Question 1

According to U.S. Bureau of Labor Statistics data, which of the following industries had the highest unionization rate in 2015?

Accepted Answer

A)   finance
B)   construction
C)   transportation
D)   manufacturingE) B) and D)
F) A) and D)

Question 2

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.E) B) and C)
F) A) and D)

Question 3

Traveling sales representative Harold Hill only calls on clients four days a week rather than the five days expected by his employer. This is an example of

Accepted Answer

A)   equalizing differences.
B)   a nonmonetary job disadvantage.
C)   shirking.
D)   the free-rider problem.E) A) and C)
F) B) and C)

Question 4

A craft union attempts to increase wage rates by

Accepted Answer

A)   equating the MRP and the MRC curves.
B)   shifting the labor supply curve to the left.
C)   shifting the labor supply curve to the right.
D)   shifting the MRP curve to the right.E) A) and B)
F) A) and C)

Question 5

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.E) A) and B)
F) B) and C)

Question 6

Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hiring of labor.

Accepted Answer

A) True 
 B)False

Question 7

The basic explanation for high real wages in the United States and other industrially advanced economies is that the

Accepted Answer

A)   labor supply has increased more rapidly than labor demand in these nations.
B)   labor demand has increased more rapidly than labor supply in these nations.
C)   unemployment in these nations has remained relatively stable over the years.
D)   inflation rate in these nations has been higher than the rate of increase in nominal wages.E) B) and C)
F) A) and B)

Question 8

If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as

Accepted Answer

A)   a cartel.
B)   countervailing power.
C)   a bilateral monopoly.
D)   an internal labor market.E) B) and C)
F) All of the above

Question 9

Which of the following tactics is most associated with the demand-enhancement union model?

Accepted Answer

A)   reducing the price of inputs that are substitutes for union workers
B)   lobbying for increases in public expenditures on the product it is producing
C)   restricting the number of workers allowed to work in the industry
D)   increasing the price of products that are complements for the one it is producingE) C) and D)
F) B) and D)

Question 10

Critics of minimum-wage legislation argue that it

Accepted Answer

A)   keeps inefficient producers in business.
B)   reduces employment.
C)   undermines incentives to work.
D)   is deflationary.E) B) and D)
F) All of the above

Question 11

Discrimination that results in minorities being paid less than whites for identical work would be an example of which explanation for wage differentials?

Accepted Answer

A)   noncompeting groups
B)   compensating differences
C)   market imperfections
D)   principal-agent problemsE) A) and B)
F) All of the above

Question 12

Union membership among workers in America has been declining since the 1950s.

Accepted Answer

A) True 
 B)False

Question 13

The majority of union members in the United States belong to unions that are

Accepted Answer

A)   affiliated with the United Workers of America (UW
A)  .
B)   affiliated with the AFL-CIO.
C)   independent unions that are not affiliated with the AFL-CIO.
D)   growing rapidly in membership.E) B) and D)
F) A) and B)

Question 14

The principal-agent problem, as applied to the management of a company, would have the

Accepted Answer

A)   stockholders as the agents and the managers as the principals.
B)   company as the principal and the customer as the agent.
C)   stockholders as the principals and the managers as the agents.
D)   customer as the principal and the company as the agent.E) A) and B)
F) None of the above

Question 15

The equilibrium wage rate in a bilateral monopoly labor market is

Accepted Answer

A)   determined by the monopoly supplier of labor.
B)   determined solely by employers.
C)   logically indeterminate within a certain range.
D)   largely set by government regulators.E) A) and D)
F) All of the above

Question 16

A monopsonistic employer's marginal resource (labor)  cost curve

Accepted Answer

A)   is always more elastic than the labor supply curve.
B)   coincides with the labor supply curve.
C)   lies below the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers.
D)   lies above the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers.E) B) and D)
F) C) and D)

Question 17

For the firm, the major goal of profit sharing plans is to

Accepted Answer

A)   force workers to incur some of the business risk.
B)   overcome the monopsony problem of having to pay higher wages to attract additional workers.
C)   overcome the principal-agent problem by better aligning the workers' interests with those of the firm.
D)   reduce total compensation payments.E) All of the above
F) B) and C)

Question 18

Noncompeting groups of workers are the result of geographic immobility.

Accepted Answer

A) True 
 B)False

Question 19

In 2015, approximately 5 percent of all work time lost was due to work stoppages.

Accepted Answer

A) True 
 B)False

Question 20

Geographic immobility in the labor force results in

Accepted Answer

A)   homogeneous wage rates.
B)   homogeneous unemployment rates.
C)   local labor markets which reach equilibrium quickly and efficiently.
D)   persistent wage and unemployment differentials among different regions of the country.E) B) and D)
F) B) and C)

Exam 17: Wage Determination

The majority of union members in the United States belong to unions that are

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Noncompeting groups of workers are the result of geographic immobility.

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A craft union attempts to increase wage rates by

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Real wages in the United States are

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Which of the following tactics is most associated with the demand-enhancement union model?

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The principal-agent problem, as applied to the management of a company, would have the

Correct AnswerverifiedShow Answer

A profit-maximizing firm will

Correct AnswerverifiedShow Answer

Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hiring of labor.

Correct AnswerverifiedShow Answer

Discrimination that results in minorities being paid less than whites for identical work would be an example of which explanation for wage differentials?

Correct AnswerverifiedShow Answer

For the firm, the major goal of profit sharing plans is to

Correct AnswerverifiedShow Answer

Traveling sales representative Harold Hill only calls on clients four days a week rather than the five days expected by his employer. This is an example of

Correct AnswerverifiedShow Answer

According to U.S. Bureau of Labor Statistics data, which of the following industries had the highest unionization rate in 2015?

Correct AnswerverifiedShow Answer

If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as

Correct AnswerverifiedShow Answer

In 2015, approximately 5 percent of all work time lost was due to work stoppages.

Correct AnswerverifiedShow Answer

Geographic immobility in the labor force results in

Correct AnswerverifiedShow Answer

The basic explanation for high real wages in the United States and other industrially advanced economies is that the

Correct AnswerverifiedShow Answer

A monopsonistic employer's marginal resource (labor) cost curve

Correct AnswerverifiedShow Answer

Critics of minimum-wage legislation argue that it

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The equilibrium wage rate in a bilateral monopoly labor market is

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Union membership among workers in America has been declining since the 1950s.

Correct AnswerverifiedShow Answer

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