Deck 29: Manufacturing, Productivity, and Labor

Question 1

Response to the energy crisis of the early 1970s did not include

A) gasoline "rationing by waiting."
B) gasoline "rationing by price."
C) increased bureaucratic involvement.
D) Americans insulating their homes.

Answer 1

gasoline "rationing by price."

Question 2

Ling-Temco-Voight (LTV) is an example of

A) a conglomerate.
B) a vertical merger.
C) a horizontal merger.
D) a limited-liability partnership.

Answer 2

a conglomerate.

Question 3

The largest merger in American history was that of

A) Chemical Banking and Chase Manhattan in 1996.
B) America Online and Time Warner in 2000.
C) Gillette's acquisition of Duracell in 1985.
D) Credit Suisse's acquisition of Northern Rock in 2007.

Answer 3

America Online and Time Warner in 2000.

Question 4

The decline in the US manufacturing sector was the result of

A) increasing productivity in the manufacturing sector.
B) the increasing ability of consumers to purchase foreign manufactured goods more cheaply.
C) faster growth of the service sector.
D) All of the above are correct.
E) Only b and c are correct.

Question 5

A conglomerate merger is a combination of

A) firms that formerly competed with each other.
B) firms that formerly bought from and sold to each other.
C) firms that produce nearly identical products, but are based in different countries.
D) firms that produce unrelated products or services.

Question 6

Productivity

A) increased slightly from 1970 to 1980.
B) rose rapidly after World War II.
C) is a fundamental determinant of real wages.
D) All of the above are correct.
E) Only b and c are correct.

Question 7

Explanations for the decline in U.S. productivity in the 1970s and 1980s include all of the following except :

A) difficulties with measuring service sector output.
B) the entry into the labor force of many young, inexperienced workers.
C) a wave of corporate mergers that reduced competition.
D) rising oil prices.

Question 8

In the last 20 years all of the following measures of the manufacturing sector have declined except

A) total employment in manufacturing.
B) manufacturing employment as a share of the labor force.
C) manufacturing output as a share of GNP.
D) total manufacturing output.

Question 9

The period from 1977 through 1989 saw a wave of corporate mergers in the U.S.  These mergers were characterized by

A) the use of junk bonds for financing buyouts.
B) the low debt-to-equity ratios of the resulting firms.
C) resulting firms that focused on "core competencies" rather than diversification.
D) a "buyers' market" in which acquiring firms could purchase the stock of takeover targets for less than market value.
E) All of the above.

Question 10

The primary area of growth in the modern U.S. economy is

A) the manufacturing sector.
B) the agricultural sector.
C) the service sector.
D) the market for U.S. exports.

Question 11

From 1950 to 2007, manufacturing as a percentage of GDP went from roughly ____ percent to roughly ____ percent.

A) 10;25
B) 25;10
C) 25;50
D) 50;25

Question 12

Leverage refers to a firm's

A) output to employment ratio.
B) revenue to cost ratio.
C) debt to equity ratio.
D) common stock to preferred stock ratio.

Question 13

By 2007, energy use per dollar of GDP was ____ percent of what it was in 1970.

A) 95
B) 80
C) 75
D) 50

Question 14

Productivity is defined as

A) output per unit of capital.
B) output per labor hour.
C) output divided by the price level.
D) the percentage change in total annual output.

Question 15

Junk bonds are securities with

A) low risk and low yield.
B) high risk and high yield.
C) low risk and high yield.
D) high risk and low yield.

Question 16

According to Joseph Schumpeter, the success of capitalism relies on

A) continuous, small improvements to existing products.
B) "gales of creative destruction."
C) careful government direction of the manufacturing sector.
D) a strong agricultural sector to support the manufacturing workforce.

Question 17

Technological innovations and the increasing mechanization of industry

A) have led to long-run aggregate unemployment that is difficult to eradicate.
B) have led to lower wages for skilled workers.
C) mean higher prices for consumers.
D) ultimately create new jobs that replace old jobs.

Question 18

In the mid-1970s, antitrust policy began a new phase characterized by

A) the use of per se rules.
B) reliance on economic analysis.
C) the definition of a monopoly as a firm with dominant market share.
D) repeal of the Clayton Act.

Question 19

The primary purpose of a conglomerate merger is

A) to achieve economies of scale available through increased production of a single good.
B) to allow for decentralized management by spreading authority of a number of people spread throughout company locations.
C) to avoid adverse effects of business cycles through diversification.
D) to reduce competition by purchasing and then closing competing firms.

Question 20

During the 1990s, the nominal price of crude oil ____ and the real price ____.

A) leveled off; fell
B) fell; leveled off
C) rose; fell
D) fell; rose

Question 21

During the postwar period, the portion of total employment declined in the ______ sector.

A) agricultural
B) manufacturing
C) mining
D) construction
E) All of the above.

Question 22

The per se phase in antitrust policy began in.

A) the late nineteenth century.
B) the early twenties.
C) the late thirties
D) the early 1970s.

Question 23

In 2001, the percent of total employment in the manufacturing, mining, and construction sector equaled

A) less than 20 percent.
B) 30 percent.
C) 40 percent.
D) 60 percent.

Question 24

In the 1970s, members of the Law and Economics program at the University of Chicago argued that

A) per se rules should be adopted by the Supreme Court and used to decide antitrust cases.
B) large firms should always be broken up in order to encourage competition.
C) large market shares may be due to efficient management or innovation.
D) courts should "get out of the antitrust business".

Question 25

Which of the following statements about the percent of the population completing high school by persons age 25 and over in 2000 is MOST accurate?

A) African Americans graduate at a rate about 10 percentage points less than whites, and Hispanics graduate at a rate about 30 percentage points less than whites.
B) African Americans and Hispanics graduate at the same rate that whites do.
C) Hispanics graduate at the same rate as whites, but African Americans graduate at much lower rates.
D) Hispanic and black males graduate at the same rate as white males, but Hispanic and black females graduate at much lower rates than white females.

Question 26

Between 1960 and 2001, the labor force participation rate increased for each of the following groups except

A) married women
B) married men
C) single women
D) single men

Question 27

Key features of the American labor market in the postwar period include all of the following except

A) the growth of service sector employment.
B) increased labor force participation rate of women with young children.
C) steadily increasing union membership.
D) the erosion of discriminatory barriers for women and minority members.

Question 28

In 2001, the labor force participation rate of married women equaled ________.

A) about 10 percent.
B) about 25 percent.
C) just over 60 percent.
D) more than 80 percent.

Question 29

By 1964, nearly all blacks outside the South were covered by laws that allowed the government to issue cease and desist orders against discriminating firms. According to recent research by William Collins, these laws

A) were successful in improving the wages and working conditions of all African-Americans.
B) were successful in improving the wages and working conditions of only Southern African-Americans.
C) led to lower wages and deteriorating working conditions for African-Americans.
D) had some success in improving the wages and working conditions of African-American women.

Question 30

Relative to the white median family income, since 1980 African-American median family income has  ________ and Hispanic median family income has __________.

A) increased; also increased
B) fallen; also fallen
C) risen; remained about the same
D) fallen; increased

Question 31

From the late 1930s until the early 1970s, courts tended to follow per se rules when deciding antitrust cases.  According to these rules,

A) a firm's control of a large market share was considered intrinsically illegal.
B) the existence of only one or two firms in an industry was not necessarily an antitrust violation.
C) both market share and predatory practices must be considered in determining whether a firm had violated the law.
D) the court should only intervene if the firm charged "unfair" prices.

Question 32

Which of the following statements about the 2000 average wages of blacks and Hispanics compared to whites is MOST accurate?

A) African Americans earn about the same was whites but Hispanics earn about 70% of what whites earn.
B) By 2000, African Americans earn an average of about 70% of what whites earn, while Hispanics earn an average of about 75% of what whites earn.
C) Hispanics earn about the same was whites but African Americans earn about 70% of what whites earn.
D) African Americans and Hispanics earn less than half of what whites earn.

Question 33

According to the text, which of the following factors contributed to the increased labor force participation rate of women during the postwar period?

A) rising real wages
B) an increase in the years of schooling completed by women
C) declining fertility rates
D) the growth of the service sector
E) All of the above

Question 34

Productivity is hardest to measure in which sector?

A) Agriculture.
B) Construction.
C) Manufacturing.
D) Service.

Question 35

Which of the following statements correctly characterizes fertility rates in the postwar period?

A) The birth rate rose steadily, beginning during the Great Depression and continuing until 1950.
B) The birth rate peaked in the late 1950s, then began a steep decline reaching very low rates in the 1970s.
C) The birth rate has fallen steadily since 1940 due to the increased labor force participation of women.
D) During the postwar period, the birth rate has tended to rise in during recessions and fall during periods of economic growth.

Question 36

According to the text, the growth of service sector employment in the US has contributed to

A) higher unemployment rates in the postwar period.
B) a slowdown in the growth of real wages during the postwar period.
C) reduced economic stability in the postwar period.
D) an increase in the power and membership of unions.
E) All of the above.

Question 37

All of the following served to reduce labor market discrimination against women and minorities except

A) marriage bars.
B) Title VII of the Civil Rights Act.
C) Johnson's Office of Federal Contract Compliance Program.
D) the Equal Pay Act of 1963.

Question 38

Which of the following statements about the percent of the population completing high school by persons age 25 and over is MOST accurate?

