Chapter 16: Labor Unions

Chapter 16: Labor Unions

Multiple Choice Questions

THE LABOR MARKET

1. The term labor suppl !an be "e#ine" as the: A$ Total number o# people %ho are emplo able. B$ Total number o# people in pai" emplo ment. C$ &illin'ness an" abilit o# people to %or( at alternati)e %a'e rates in a 'i)en perio" o# time* ceteris paribus. +$ Total number o# in"i)i"uals %ho are either emplo e" or a!ti)el see(in' emplo ment. Ans%er: C T pe: +e#inition ,a'e: --6

.. As lon' as a""itional %or(ers are attra!te" into the labor #or!e b hi'her %a'es* the mar(et labor suppl !ur)e is: A$ /erti!al. B$ ,er#e!tl elasti!. C$ 0e'ati)el slope". +$ Up%ar"1slopin'. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: --6

-. The 2uantit o# labor supplie" )aries "ire!tl * ceteris paribus* %ith: A$ The %a'e rate. C$ The )alue o# leisure time. B$ ,a roll ta3es. +$ The elasti!it o# labor suppl . Ans%er: A T pe: Basi! Un"erstan"in' ,a'e: --6

4. The "eman" #or labor is: A$ The total number o# people %ho %ant to %or(. B$ The 2uantit o# labor emplo ers are %illin' an" able to hire at alternati)e %a'e rates. C$ The %illin'ness an" abilit o# people to %or( at alternati)e %a'e rates. +$ Up%ar" slopin'. Ans%er: B T pe: +e#inition ,a'e: --6

5. 6in!e #irms are %illin' to hire a""itional %or(ers at lo%er %a'es* the mar(et labor "eman" !ur)e is: A$ /erti!al. B$ ,er#e!tl elasti!. C$ +o%n%ar" slopin'. +$ Up%ar" slopin'. Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: --6

6. Ceteris paribus* the 2uantit o# labor "eman"e" )aries in"ire!tl %ith: A$ The elasti!it o# labor suppl . C$ The )alue o# leisure time. B$ ,a roll ta3es. +$ The %a'e rate.

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Chapter 16: Labor Unions

Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: --6

7. At the e2uilibrium %a'e in the labor mar(et: A$ E)er in"i)i"ual %ho "esires a 8ob is emplo e". B$ The MR, o# labor is ma3imi9e". C$ The labor suppl !ur)e interse!ts the labor "eman" !ur)e. +$ The M,, o# labor is 9ero. Ans%er: C T pe: +e#inition ,a'e: --6

LABOR U0:O06

;. T pi!al 'oals o# a labor union in the Unite" 6tates in!lu"e: A$ Hi'her %a'es* better %or(in' !on"itions* more 8ob se!urit . B$ Hi'her pro#it* lo%er output* 'reater pro"u!ti)it . C$ Less %or(* more %or(ers* more o)ertime. +$ All o# the abo)e. Ans%er: A T pe: Basi! Un"erstan"in' ,a'e: --7

<. T pi!al 'oals o# a labor union in the Unite" 6tates in!lu"e: A$ Hi'her pro#it* hi'her output* 'reater pro"u!ti)it . B$ Hi'her %a'es* better %or(in' !on"itions* more non1%a'e !ompensation. C$ More )a!ation time* in!rease" union membership* more #le3ible %or(pla!e rules. +$ More bene#its* hi'her pa * in!rease" union membership. Ans%er: B T pe: Basi! Un"erstan"in' ,a'e: --7

1=. T pi!al 'oals o# a labor union in the Unite" 6tates in!lu"e: A$ :mpro)e" retirement bene#its. C$ Better health insuran!e. B$ More )a!ation time. +$ All o# the abo)e. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: --7

11. Cra#t unions represent %or(ers: A$ O# a parti!ular !ompan . B$ :n a parti!ular in"ustr . Ans%er: + T pe: +e#inition ,a'e: --7

C$ :n a parti!ular area. +$ &ith a parti!ular s(ill.

1.. &hi!h o# the #ollo%in' is an e3ample o# an in"ustrial union> A$ The :nternational Brotherhoo" o# Ele!tri!al &or(ers. B$ The Carpenters Union.

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C$ The Unite" Auto &or(ers. +$ The A?L1C:O. Ans%er: C T pe: +e#inition ,a'e: --7

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Chapter 16: Labor Unions

1-. The "i##eren!e bet%een !ra#t unions an" in"ustrial unions is that in"ustrial unions usuall : A$ Are or'ani9e" alon' "emo!rati! lines* %hile !ra#t unions are un"emo!rati!. B$ :n!lu"e %or(ers in an in"ustr * %hile !ra#t unions represent %or(ers %ith a parti!ular s(ill. C$ :n!lu"e %or(ers %ith a parti!ular s(ill* %hile !ra#t unions represent %or(ers in an in"ustr . +$ ?lourish in in"ustries* %hile !ra#t unions "ominate in smaller* !ra#t pro"u!tion. Ans%er: B T pe: +e#inition ,a'e: --7

THE ,OTE0T:AL U6E O? ,O&ER

14. The mar'inal %a'e is measure" b : A$ The per!enta'e !han'e in %a'es "i)i"e" b the per!enta'e !han'e in the 2uantit o# labor emplo e". B$ Total %a'es pai" "i)i"e" b the 2uantit o# labor emplo e". C$ The !han'e in total %a'es pai" "i)i"e" b the !han'e in the 2uantit o# labor emplo e". +$ The !han'e in total %a'es pai" "i)i"e" b the !han'e in the 2uantit o# output pro"u!e". Ans%er: C T pe: +e#inition ,a'e: --;

15. The mar'inal %a'e is: A$ Chan'e in total %a'es pai" !han'e in 2uantit o# labor emplo e". B$ Chan'e in total re)enue !han'e in 2uantit o# labor emplo e". C$ Chan'e in %a'e rate !han'e in 2uantit o# labor supplie". +$ Chan'e in total %a'es !han'e in 2uantit o# output pro"u!e". Ans%er: A T pe: Anal ti!al ,a'e: --;

16. :# 1 %or(er %ill be hire" b a #irm at a %a'e rate o# @1= per hour* but a se!on" %or(er %ill be hire" onl i# the %a'e rate #alls to @< per hour* then at an emplo ment le)el o# . %or(ers* the mar'inal %a'e is: A$ @1< per hour. B$ @1; per hour. C$ @< per hour. +$ @; per hour. Ans%er: + T pe: Anal ti!al ,a'e: --;

17. :# 1= %or(ers %ill be hire" b a #irm at a %a'e rate o# @15 per hour* but the ele)enth %or(er %ill be hire" onl i# the %a'e rate #alls to @14 per hour* then the mar'inal %a'e o# the ele)enth %or(er is: A$ @4 per hour. B$ @14 per hour. C$ @154 per hour. +$ @11 per hour. Ans%er: A T pe: Anal ti!al ,a'e: --;

1;. :# .= %or(ers %ill be hire" b a #irm at a %a'e rate o# @.5 per hour* but the .1st %or(er %ill be hire" onl i# the %a'e rate #alls to @.4 per hour* then the mar'inal %a'e o# the .1st %or(er is: A$ @5=4 per hour. B$ @4 per hour. C$ @.4 per hour. +$ @1- per hour. Ans%er: B T pe: Anal ti!al ,a'e: --;

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Chapter 16: Labor Unions

1<. Unions must %orr about the mar'inal %a'e be!ause it in"i!ates the: A$ &a'e at %hi!h "eman" an" suppl interse!t. B$ Opportunit %a'e a)ailable to %or(ers. C$ E##e!t on the total %a'e bill o# hirin' a""itional %or(ers. +$ Mar'inal !ost o# hirin' an a""itional %or(er. Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: --;

.=. A union shoul" !al!ulate the mar'inal %a'e to "etermine ho% a""itional labor %ill !han'e the: A$ Total %a'es pai". C$ A)era'e %a'e. B$ Total re)enue #or the emplo in' #irm. +$ Labor suppl . Ans%er: A T pe: +e#inition ,a'e: --;

.1. 6uppose that t%o !ompetin' unions e)ol)e" in an in"ustr %here onl one pre)iousl e3iste". The most li(el result %oul" be: A$ Hi'her %a'es onl be!ause o# in!rease" bar'ainin' po%er. B$ Lo%er output onl be!ause o# in!rease" bar'ainin' po%er. C$ &a'es an" output !loser to !ompetiti)e le)els. +$ Hi'her %a'es an" lo%er output be!ause o# in!rease" bar'ainin' po%er. Ans%er: C T pe: Comple3 Un"erstan"in' ,a'e: --<

... Total %a'es pai" to labor are ma3imi9e" %hen %or(ers are hire" up to the point %here the: A$ Mar'inal %a'e is e2ual to the mar(et %a'e. C$ Mar(et %a'e e2uals the mar'inal #a!tor !ost. B$ +eman" #or labor e2uals mar'inal #a!tor !ost. +$ Mar'inal %a'e e2uals 9ero. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: --<

.-. The "istin!tion bet%een the mar(et %a'e an" the mar'inal %a'e re#le!ts the: A$ La% o# "iminishin' mar'inal utilit . C$ +o%n%ar" slope o# the labor "eman" !ur)e. B$ La% o# in!reasin' returns. +$ La% o# suppl . Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: --<

.4. 6uppose a union !olle!ts "ues at 1 per!ent o# the total %a'e bill. Ma3imum "ues Aan" ma3imum total labor !ost$ %oul" be a!hie)e" b hirin' the amount o# labor %here: A$ The suppl !ur)e interse!ts the mar'inal %a'e !ur)e. B$ The mar'inal %a'e is 9ero. C$ The #a!tor "eman" !ur)e interse!ts the #a!tor suppl !ur)e. +$ The mar'inal %a'e !ur)e interse!ts the mar'inal #a!tor !ost !ur)e. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: --<

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.5. Be!ause unions #a!e a "o%n%ar"1slopin' "eman" !ur)e #or labor* the optimal union %a'e rate at a 'i)en emplo ment le)el is al%a s: A$ E2ual to the labor1"eman" !ur)e. C$ Abo)e the labor1suppl !ur)e. B$ Abo)e the mar'inal %a'e. +$ All o# the abo)e. Ans%er: + T pe: Comple3 Un"erstan"in' ,a'e: --<

.6. ?rom a unionBs perspe!ti)e* the optimal le)el o# emplo ment is "etermine" b the interse!tion o# the: A$ Labor "eman" !ur)e an" the labor suppl !ur)e. B$ Mar'inal %a'e !ur)e an" the labor suppl !ur)e. C$ Labor "eman" !ur)e an" the mar'inal %a'e !ur)e. +$ Labor "eman" !ur)e an" the mar'inal #a!tor !ost !ur)e. Ans%er: B T pe: Basi! Un"erstan"in' ,a'e: -4=

.7. At a union1impose" le)el o# emplo ment: A$ Emplo ment is lo%er than at the !ompetiti)e e2uilibrium. B$ The mar'inal %a'e is ne'ati)e. C$ Emplo ment an" %a'es are both at the ma3imum possible le)els. +$ Emplo ment !oul" not be in!rease" b re"u!in' the %a'e rate. Ans%er: A T pe: Basi! Un"erstan"in' ,a'e: -4=

.;. :# the sellers o# labor in a !ompetiti)e mar(et "e!i"e" to unioni9e* ceteris paribus* then %a'es %oul": A$ Rise an" emplo ment %oul" #all. C$ ?all an" emplo ment %oul" #all. B$ Rise an" emplo ment %oul" rise. +$ ?all an" emplo ment %oul" rise. Ans%er: A T pe: Comple3 Un"erstan"in' ,a'e: -4=

.<. :# the emplo ers in a !ompetiti)e labor mar(et "e!i"e" to !ollu"e* ceteris paribus* it is li(el that %a'es %oul": A$ Rise an" emplo ment %oul" #all. C$ ?all an" emplo ment %oul" #all. B$ Rise an" emplo ment %oul" rise. +$ ?all an" emplo ment %oul" rise. Ans%er: C T pe: Comple3 Un"erstan"in' ,a'e: -4=

-=. To be su!!ess#ul in !han'in' %a'e rates an" emplo ment !on"itions* labor unions nee" to ha)e !ontrol o)er onl : A$ Their o%n members. B$ The labor suppl "e!isions o# in"i)i"ual %or(ers. C$ The MR, o# emplo ers. +$ The pro"u!tion "e!ision o# emplo ers. Ans%er: B T pe: Basi! Un"erstan"in' ,a'e: -4=

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Chapter 16: Labor Unions

-1. A %or(pla!e that re2uires %or(ers to be!ome a member %ithin thirt "a s o# bein' hire" b a #irm is: A$ A !ra#t union. B$ An in"ustrial union. C$ A union shop. +$ The A?L1C:O. Ans%er: C T pe: +e#inition ,a'e: -4=

-.. Union shops are sub8e!t to potential !ompetition: A$ Be!ause some union shop %or(ers re#use to 8oin the union. B$ ?rom repla!ement or substitute %or(ers. C$ 6in!e most union members "o not ta(e stri(es seriousl . +$ All o# the abo)e. Ans%er: B T pe: +e#inition ,a'e: -4=

THE ECTE0T O? U0:O0 ,O&ER

--. The unioni9ation ratio represents the: A$ ,er!enta'e o# the total labor #or!e belon'in' to unions. B$ Mar(et po%er o# unions relati)e to the mar(et po%er o# nonunion labor. C$ ,roportion o# in"ustries that are "ominate" b unions. +$ Annual per!enta'e 'ro%th in the total number o# unions. Ans%er: A T pe: Basi! Un"erstan"in' ,a'e: -41

-4. The unioni9ation ratio: A$ Has been in stea" "e!line #or o)er 4= ears. C$ :s risin' in the Unite" 6tates. B$ :n"i!ates lo%er union po%er %ith hi'her ratios. +$ All o# the abo)e. Ans%er: A T pe: Basi! Un"erstan"in' ,a'e: -41

-5. The !urrent unioni9ation ratio #or the U.6. labor #or!e: A$ Has been #allin' sin!e the mi"11<5=s. B$ Re#le!ts the relati)e "e!line o# U.6. manu#a!turin'. C$ :s belo% .= per!ent. +$ All o# the abo)e. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: -41

EM,LODER ,O&ER

-6. A monopson : A$ :s a mar(et in %hi!h there is a sin'le bu er. B$ :s !ontrolle" b a union. C$ O!!urs %hen the seller has "e!linin' lon'1run a)era'e !osts. +$ O!!urs %hen the bu er has "e!linin' lon'1run a)era'e !osts.

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Chapter 16: Labor Unions

Ans%er: A T pe: +e#inition ,a'e: -4-

-7. ?or a monopsonist* the: A$ Mar'inal #a!tor !ost #or labor e3!ee"s the %a'e rate. B$ +eman" #or labor is the same as the mar'inal re)enue pro"u!t o# labor. C$ +eri)e" "eman" #or labor is "o%n%ar"1slopin'. +$ All o# the abo)e. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: -4-

-;. &hi!h o# the #ollo%in' labor mar(ets is !lassi#ie" as a monopson > A$ There are man emplo ers an" ea!h "eman"s the same t pe o# labor. B$ There are se)eral emplo ers an" ea!h "eman"s the same t pe o# labor. C$ There are three emplo ers an" ea!h "eman"s the same t pe o# labor. +$ There is one emplo er #or a spe!i#i! t pe o# labor. Ans%er: + T pe: +e#inition ,a'e: -4-

-<. :# there are man emplo ers in a mar(et an" ea!h has limite" mar(et po%er* the "eman" #or labor is li(el to be !hara!teri9e" as: A$ Competiti)e. B$ Monopsonisti!. C$ Oli'opolisti!. +$ Monopolisti!. Ans%er: A T pe: +e#inition ,a'e: -4-

4=. 6uppose a #irm #in"s that it must raise %a'es #or all o# its %or(ers e)er time it tries to e3pan" its %or( #or!e. This means: A$ :t %ill pro"u!e more than it %oul" in a !ompetiti)e labor mar(et. B$ The mar'inal #a!tor !ost !ur)e is belo% the a)era'e !ost o# labor !ur)e. C$ The #irm has mar(et po%er. +$ The labor mar(et is per#e!tl !ompetiti)e. Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: -44

41. The "istin'uishin' !hara!teristi! o# labor mar(et monopsonies is the #a!t that: A$ The !an hire an number o# %or(ers the %ant %ithout a##e!tin' the mar(et %a'e. B$ Their hirin' "e!ision "ire!tl a##e!ts the mar(et %a'e rate. C$ The !an pa an %a'e the %ant #or the number o# %or(ers the nee". +$ All o# the abo)e. Ans%er: B T pe: Basi! Un"erstan"in' ,a'e: -44

4.. A monopsonist must pa a hi'her net %a'e rate to hire a""itional %or(ers be!ause as a sin'le: A$ 6eller it has mar(et po%er. B$ 6eller it "oes not ha)e to !ompete %ith other #irms #or !ustomers. C$ Bu er in the mar(et* it #a!es an up%ar"1slopin' suppl !ur)e #or labor.

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Chapter 16: Labor Unions

+$ Bu er in the mar(et* it #a!es a #lat suppl !ur)e #or labor. Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: -44

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Chapter 16: Labor Unions

4-. The mar'inal #a!tor !ost #or labor is: A$ The net !ost to a monopsonist o# hirin' an a""itional unit o# labor. B$ The net 'ain to a monopolist seller o# labor i# an a""itional unit o# labor is hire". C$ The "eman" #or labor. +$ The suppl o# labor. Ans%er: A T pe: +e#inition ,a'e: -44

44. The mar'inal #a!tor !ost is: A$ Chan'e in %a'e rate !han'e in 2uantit o# labor "eman"e". B$ Chan'e in total re)enue !han'e in 2uantit o# labor emplo e". C$ Chan'e in total %a'es !han'e in 2uantit o# labor supplie". +$ Chan'e in total %a'es !han'e in 2uantit o# output pro"u!e". Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: -44

45. The mar'inal #a!tor !ost #or a bu er %ith mar(et po%er: A$ :s abo)e the mar'inal re)enue pro"u!t !ur)e. C$ :s belo% the labor suppl !ur)e. B$ :s abo)e the %a'e rate pai" b a monopsonist. +$ :s abo)e the labor "eman" !ur)e. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: -44

46. A pro#it1ma3imi9in' monopsonist %ill hire %or(ers at the point %here the mar'inal #a!tor !ost !ur)e interse!ts the: A$ Mar'inal %a'e !ur)e. C$ Labor suppl !ur)e. B$ E2uilibrium %a'e. +$ Mar'inal re)enue pro"u!t !ur)e. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: -45

47. ?rom an e!onomi! perspe!ti)e* the e##orts o# pro#essional #ootball* baseball an" bas(etball pla ers in the U.6. to %in the ri'ht to be!ome #ree a'ents %as reall an e##ort to: A$ Raise %a'es to the le)el o# the pla erBs MR,. B$ Raise %a'es to !ompetiti)e le)els. C$ Re"u!e the suppl o# pro#essional pla ers an" thus in!rease %a'es. +$ Raise %a'es abo)e the le)el o# the pla erBs MR,. Ans%er: A T pe: Comple3 Un"erstan"in' ,a'e: -45

4;. The %a'e rate that a monopsonist %oul" #in" most pro#itable is the %a'e: A$ At the interse!tion o# the mar'inal %a'e !ur)e an" the mar'inal !ost !ur)e. B$ On the labor suppl !ur)e !orrespon"in' to the le)el o# emplo ment at %hi!h the mar'inal #a!tor !ost !ur)e A#or labor$ interse!ts the labor "eman" !ur)e. C$ On the labor "eman" !ur)e !orrespon"in' to the le)el o# emplo ment at %hi!h the mar'inal #a!tor !ost e2uals mar(et suppl . +$ On the labor "eman" !ur)e at the %a'e %here the mar'inal #a!tor !ost !ur)e interse!ts the "eman" !ur)e #or labor.

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Chapter 16: Labor Unions

Ans%er: B T pe: Basi! Un"erstan"in' ,a'e: -45

4<. 6uppose a monopsonist must pa @1= per hour to attra!t 1= %or(ers. :# the same monopsonist must raise its %a'e to @11 per hour to attra!t the ele)enth %or(er* %hat is its mar'inal #a!tor !ost #or labor> A$ @1.1 per hour. B$ @.1 per hour. C$ @11 per hour. +$ @1= per hour. Ans%er: B T pe: Anal ti!al ,a'e: -45

5=. 6uppose a monopsonist pa s its 1= %or(ers @15 per hour. :# the same monopsonist must raise its %a'e to @16 to attra!t the ele)enth emplo ee* %hat is its mar'inal #a!tor !ost #or labor> A$ @176 per hour. B$ @16 per hour. C$ @.6 per hour. +$ @15 per hour. Ans%er: C T pe: Anal ti!al ,a'e: -45

51. The pro#it1ma3imi9in' le)el o# labor* in a union "ominate" labor mar(et* o!!urs %here: A$ Mar'inal %a'e E mar'inal #a!tor !ost. C$ Mar'inal %a'e E 9ero. B$ MR, E mar'inal %a'e. +$ MR, E mar'inal #a!tor !ost. Ans%er: + T pe: Anal ti!al ,a'e: -46

5.. &h is the monopolistBs optimal %a'e an" emplo ment le)el "i##erent than the !ompetiti)e e2uilibrium %a'e an" emplo ment le)el> A$ Monopsonists ten" to o)erpro"u!e an" a)oi" mar'inal !ost pri!in'. B$ The MR, o# the last %or(er hire" is 'reater than the )alue o# the leisure time 'i)en up b that %or(er. C$ The MR, o# the last %or(er hire" is less than the )alue o# the leisure time 'i)en up b that %or(er. +$ The M,, o# the last %or(er hire" is 'reater than the )alue o# the leisure time 'i)en up b that %or(er. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: -46

COLLECT:/E BARFA:0:0F

5-. :n a bilateral monopol * %a'es an" emplo ment are "etermine" b : A$ 0e'otiation. B$ The interse!tion o# mar(et suppl an" "eman". C$ The interse!tion o# mar'inal !ost an" mar'inal re)enue pro"u!t. +$ The interse!tion o# mar'inal %a'e an" mar(et "eman". Ans%er: A T pe: Basi! Un"erstan"in' ,a'e: -46

54. :n a bilateral monopol * the le)el o# %a'es %ill be: A$ +etermine" b ne'otiation. B$ Belo% the %a'e %here the mar'inal #a!tor !ost !ur)e interse!ts the labor "eman" !ur)e. C$ Abo)e the %a'e le)el %here the mar'inal %a'e interse!ts the labor suppl !ur)e. +$ All o# the abo)e.

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Chapter 16: Labor Unions

Ans%er: + T pe: Comple3 Un"erstan"in' ,a'e: -46

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Chapter 16: Labor Unions

55. Colle!ti)e bar'ainin' o!!urs: A$ Bet%een parties o# a bilateral monopol in the pro"u!t mar(et. B$ &hen union members )ote on the le)el at %hi!h union "ues shoul" be set. C$ Bet%een bu ers o# labor an" sellers o# labor in the same mar(et. +$ &hen the 'o)ernment inter)enes to en" a stri(e an" arbitrates an a'reement. Ans%er: C T pe: +e#inition ,a'e: -46

56. Colle!ti)e bar'ainin': A$ :n)ol)es "ire!t ne'otiations bet%een labor unions an" emplo ers. B$ Ta(es pla!e %hen unions !ompete to see %ho shoul" represent %or(ers in a 'i)en in"ustr . C$ O!!urs %hen emplo ers "etermine %hi!h union shoul" represent their %or(ers. +$ :s the pro!ess b %hi!h unions "e!i"e %hi!h !ompan shoul" be the #o!us o# %a'e ne'otiations. Ans%er: A T pe: +e#inition ,a'e: -46

57. A mar(et that e3perien!es both stri(es an" lo!(outs at "i##erent times is most li(el !hara!teri9e" b : A$ Monopol . B$ Monopson . C$ Bilateral monopol . +$ Monopolisti! !ompetition. Ans%er: C T pe: +e#inition ,a'e: -46

5;. Compare" to the !ompetiti)e labor mar(et e2uilibrium* the ne'otiate" %a'e an" emplo ment a'reement in the !ase o# a bilateral monopol is li(el to result in: A$ Hi'her %a'es* but lo%er output. C$ Hi'her or lo%er %a'es* but hi'her output. B$ Lo%er %a'es an" lo%er output. +$ Hi'her or lo%er %a'es* but lo%er output. Ans%er: + T pe: Comple3 Un"erstan"in' ,a'e: -46

5<. &hen mana'ement shuts "o%n a plant an" "oes not allo% %or(ers to per#orm their 8obs* there is a: A$ &al(out. B$ Lo!(out. C$ 6tri(e. +$ All o# the abo)e. Ans%er: B T pe: +e#inition ,a'e: -47

6=. :# mana'ement re#uses to allo% %or(ers to %or(* this is an e3ample o#: A$ A lo!(out. B$ The ri'ht to %or(. C$ Colle!ti)e bar'ainin'. +$ A stri(e. Ans%er: A T pe: Basi! Un"erstan"in' ,a'e: -47

61. &hen unioni9e" labor re#uses to %or(* there is: A$ A stri(e. B$ A lo!(out. C$ Colle!ti)e bar'ainin'. Ans%er: A T pe: +e#inition ,a'e: -47

+$ All o# the abo)e.

6.. The re#usal to %or( b unioni9e" labor is an e3ample o#:

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Chapter 16: Labor Unions

A$ Ri'ht to %or(.

B$ A lo!(out.

C$ Colle!ti)e bar'ainin'.

+$ A stri(e.

Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: -47

THE :M,ACT O? U0:O06

6-. Labor unions: A$ Ha)e an impa!t on %a'es. B$ Ha)e an impa!t on pro"u!ti)it . Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: -4;

C$ Are a ma8or politi!al #or!e in the U.6. +$ All o# the abo)e.

64. The e##e!t o# union e3!lusion o# nonunion %or(ers is to: A$ :n!rease the shorta'es o# nonunion %or(ers. B$ Lo%er the %a'es o# nonunion %or(ers. C$ :n!rease the number o# 8obs #or nonunion %or(ers. +$ All o# the abo)e. Ans%er: B T pe: Basi! Un"erstan"in' ,a'e: -4<

65. Unions ma lo%er real %a'es in the nonunion se!tor be!ause: A$ 0onunion #irms ha)e "i##i!ult attra!tin' s(ille" manpo%er a%a #rom the unions. B$ 0onunion #irms a"8ust %a'es to a)oi" the threat o# unioni9ation. C$ &or(ers %ho are "ispla!e" b hi'her %a'es in the unioni9e" se!tor in!rease the labor suppl in the nonunion se!tor. +$ All o# the abo)e. Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: -4<

66. The e3er!ise o# union po%er %ill ten" to: A$ Re"u!e the suppl o# labor a)ailable to nonunion in"ustries. B$ Cause pro#its to be hi'her in unioni9e" in"ustries. C$ :n!rease the suppl o# labor a)ailable to nonunion in"ustries. +$ Cause pro"u!t pri!es to be lo%er in unioni9e" in"ustries. Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: -4<

67. Relati)e to nonunion %a'es* one reason union %a'es are: A$ Hi'her is be!ause unions are more li(el in !apital1intensi)e in"ustries %here %a'es ten" to be hi'her. B$ Lo%er is be!ause unions e3!lu"e %or(ers #rom the mar(et* %hi!h hurts their abilit to raise %a'es. C$ Hi'her is be!ause unions ha)e %or(ers that !ontribute more to so!iet . +$ Lo%er is be!ause the per!enta'e o# the %or( #or!e that is unioni9e" is "e!linin'. Ans%er: A T pe: Basi! Un"erstan"in' ,a'e: -4<

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Chapter 16: Labor Unions

6;. The labor share o# total in!ome is the proportion o# total in!ome earne" b : A$ The unioni9e" %or( #or!e. C$ The nonunioni9e" %or( #or!e. B$ All %or(ers. +$ All househol"s. Ans%er: B T pe: +e#inition ,a'e: -4<

6<. The e##e!t o# unioni9ation is to: A$ Raise both labor share an" !apital share o# total in!ome. B$ Raise labor share an" lo%er !apital share o# total in!ome. C$ Lo%er labor share an" raise !apital share o# total in!ome. +$ Lo%er both labor share an" !apital share o# total in!ome. Ans%er: B T pe: Basi! Un"erstan"in' ,a'e: -4<

7=. Histori!all * onl !ertain o!!upations %ere !onsi"ere" appropriate #or %omen* su!h as tea!hin'* nursin'* or se!retarial %or(. The impa!t o# this "is!rimination in the labor mar(et %as to: A$ ,ossibl raise %a'es in some male1"ominate" o!!upations. B$ Re"u!e %a'es #or %omen. C$ Re"u!e the M,, o# the last %omen hire". +$ All o# the abo)e. Ans%er: + T pe: Comple3 Un"erstan"in' ,a'e: -4<

71. A #irm that attempts to pass alon' the !ost o# hi'her union %a'es to !onsumers in the #orm o# hi'her pri!es %ill be more su!!ess#ul i# the pri!e elasti!it o# "eman" #or its pro"u!t is: A$ :nelasti!. B$ Elasti!. C$ Unitar . +$ ,er#e!tl elasti!. Ans%er: A T pe: Comple3 Un"erstan"in' ,a'e: -4<

