c and d 
A)  between points a and b 
B)  between points a and c 
C)  between points b and c 
D)  between points b and d 
E)  between points c and d

Question 5

As the wage rate increases, the substitution effect causes workers to supply more time to market work and the income effect causes them to supply less time to market work.

Accepted Answer

A) True 
 B)False

Question 6

If a person's labor supply curve is positively sloped, the income effect outweighs the substitution effect.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following could not contribute to differences in wage rates across markets?

Accepted Answer

A)  differences in training and education requirements 
B)  job discrimination 
C)  differences in risk 
D)  problems of labor mobility 
E)  distribution of a new national help-wanted newspaper 
A)  differences in training and education requirements 
B)  job discrimination 
C)  differences in risk 
D)  problems of labor mobility 
E)  distribution of a new national help-wanted newspaper

Question 8

Bob and Mary each have a Ph.D. in economics. Bob has a job in private industry at which he earns $90,000 a year. Mary earns half that much as a college professor. Which of the following could not explain Mary's career choice?

Accepted Answer

A)  She experiences diminishing marginal utility. 
B)  She enjoys the flexibility of her schedule. 
C)  She enjoys teaching. 
D)  She enjoys the informal atmosphere of a college. 
E)  She likes having her summers free to do research. 
A)  She experiences diminishing marginal utility. 
B)  She enjoys the flexibility of her schedule. 
C)  She enjoys teaching. 
D)  She enjoys the informal atmosphere of a college. 
E)  She likes having her summers free to do research.

Question 9

The individual supply curve of labor is backward bending because the substitution effect offsets the income effect at higher wage rates.

Accepted Answer

A) True 
 B)False

Question 10

A medical doctor who specializes in a particular field (e.g., surgery) generally earns more than a general practitioner because

Accepted Answer

A)  of greater education and training requirements 
B)  of differences in labor mobility 
C)  a general practitioner is more likely to work in an urban area 
D)  of discrimination 
E)  a general practitioner treats a greater number of patients per day 
A)  of greater education and training requirements 
B)  of differences in labor mobility 
C)  a general practitioner is more likely to work in an urban area 
D)  of discrimination 
E)  a general practitioner treats a greater number of patients per day

Question 11

If nonmarket work is a normal good, then an increase in income __________ the time allocated to __________.

Accepted Answer

A)  decreases; market work 
B)  decreases; leisure 
C)  increases; market work 
D)  increases; leisure 
E)  increases; nonmarket work 
A)  decreases; market work 
B)  decreases; leisure 
C)  increases; market work 
D)  increases; leisure 
E)  increases; nonmarket work

Question 12

Which of the following is not true about taste for work?

Accepted Answer

A)  Everyone ends up in her or his most preferred job 
B)  The transaction costs of job information and of changing jobs may prevent some desirable matchups 
C)  Workers seek jobs in a way that tends to minimize the disutility of work 
D)  Economists argue that your preferences are stable and you supply more labor to jobs you like 
E)  Economists do not try to explain how work preferences develop 
A)  Everyone ends up in her or his most preferred job 
B)  The transaction costs of job information and of changing jobs may prevent some desirable matchups 
C)  Workers seek jobs in a way that tends to minimize the disutility of work 
D)  Economists argue that your preferences are stable and you supply more labor to jobs you like 
E)  Economists do not try to explain how work preferences develop

Question 13

Along a backward-bending labor supply curve, the

Accepted Answer

A)  income effect always dominates the substitution effect 
B)  substitution effect always dominates the income effect 
C)  substitution effect is always equal to the income effect 
D)  substitution effect dominates the income effect at high wage rates 
E)  substitution effect dominates the income effect at low wage rates 
A)  income effect always dominates the substitution effect 
B)  substitution effect always dominates the income effect 
C)  substitution effect is always equal to the income effect 
D)  substitution effect dominates the income effect at high wage rates 
E)  substitution effect dominates the income effect at low wage rates

Question 14

NARRBEGIN: Exhibit 12-6
Exhibit 12-6
  
-In Exhibit 12-6, if a union raises the wage to $4, total employment in the market will be

Accepted Answer

A)  10 workers 
B)  12 workers 
C)  600 workers 
D)  720 workers 
E)  800 workers 
A)  10 workers 
B)  12 workers 
C)  600 workers 
D)  720 workers 
E)  800 workers

Question 15

If the United Auto Workers successfully negotiates a wage that is higher than the competitive wage,

Accepted Answer

A)  there is no excess supply of labor because everyone who wants to work at the union wage can get a job 
B)  there is no excess demand for labor because everyone who wants to work at the union wage can get a job 
C)  the union must ration the available jobs 
D)  all workers are better off 
E)  more workers are employed than at the competitive wage 
A)  there is no excess supply of labor because everyone who wants to work at the union wage can get a job 
B)  there is no excess demand for labor because everyone who wants to work at the union wage can get a job 
C)  the union must ration the available jobs 
D)  all workers are better off 
E)  more workers are employed than at the competitive wage