A) Between 1940 and 2000, the rate for blacks increased substantially while the rate for whites remained the same.
B) Between 1940 and 1960, whites, blacks, and Hispanics experienced large decreases in completion rates, and experienced large increases after 1960.
C) Between 1980 and 2000, the rate for Hispanics dropped significantly while the rates for whites and blacks increased.
D) Between 1940 and 2000, the rate for whites increased about 3 times and the rate for blacks increased about 10 times.

Question 39

Which of the following statements about the "separate but equal" provision of Plessy v. Ferguson is MOST accurate?

A) resulted in African-American schools that were comparable to white schools.
B) resulted in African-American schools that were preferable to white schools in the South.
C) did not seriously hamper the labor market experience of African-Americans.
D) led to the creation of African-American schools that were systematically under funded.

Question 40

In 2001, women in most occupations earned ________ of what males in the same occupation earned.

A) less than 30 percent
B) about 50 percent
C) about 70 percent
D) about 90 percent

Question 41

Which of the following statements correctly characterizes the trend in real wages since 1960?

A) The real product wage kept pace with labor productivity, but the real consumption wage was fairly stagnant.
B) The real consumption wage kept pace with labor productivity, but the real product wage fell.
C) Labor productivity fell, leading to declines in both the real product wage and the real consumption wage.
D) Both the real consumption wage and the real product wage remained stable over the last 40 years.

Question 42

The term "path dependence" refers to

A) inefficient outcomes that result from early technology choices that are not optimal in the long run.
B) the tendency for competitive markets to become monopolistic in the long run.
C) inefficient outcomes that result from negative externalities.
D) the natural growth of monopoly when economies of scale exist in a market.

Question 43

During the postwar period, changing patterns of consumer demand led to changes in the distribution of jobs in the US economy.  In particular, the income elasticity of demand for many consumer products was ____________ the income elasticity of demand for services, such as medical care and insurance.

A) less than
B) greater than
C) equal to

Question 44

All of the following have played a role in reducing union strength since 1970 except

A) rising service sector employment.
B) foreign industrial competition.
C) the Supreme Court's decision to apply antitrust laws to union organization efforts.
D) "right-to-work" laws.

Question 45

Americans who benefit from immigration include

A) firms that hire immigrants.
B) workers whose skills are complementary with immigrants' skills.
C) consumers who purchase goods produced using immigrants labor.
D) property owners who own land in immigrant neighborhoods.
E) All of the above.

Question 46

Which is not a cause of the deterioration of the strength of labor?

A) the rise of the service sector
B) regional shifts in manufacturing
C) foreign industrial competition
D) a high rate of immigration of unskilled workers who tend to fear taking part in union activities.
E) All of the above are correct.

Question 47

Productivity growth in the service sector

A) is notoriously difficult to measure.
B) is comparable to productivity growth in agriculture.
C) has been slow compared with productivity growth in manufacturing.
D) Both a and b are correct.
E) Both a and c are correct.

Question 48

New immigration laws championed by the Kennedy and Johnson administrations

A) established a quota system based on ethnic background.
B) allowed for unlimited immigration.
C) placed a high priority on uniting families.
D) led to reduced immigration rates in the 1960s and 1970s.
E) All of the above.

Question 49

Which of the following statements is most accurate about immigration in the 20^th century?

A) The largest numbers of immigrants were during the "boom decades" like the 1920s, 1960s, and 1990s.
B) The number of immigrants decreased from 1900 until the Great Depression, increased consistently between 1940 and 2000, and is now about the same as it was in 1900.
C) Immigration was greatest during World War I and World War II as many people from around the world fled to the United States for safety.
D) Immigration has decreased dramatically in the last 30 years as the federal government instituted more restrictions and cracked down on illegal immigration.

Question 50

During the postwar period, increased real wages for women led to an increase in the labor force participation rate for women.  This implies that, for women,

A) the substitution effect of a wage increase is greater than the income effect.
B) the substitution effect of a wage increase is less than the income effect.
C) the substitution effect of a wage increase equals the income effect.
D) wage increases do not have an income effect.

Question 51

In the postwar period, the rate of immigration to the US has

A) continuously increased.
B) had periods of increase and decrease.
C) tended to fall.
D) remained relatively stable.

Question 52

Paul David examined _______________ as an example of path dependence.

A) Microsoft's Windows operating system
B) the VHS format
C) the QWERTY keyboard
D) hydroelectric power generators

Question 53

Suppose that wages are higher in one geographic region (Region 1) of a country than in another geographic region (Region 2).  Given free migration of workers,

A) wages in the two regions will become even more divergent.
B) wages in Region 1 will rise.
C) wages in Region 2 will rise.
D) employment in Region 2 will rise.