Question 1

An industry would be likely to lay off workers following

Accepted Answer

A)  an increase in the price of the firm's product.
B)  an increase in the marginal revenue product of labor.
C)  the imposition of a new minimum wage below the current equilibrium wage.
D)  an industrial union's push of wages above the MRP of labor.

Question 2

If the nominal wage rises by 6 percent and the price level falls by 2 percent, the real wage will

Accepted Answer

A)  be unaffected.
B)  rise by 4 percent.
C)  fall by 4 percent.
D)  rise by 8 percent.

Question 3

The nominal annual wage increases from $20,000 to $21,000, while the price level increases by 7 percent.In this case, the percentage change in the real annual wage is about

Accepted Answer

A)  −1 percent.
B)  −2 percent.
C)  3 percent.
D)  5 percent.

Question 4

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.

Question 5

Collective bargaining occurs under a framework of rules established in the

Accepted Answer

A)  Sherman Act.
B)  Clayton Act.
C)  National Labor Relations Act.
D)  Employer-Employee Dispute Act.

Question 6

The American Medical Association, a physicians' union, is a good example of a(n)

Accepted Answer

A)  demand-enhancing union.
B)  craft union.
C)  inclusive union.
D)  industrial union.

Question 7

Compensating differences in wages

Accepted Answer

A)  compensate workers for differences in their human capital.
B)  reward workers differently based on differences in the desirability of jobs.
C)  describe the tendency for the wages of all occupations to adjust to the median level.
D)  do not exist if jobs have different nonmonetary characteristics.

Question 8

A bilateral monopoly case is a situation where a firm is a monopolist in its product market and is also a monopsonist in the market where it acquires its major resource.

Accepted Answer

A) True 
 B)False

Question 9

A firm that hires labor and sells its product both in purely competitive markets will

Accepted Answer

A)  have a horizontal demand curve for labor.
B)  face a downward-sloping demand curve for its product.
C)  have a downward-sloping demand curve for labor.
D)  have a horizontal supply curve for its product.

Question 10

Right-to-work laws in some states prohibit the closed-shop and agency-shop union setups.

Accepted Answer

A) True 
 B)False

Question 11

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.

Question 12

Occupational licensing laws were originally created to attain the following goals, except to

Accepted Answer

A)  protect the consumers in specific markets from harm.
B)  foster trust among customers of service providers in specific industries.
C)  ensure that service providers in certain industries met high standards of expertise.
D)  reduce the supply of service providers in industries that the government wanted to shrink.

Question 13

Unions prefer

Accepted Answer

A)  open shops to agency shops.
B)  agency shops to closed shops.
C)  agency shops to union shops.
D)  union shops to agency shops.

Question 14

Noncompeting groups of workers are the result of geographic immobility.

Accepted Answer

A) True 
 B)False

Question 15

A monopsonist in equilibrium will hire labor at a level where MRP = MRC > W.

Accepted Answer

A) True 
 B)False

Question 16

In which of the following U.S.occupations is the rate of unionization the lowest?

Accepted Answer

A)  transportation workers
B)  teachers
C)  legal workers
D)  sales workers

Question 17

State right-to-work laws

Accepted Answer

A)  have been enacted by over one-half of the states in the nation.
B)  make yellow dog contracts illegal.
C)  allow for union shops while prohibiting closed shops.
D)  make union and agency shops illegal.

Question 18

Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode, New Mexico.Also, suppose that this labor force is highly immobile.Economists would describe this employer as a(n)

Accepted Answer

A)  monopolist.
B)  oligopolist.
C)  monopsonist.
D)  monopolistic competitor.

Question 19

The principal-agent problem arises in labor markets because

Accepted Answer

A)  a firm may realize excessively large profits.
B)  workers may provide less-than-expected work effort.
C)  compensating wage differences do not pay for differences in the nonmonetary aspects of jobs.
D)  human capital investments vary among workers.

Question 20

Education is a form of human capital, and it helps explain wage differentials.Topic: The Minimum-Wage Controversy

Accepted Answer

A) True 
 B)False

Exam 17: Wage Determination

Noncompeting groups of workers are the result of geographic immobility.

Correct AnswerverifiedShow Answer

A monopsonist in equilibrium will hire labor at a level where MRP = MRC > W.

Correct AnswerverifiedShow Answer

If the nominal wage rises by 6 percent and the price level falls by 2 percent, the real wage will

Correct AnswerverifiedShow Answer

Collective bargaining occurs under a framework of rules established in the

Correct AnswerverifiedShow Answer

Occupational licensing laws were originally created to attain the following goals, except to

Correct AnswerverifiedShow Answer

A profit-maximizing firm will

Correct AnswerverifiedShow Answer

Right-to-work laws in some states prohibit the closed-shop and agency-shop union setups.

Correct AnswerverifiedShow Answer

Education is a form of human capital, and it helps explain wage differentials.Topic: The Minimum-Wage Controversy

Correct AnswerverifiedShow Answer

State right-to-work laws

Correct AnswerverifiedShow Answer

A bilateral monopoly case is a situation where a firm is a monopolist in its product market and is also a monopsonist in the market where it acquires its major resource.

Correct AnswerverifiedShow Answer

The nominal annual wage increases from $20,000 to $21,000, while the price level increases by 7 percent.In this case, the percentage change in the real annual wage is about

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 principal-agent problem arises in labor markets because

Correct AnswerverifiedShow Answer

Compensating differences in wages

Correct AnswerverifiedShow Answer

A firm that hires labor and sells its product both in purely competitive markets will

Correct AnswerverifiedShow Answer

Unions prefer

Correct AnswerverifiedShow Answer

An industry would be likely to lay off workers following

Correct AnswerverifiedShow Answer

In which of the following U.S.occupations is the rate of unionization the lowest?

Correct AnswerverifiedShow Answer

The American Medical Association, a physicians' union, is a good example of a(n)

Correct AnswerverifiedShow Answer

Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode, New Mexico.Also, suppose that this labor force is highly immobile.Economists would describe this employer as a(n)

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified