Question 1

A monopsonist's wage cost in hiring an additional worker is the:

Accepted Answer

A)   worker's wage rate.
B)   worker's wage rate plus the wage increases paid to all workers already employed.
C)   worker's wage rate adjusted for the lower price that must be charged for the extra output.
D)   marginal wage cost less the wage rate.E) B) and D)
F) A) and C)

Question 2

Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:

Accepted Answer

A)   $6 billion per year.
B)   about 2 percent of domestic output.
C)   less than one-half of 1 percent of domestic output.
D)   about 4 percent of domestic output.E) B) and C)
F) None of the above

Question 3

The electricians' union is a good example of:

Accepted Answer

A)   exclusive unionism.
B)   an industrial union.
C)   how unions can simultaneously increase wage rates and employment by increasing the demand for labor.
D)   inclusive unionism.E) A) and B)
F) B) and C)

Question 4

Suppose the MRP of a firm's 12th worker is $22 and the worker's marginal wage cost is $16.We can say with certainty that the firm:

Accepted Answer

A)   is hiring labor in a competitive labor market at a wage rate of $16.
B)   is hiring labor in a monopsonistic labor market.
C)   will find it profitable to hire fewer workers.
D)   will find it profitable to hire more workers.E) None of the above
F) A) and D)

Question 5

The individual firm in a purely competitive labor market faces:

Accepted Answer

A)   a perfectly elastic labor supply curve and a downsloping labor demand curve.
B)   a perfectly elastic labor demand curve and an upsloping labor supply curve.
C)   labor demand and labor supply curves both of which are perfectly elastic.
D)   a downsloping labor demand curve and an upsloping labor supply curve.E) C) and D)
F) A) and D)

Question 6

Which of the following might be expected to increase union membership?

Accepted Answer

A)   Increased labor force participation by women and young people.
B)   Decreased imports of manufactured goods.
C)   Increased substitution of capital for labor in the production process.
D)   Continued growth of service-related industries.E) A) and B)
F) B) and C)

Question 7

Use the resource demand data shown on the left and the resource supply data on the right in answering the following question:   Labor Demand Data ‾ Labor Supply Data ‾Employment‾0123456MarginalProduct‾0152839485560 Product  Price ‾$2.202.001.801.601.401.201.00Employment‾0123456 Wage Rate ‾−−$1.002.003.004.005.006.00\begin{array}{c}\underline{	ext { Labor Demand Data }}\quad\quad\quad\quad\quad\quad\quad\quad\underline{	ext { Labor Supply Data }}\\begin{array}{c}\\underline{	ext {Employment}}\0\1\2\3\4\5\6\end{array}\begin{array}{c}	ext {Marginal}\\underline{	ext {Product}}\0\15\28\39\48\55\60\end{array}\begin{array}{c}	ext { Product }\\underline{	ext { Price } }\\$ 2.20 \2.00 \1.80 \1.60 \1.40 \1.20 \1.00 \end{array}\begin{array}{c}\\underline{	ext {Employment}}\0\1\2\3\4\5\6 \end{array}\begin{array}{c}	ext { Wage}\\underline{	ext { Rate }} \-- \\$1.00 \2.00\3.00 \4.00 \5.00 \6.00\end{array}\end{array} Labor Demand Data ​ Labor Supply Data ​Employment​0123456​MarginalProduct​0152839485560​ Product  Price ​$2.202.001.801.601.401.201.00​Employment​0123456​ Wage Rate ​−−$1.002.003.004.005.006.00​​ 
  Refer to the given data.What will be the profit-maximizing selling price of the product?

Accepted Answer

A)   $1.40.
B)   $1.60.
C)   $1.80.
D)   $2.00. E) B) and C)
F) A) and B)

Question 8

Which of the following is illegal under federal labor law?

Accepted Answer

A)   Closed shops.
B)   Agency shops.
C)   Union shops.
D)   State right-to-work laws.E) A) and C)
F) A) and B)

Question 9

(Last Word) The dispute over the pay of chief executive officers (CEOs) of U.S.corporations hinges on whether or not such pay:

Accepted Answer

A)   should be granted for past performance or for current performance.
B)   is determined in a competitive labor market or in a monopsonistic labor market.
C)   is justified on productivity grounds or mainly reflects an overestimation of CEO importance by corporate boards of directors.
D)   should contain performance incentives such as stock options,stock shares,or bonuses.E) All of the above
F) A) and B)

Question 10

Occupational licensing:

Accepted Answer

A)   functions essentially the same as inclusive unionism.
B)   attracts large numbers of workers and therefore depresses wages.
C)   often restricts occupational entry and raises the incomes of license holders.
D)   has been declared illegal in the majority of states.E) A) and C)
F) A) and D)

Question 11

Economists regard expenditures on education as investments because:

Accepted Answer

A)   they are subject to tax deductions at the same rate as are expenditures on machinery and equipment.
B)   education is economically beneficial at the same time it is being acquired.
C)   such expenditures are current costs that are intended to enhance future earnings.
D)   they differ from expenditures on health and worker mobility.E) A) and D)
F) B) and C)

Question 12

A monopsonistic employer may sell its product in a competitive market.

Accepted Answer

A) True 
 B)False

Question 13

If a firm is hiring a certain type of labor under purely competitive conditions:

Accepted Answer

A)   its labor demand curve will be perfectly elastic at the market-determined wage rate.
B)   the labor supply curve will lie above the marginal labor cost curve.
C)   the labor supply and marginal labor (resource) cost curves will coincide and be upsloping.
D)   the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic.E) None of the above
F) C) and D)

Question 14

As compared to a purely competitive labor market,in a nonunionized monopsonistic labor market,wages:

Accepted Answer

A)   and employment will both be lower.
B)   will be higher,but employment will be lower.
C)   will be lower,but employment will be higher.
D)   and employment will both be higher.E) None of the above
F) A) and B)

Question 15

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage) ,its:

Accepted Answer

A)   MRC curve is also upsloping.
B)   MRC curve is perfectly elastic.
C)   MRP curve is perfectly inelastic.
D)   MRP curve is also upsloping.E) None of the above
F) A) and C)

Question 16

The labor supply curve facing a purely competitive firm is perfectly inelastic.