Question 16

A person who wins a large sum of money in the state lottery is likely to

Accepted Answer

A)  increase the amount of market work offered at each wage rate 
B)  not change the amount of work offered at each wage rate 
C)  decrease the amount of work offered at each wage rate 
D)  substitute market work for leisure time due to the substitution effect 
E)  substitute market work for leisure time due to the income effect 
A)  increase the amount of market work offered at each wage rate 
B)  not change the amount of work offered at each wage rate 
C)  decrease the amount of work offered at each wage rate 
D)  substitute market work for leisure time due to the substitution effect 
E)  substitute market work for leisure time due to the income effect

Question 17

The equilibrium wage

Accepted Answer

A)  is the same in all labor markets 
B)  occurs where the supply of labor curve begins to bend backward 
C)  cannot be calculated because there are so many labor markets 
D)  is determined by the market demand for labor and the market supply of labor 
E)  is irrelevant because of unions 
A)  is the same in all labor markets 
B)  occurs where the supply of labor curve begins to bend backward 
C)  cannot be calculated because there are so many labor markets 
D)  is determined by the market demand for labor and the market supply of labor 
E)  is irrelevant because of unions

Question 18

The market labor supply curve is

Accepted Answer

A)  the sum of individual labor supply curves at each quantity of labor 
B)  the sum of individual labor supply curves at each wage rate 
C)  the average of all individual labor supply curves 
D)  the sum of the upward-sloping portions of individual labor supply curves 
E)  the sum of the downward-sloping portions of individual labor supply curves 
A)  the sum of individual labor supply curves at each quantity of labor 
B)  the sum of individual labor supply curves at each wage rate 
C)  the average of all individual labor supply curves 
D)  the sum of the upward-sloping portions of individual labor supply curves 
E)  the sum of the downward-sloping portions of individual labor supply curves

Question 19

NARRBEGIN: Exhibit 12-7
Exhibit 12-7
  
-The situation represented in Exhibit 12-7 reflects all of the following employment conditions except one. Which is the exception?

Accepted Answer

A)  collective bargaining by an industrial union for higher wages and benefits 
B)  high union membership fees 
C)  imposition of qualifying exams for prospective workers 
D)  imposition of long apprenticeship periods 
E)  restriction of employment to union members 
A)  collective bargaining by an industrial union for higher wages and benefits 
B)  high union membership fees 
C)  imposition of qualifying exams for prospective workers 
D)  imposition of long apprenticeship periods 
E)  restriction of employment to union members

Question 20

Other things equal, the wage rate will be higher in a job that requires close monitoring by a supervisor since few individuals are eager to work in such an environment.

Accepted Answer

A) True 
 B)False

Exam 12: Labor Markets and Labor Unions

An appeal to consumers to purchase union-made products represents an attempt to

In order to reduce labor supply, a union must be able to

Unions whose membership includes all workers in a particular product market, whether skilled or unskilled, are known as

NARRBEGIN: Exhibit 12-1 Exhibit 12-1 -Along which part of the labor supply curve in Exhibit 12-1 does the substitution effect of a wage change outweigh the income effect?

As the wage rate increases, the substitution effect causes workers to supply more time to market work and the income effect causes them to supply less time to market work.

If a person's labor supply curve is positively sloped, the income effect outweighs the substitution effect.

Which of the following could not contribute to differences in wage rates across markets?

Bob and Mary each have a Ph.D. in economics. Bob has a job in private industry at which he earns $90,000 a year. Mary earns half that much as a college professor. Which of the following could not explain Mary's career choice?

The individual supply curve of labor is backward bending because the substitution effect offsets the income effect at higher wage rates.

A medical doctor who specializes in a particular field (e.g., surgery) generally earns more than a general practitioner because

If nonmarket work is a normal good, then an increase in income __________ the time allocated to __________.

Which of the following is not true about taste for work?

Along a backward-bending labor supply curve, the

NARRBEGIN: Exhibit 12-6 Exhibit 12-6 -In Exhibit 12-6, if a union raises the wage to $4, total employment in the market will be

If the United Auto Workers successfully negotiates a wage that is higher than the competitive wage,

A person who wins a large sum of money in the state lottery is likely to

The equilibrium wage

The market labor supply curve is

NARRBEGIN: Exhibit 12-7 Exhibit 12-7 -The situation represented in Exhibit 12-7 reflects all of the following employment conditions except one. Which is the exception?

Other things equal, the wage rate will be higher in a job that requires close monitoring by a supervisor since few individuals are eager to work in such an environment.

The Art and Science of Economic Analysis

Appendix: Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Consumer Choice and Demand

Production and Cost in the Firm

A: Perfect Competition

B: Perfect Competition

A: Monopoly

B: Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

If nonmarket work is a normal good, then an increase in income the time allocated to .