7.. ,ro"u!ti)it is: A$ The in)erse o# !ost e##i!ien! . B$ Output per unit o# input. C$ The in!rement o# output pro"u!e" %hen one more unit o# an input is emplo e" in the pro"u!tion pro!ess. +$ All o# the abo)e. Ans%er: B T pe: +e#inition ,a'e: -5=

7-. Unions ha)e ha" an impa!t on U.6. #irms b supportin' %hi!h o# the #ollo%in' t pes o# le'islation> A$ Ci)il ri'hts le'islation. C$ Health an" e"u!ation pro'rams. B$ Minimum %a'e la%s. +$ All o# the abo)e. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: -5=

THE ECO0OMD TOMORRO&

,a'e 15

Chapter 16: Labor Unions

74. The "e!line in unioni9ation is "ue in part to the rapi" relati)e 'ro%th o#: A$ Manu#a!turin' in the Unite" 6tates. C$ &orl"%i"e !ompetition. B$ Lar'e #irms relati)e to small #irms. +$ All o# the abo)e. Ans%er: C T pe: Basi! Un"erstan"in' ,a'e: -5=

75. The "e!line in unioni9ation !an be e3plaine" b the: A$ Relati)e "e!line in manu#a!turin'. C$ :n!rease" 'lobal !ompetition. B$ +o%nsi9in' o# ma8or !orporations. +$ All o# the abo)e. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: -5=

76. The tren" in the U.6. to%ar" the mer'er o# unions is "ri)en b the labor mo)ementBs "esire to: A$ :n!rease representation. C$ Enhan!e their politi!al po%er. B$ Fain #inan!ial stren'th. +$ All o# the abo)e. Ans%er: + T pe: Basi! Un"erstan"in' ,a'e: -5=

Use the #ollo%in' to ans%er 2uestions 7717<: Table 16.1 sho%s the number o# %or(ers a #irm is %illin' to hire per hour at "i##erent %a'e rates. Complete the table b !omputin' the total %a'e bill Atotal labor !ost$ an" the mar'inal %a'e. Then use the table to ans%er the in"i!ate" 2uestions. Table 16.1
W a g e r a te (d o lla r s p er h o u r) @.6 .. 1; 14 1= Labor dem anded (w o rk e rs) = . 4 6 ; T o ta l la b o r c o s t-h o u r ly (d o lla r s p e r h o u r ) GGG GGG GGG GGG GGG M a rg in a l w a g e (d o lla r s p e r w o rker) 1111 GGG GGG GGG GGG

77. &hi!h o# the #ollo%in' %a'es* in Table 16.1* %oul" allo% the most %or(ers to be hire"> A$ @1= per hour. B$ @14 per hour. C$ @1; per hour. +$ @.. per hour. Ans%er: A T pe: Anal ti!al ,a'e: -4=

7;. Assume the union !olle!ts "ues at 1 per!ent o# the total %a'e bill. Ho% man %or(ers %oul" the union %ant hire" in Table 16.1 i# its 'oal %as to ma3imi9e the amount o# "ues !olle!te"> A$ .. B$ 4. C$ 6. +$ ;.

,a'e 16

Chapter 16: Labor Unions

Ans%er: C T pe: Anal ti!al ,a'e: -4=

7<. Assume the union !olle!ts "ues at 1 per!ent o# the total %a'e bill. At %hat %a'e in Table 16.1 %oul" the union ma3imi9e the amount o# "ues it !olle!te"> A$ @1= per hour. B$ @14 per hour. C$ @1; per hour. +$ @.. per hour. Ans%er: B T pe: Anal ti!al ,a'e: -4=

,a'e 17

Chapter 16: Labor Unions

Use the #ollo%in' to ans%er 2uestions ;=1;4: Figure 16.1

@ S u p p ly & a ' e R a te A" o lla rs p e r h o u r$ 11 ;

5 4 M a rg in a l W age 1= 116

D em and

.4

-.

H u a n tit o # L a b o r A% o r( e rs p e r h o u r$

;=. &hat is the !ompetiti)e e2uilibrium %a'e an" emplo ment le)el in ?i'ure 16.1> A$ @;I 1= %or(ers. B$ @5I 16 %or(ers. C$ @4I 1- %or(ers. +$ @11I -. %or(ers. Ans%er: B T pe: Anal ti!al ,a'e: -45

;1. &hat is the optimal %a'e an" emplo ment le)el #rom the perspe!ti)e o# a union in ?i'ure 16.1> A$ @11I -. %or(ers. B$ @5I 16 %or(ers. C$ @4I 1- %or(ers. +$ @;I 1= %or(ers. Ans%er: + T pe: Anal ti!al ,a'e: -45

;.. &hat is the "i##eren!e bet%een the !ompetiti)e le)el o# emplo ment an" the union optimum le)el o# emplo ment in ?i'ure 16.1> A$ .. %or(ers. B$ 6 %or(ers. C$ - %or(ers. +$ Jero. Ans%er: B T pe: Anal ti!al ,a'e: -45

;-. Ho% man %or(ers are %illin' an" able to %or( at the optimal union %a'e rate in ?i'ure 16.1> A$ 1=. B$ 1-. C$ 16. +$ .4. Ans%er: + T pe: Anal ti!al ,a'e: -45

;4. &hi!h o# the #ollo%in' in"i!ates the number o# %or(ers %ho are %illin' to %or( but are unemplo e" at the optimal union %a'e rate in ?i'ure 16.1> A$ Jero. B$ 6. C$ 14. +$ ...

,a'e 1;

Chapter 16: Labor Unions

Ans%er: C T pe: Anal ti!al ,a'e: -45

Use the #ollo%in' to ans%er 2uestions ;51;7: Figure 16.2

( '
& AF E RATE A" o lla r s p e r h o u r $

L abor suppl

& % $ # " ! -" "! #! $! %! &! '! (! ! )! "!! M a r' in a l & a ' e ""! L abor "em an" "#!