Accepted Answer

A) True 
 B)False

Question 17

Suppose in some economy there are 100 million workers;8 million of those workers work in retail trade,and 2 million of the retail workers belong to unions.Total union membership in this economy is 30 million.The rate of unionization in the economy is:

Accepted Answer

A)   30 percent and the rate of unionization in retail trade in 20 percent.
B)   8 percent and the rate of unionization in retail trade is 2 percent.
C)   30 percent and the rate of unionization in retail trade is 25 percent.
D)   20 percent and the rate of unionization in retail trade is 25 percent.E) None of the above
F) All of the above

Question 18

Available research suggests that the union wage advantage diminishes the national output by:

Accepted Answer

A)   15 percent.
B)   8 percent.
C)   3 percent.
D)   less than 1 percent.E) C) and D)
F) B) and D)

Question 19

Many economists are critical of the minimum wage because they believe that it:

Accepted Answer

A)   hurts the efforts of labor unions.
B)   reduces the number of available job opportunities.
C)   conflicts with policies designed to equalize the distribution of income.
D)   causes labor shortages in affected markets.E) All of the above
F) None of the above

Question 20

The real wage will rise if the nominal wage:

Accepted Answer

A)   falls more rapidly than the general price level.
B)   increases at the same rate as labor productivity.
C)   increases more rapidly than the general price level.
D)   falls at the same rate as the general price level.E) A) and B)
F) A) and C)

Exam 16: Wage Determination

The individual firm in a purely competitive labor market faces:

Correct Answer
verified

Available research suggests that the union wage advantage diminishes the national output by:

Correct Answer
verified

Which of the following is illegal under federal labor law?

Correct Answer
verified

(Last Word) The dispute over the pay of chief executive officers (CEOs) of U.S.corporations hinges on whether or not such pay:

Correct Answer
verified

As compared to a purely competitive labor market,in a nonunionized monopsonistic labor market,wages:

Correct Answer
verified

Suppose in some economy there are 100 million workers;8 million of those workers work in retail trade,and 2 million of the retail workers belong to unions.Total union membership in this economy is 30 million.The rate of unionization in the economy is:

Correct Answer
verified

Many economists are critical of the minimum wage because they believe that it:

Correct Answer
verified

Occupational licensing:

Correct Answer
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The electricians' union is a good example of:

Correct Answer
verified

The real wage will rise if the nominal wage:

Correct Answer
verified

Suppose the MRP of a firm's 12^th worker is $22 and the worker's marginal wage cost is $16.We can say with certainty that the firm:

Correct Answer
verified

If a firm is hiring a certain type of labor under purely competitive conditions:

Correct Answer
verified

Which of the following might be expected to increase union membership?

Correct Answer
verified

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage) ,its:

Correct Answer
verified

Economists regard expenditures on education as investments because:

Correct Answer
verified

Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:

Correct Answer
verified

The labor supply curve facing a purely competitive firm is perfectly inelastic.

Correct Answer
verified

A monopsonist's wage cost in hiring an additional worker is the:

Correct Answer
verified

A monopsonistic employer may sell its product in a competitive market.

Correct Answer
verified

Correct Answer
verified

Exam 16: Wage Determination

The individual firm in a purely competitive labor market faces:

Correct AnswerverifiedShow Answer

Available research suggests that the union wage advantage diminishes the national output by:

Correct AnswerverifiedShow Answer

Which of the following is illegal under federal labor law?

Correct AnswerverifiedShow Answer

(Last Word) The dispute over the pay of chief executive officers (CEOs) of U.S.corporations hinges on whether or not such pay:

Correct AnswerverifiedShow Answer

As compared to a purely competitive labor market,in a nonunionized monopsonistic labor market,wages:

Correct AnswerverifiedShow Answer

Suppose in some economy there are 100 million workers;8 million of those workers work in retail trade,and 2 million of the retail workers belong to unions.Total union membership in this economy is 30 million.The rate of unionization in the economy is:

Correct AnswerverifiedShow Answer

Many economists are critical of the minimum wage because they believe that it:

Correct AnswerverifiedShow Answer

Occupational licensing:

Correct AnswerverifiedShow Answer

The electricians' union is a good example of:

Correct AnswerverifiedShow Answer

The real wage will rise if the nominal wage:

Correct AnswerverifiedShow Answer

Suppose the MRP of a firm's 12th worker is $22 and the worker's marginal wage cost is $16.We can say with certainty that the firm:

Correct AnswerverifiedShow Answer

If a firm is hiring a certain type of labor under purely competitive conditions:

Correct AnswerverifiedShow Answer

Which of the following might be expected to increase union membership?

Correct AnswerverifiedShow Answer

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage) ,its:

Correct AnswerverifiedShow Answer

Economists regard expenditures on education as investments because:

Correct AnswerverifiedShow Answer

Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:

Correct AnswerverifiedShow Answer

The labor supply curve facing a purely competitive firm is perfectly inelastic.

Correct AnswerverifiedShow Answer

A monopsonist's wage cost in hiring an additional worker is the:

Correct AnswerverifiedShow Answer

A monopsonistic employer may sell its product in a competitive market.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Suppose the MRP of a firm's 12^th worker is $22 and the worker's marginal wage cost is $16.We can say with certainty that the firm:

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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