H U A 0 T :T D O ? L A B O R A% o r( e rs p e r h o u r$

;5. Re#er to ?i'ure 16... &hat is the !ompetiti)e e2uilibrium %a'e an" emplo ment le)el> A$ @- per hour an" 4= %or(ers. C$ @4 per hour an" 6= %or(ers. B$ @5 per hour an" 4= %or(ers. +$ @- per hour an" 7= %or(ers. Ans%er: C T pe: Comple3 Un"erstan"in' ,a'e: -4=

;6. Re#er to ?i'ure 16.. #or a unioni9e" labor mar(et. The optimal !ombination o# %a'es an" emplo ment #rom the unionBs stan"point is: A$ @- per hour an" 4= %or(ers. C$ @4 per hour an" 6= %or(ers. B$ @5 per hour an" 4= %or(ers. +$ @- per hour an" 7= %or(ers. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: -4=

;7. Re#er to ?i'ure 16... &hat is the "i##eren!e bet%een the !ompetiti)e emplo ment le)el an" the union optimum emplo ment le)el> A$ 1= %or(ers. B$ .= %or(ers. C$ -= %or(ers. +$ 4= %or(ers. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: -4=

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Chapter 16: Labor Unions

Use the #ollo%in' to ans%er 2uestions ;;1<=: Figure 16.3

M a r' in a l ? a ! to r C o s t 11 1= L ab o r su p p l < ;
& A F E RATE A" o lla rs p e r h o u r$

7 6 5 4 . 1 = 1= .= -= 4= 5= 6= 7= ;= <= L abor "em an"

H U A 0 T :T D O ? L A B O R A% o r( e rs p e r h o u r$

;;. Re#er to ?i'ure 16.- #or a monopsonist emplo er. ?rom the monopsonistBs stan"point* the optimal %a'e an" emplo ment le)el %oul" be: A$ @11 per hour an" 5= emplo ees. C$ @< per hour an" 4= emplo ees. B$ @7 per hour an" 5= emplo ees. +$ @6 per hour an" 4= emplo ees. Ans%er: + T pe: Comple3 Un"erstan"in' ,a'e: -45

;<. :n ?i'ure 16.-* %hat is the "i##eren!e bet%een the mar'inal re)enue pro"u!t o# the last %or(er hire" b the monopsonist an" the %a'es the monopsonist pa s the last %or(er> A$ @- per hour. B$ @5 per hour. C$ @4 per hour. +$ @- per hour. Ans%er: A T pe: Comple3 Un"erstan"in' ,a'e: -45

<=. Re#er to ?i'ure 16.-. &hat is the !ompetiti)e le)el o# %a'es an" emplo ment> A$ 11 per hour an" 5= %or(ers. C$ @< per hour an" 4= %or(ers. B$ @7 per hour an" 5= %or(ers. +$ @6 per hour an" 4= %or(ers. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: -45

,a'e .=

Chapter 16: Labor Unions

Use the #ollo%in' to ans%er 2uestion <1: Figure 16.4

L abo r su ppl 61 L ab or sup pl 6.

.

& A F E R A TE

& &

L abor + em an" H 1 H . H U A 0 T :T D O ? L A B O R

<1. Re#er to ?i'ure 16.4 #or a !ompetiti)e labor mar(et. A shi#t in labor suppl #rom 6 to 6 !oul" be !ause"
1 .

b : A$ B$ C$ +$

An in!rease in the %a'e rate. The unioni9ation o# another labor mar(et. An in!rease in the pri!e o# the pro"u!t bein' pro"u!e". An in!rease in the pri!e o# ma!hiner use" in the pro"u!tion o# the pro"u!t.

Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: -46

The #ollo%in' multiple1!hoi!e 2uestions re2uire !riti!al thin(in' about *n the +ews an" World ,iew arti!les that appeare" in the te3t.

<.. An *n the +ews arti!le states KA#ter t%o months o# ne'otiations* the UA& an" FM si'ne" a ne% #our1 ear !ontra!t LK The !ontra!t in!lu"e" pro)isions #or tuition assistan!e* insuran!e* pensions* an" other items* but the primar ob8e!ti)e o# unions is to: A$ Lo%er the %a'es o# nonunion members. B$ Raise the %a'es o# union members. C$ Raise the le)el o# output so members !an earn more. +$ All o# the abo)e. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: --;

<-. One World ,iew arti!le states KL unioni9ation rates ha)e been "e!linin' in the Unite" 6tates LK This tren" is the result o#: A$ A relati)e "e!line in manu#a!turin'. B$ A relati)e "e!line in ser)i!e in"ustries. C$ The 'ro%th o# lar'e #irms relati)e to small #irms. +$ All o# the abo)e.

,a'e .1

Chapter 16: Labor Unions

Ans%er: A T pe: Comple3 Un"erstan"in' ,a'e: -4.

<4. One World ,iew arti!le states KL unioni9ation rates ha)e been "e!linin' in the Unite" 6tates ...K This tren" is the result o#: A$ The relati)e "e!line in manu#a!turin'. B$ The in!rease" %orl"%i"e !ompetition. C$ The rapi" 'ro%th in hi'h1te!h ser)i!e in"ustries. +$ All o# the abo)e. Ans%er: + T pe: Comple3 Un"erstan"in' ,a'e: -4.

<5. An *n the +ews arti!le title" KA &in #or the Fra"uateAs$K "is!usses ho% 'ra"uate tea!hin' assistants !an no% unioni9e. Unioni9ation o#ten o!!urs %hen emplo ers: A$ Ha)e no mar(et po%er. B$ Ha)e monopson po%er. C$ ,a %a'es abo)e the mar(et %a'e rate. +$ O##er too man #rin'e bene#its to their emplo ees. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: -4-

<6. An *n the +ews arti!le states that K:n"i)i"ual pla ers %ere permitte" to ne'otiate %ith onl one team.K The reser)e !lause in pla er !ontra!ts 'a)e #ran!hise o%ners in the labor mar(et essentiall : A$ A bilateral monopol . B$ A monopol . C$ A monopson . +$ A !ompetiti)e mar(et. Ans%er: C T pe: Comple3 Un"erstan"in' ,a'e: -44

<7. An *n the +ews arti!le title" KCaterpillar )s. the UA&K "es!ribes !olle!ti)e bar'ainin' as: A$ The !ompetition bet%een labor unions #or %or(ers. B$ +ire!t ne'otiations bet%een emplo ers an" labor unions. C$ Fo)ernment inter)ention to en" a stri(e. +$ 0e'otiations bet%een %or(ers an" labor union or'ani9ers. Ans%er: B T pe: Comple3 Un"erstan"in' ,a'e: -47

THE LABOR MARKET

<;. The %illin'ness o# #irms to hire labor is represente" b the mar(et labor "eman" !ur)e.

Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: --5

<<. The mar(et labor suppl !ur)e is "o%n%ar" slopin'.

Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: --5

,a'e ..

Chapter 16: Labor Unions

? 1==. The e2uilibrium %a'e rate is the rate at %hi!h the 2uantit o# labor "eman"e" e2uals the 2uantit supplie". Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: --6

LABOR U0:O06

? 1=1. The primar ob8e!ti)e o# unions is to raise the %a'es o# union members. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: --7

? 1=.. Unli(e most monopolies* unions "o not attempt to use their mar(et po%er to raise the e2uilibrium %a'e abo)e its !ompetiti)e le)el. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: --7

? 1=-. A !ra#t union is a labor or'ani9ation that represents people %ith a parti!ular s(ill. Ans%er: True T pe: +e#inition ,a'e: --7

THE ,OTE0T:AL U6E O? ,O&ER

? 1=4. :n a !ompetiti)e labor mar(et* emplo ers must "istin'uish the mar'inal %a'e #rom the mar(et %a'e. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: --;

? 1=5. The "istin!tion bet%een mar(et %a'e an" mar'inal %a'e must be ma"e be!ause o# the "o%n%ar" slope o# the labor "eman" !ur)e. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: --;

? 1=6. Monopolists in the labor mar(et e2uate the mar'inal %a'e %ith the mar'inal re)enue pro"u!t. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: --<

? 1=7. The interse!tion o# the mar'inal %a'e !ur)e %ith the labor suppl !ur)e i"enti#ies a "esire" le)el o# emplo ment #or a union. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: --<

,a'e .-

Chapter 16: Labor Unions

? 1=;. :n a monopol labor mar(et* the optimal union %a'e !an be rea" o## the mar'inal re)enue pro"u!t !ur)e. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: --<

,a'e .4

Chapter 16: Labor Unions

? 1=<. The mar'inal %a'e !ur)e lies belo% the labor "eman" !ur)e be!ause the mar'inal %a'e is less than the %a'e rate. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: --<

? 11=. Unions !annot e3ert mar(et po%er %ithout e3ertin' !ontrol o)er the mar(et suppl !ur)e #or labor. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -4=

? 111. Unions "o not nee" to !ontrol the labor suppl in or"er to ha)e mar(et po%er. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -4=

THE ECTE0T O? U0:O0 ,O&ER

? 11.. ?rom the 1<-=s until to"a * unions ha)e e3perien!e" parti!ularl #ast 'ro%th in the Unite" 6tates. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -41

? 11-. The unioni9e" per!enta'e o# the labor #or!e in the Unite" 6tates has been in!reasin' stea"il sin!e the 1<5=s. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -41

? 114. Both the unioni9ation an" !on!entration ratios are measures o# mar(et po%er. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -41

EM,LODER ,O&ER

? 115. A monopsonist must raise the %a'e rate i# it "esires to hire a""itional %or(ers. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -4-

? 116. A monopolisti! emplo er see(s to establish a %a'e rate that is lo%er than !ompetiti)e stan"ar"s. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -4-

? 117. The mar'inal #a!tor !ost #a!in' ea!h emplo er in a !ompetiti)e labor mar(et is 'reater than the mar(et %a'e rate.

,a'e .5

Chapter 16: Labor Unions

Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -44

? 11;. Monopsonists %ill set the %a'e e2ual to the mar'inal #a!tor !ost a#ter hirin' the number o# emplo ees that e2uates mar'inal #a!tor !ost %ith labor "eman". Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -45

? 11<. Monopsonists hire the amount o# labor that %ill e2uate the mar'inal #a!tor !ost %ith the "eri)e" "eman" !ur)e #or labor. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -45

COLLECT:/E BARFA:0:0F

? 1.=. The interse!tion o# the mar'inal pri!es or %a'e an" mar'inal #a!tor !ost "etermines the %a'e in bilateral monopol . Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -46

? 1.1. :n bilateral monopol * pri!e an" output are "etermine" b the interse!tion o# "eman" an" suppl !ur)es. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -46

? 1... The !olle!ti)e bar'ainin' pro!ess !an result in a %a'e belo% the suppl !ur)e o# labor. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -46

? 1.-. :# a union a!hie)es abo)e1e2uilibrium %a'es #or its membership* the %a'es o# nonunion %or(ers %ill 'enerall su##er. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -47

THE :M,ACT O? U0:O06

? 1.4. Unions are more !ommon in in"ustries that ha)e al%a s been more !apital intensi)e. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -4;

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Chapter 16: Labor Unions

? 1.5. E##e!ti)e labor unions ha)e an impa!t on pri!es o# 'oo"s their %or(ers pro"u!e. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -4<

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Chapter 16: Labor Unions

? 1.6. &or( rules that are "esi'ne" to prote!t 8obs an" ma3imi9e emplo ment at an le)el o# output are thou'ht to lo%er %or(er pro"u!ti)it . Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -5=

THE ECO0OMD TOMORRO&

? 1.7. :n!rease" 'lobal !ompetition is one reason %h unioni9ation has be!ome more popular. Ans%er: ?alse T pe: Basi! Un"erstan"in' ,a'e: -5=

? 1.;. The relati)e "e!line in manu#a!turin' in the Unite" 6tates has !ontribute" to the "e!line in unioni9ation. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -5=

? 1.<. :n or"er to in!rease their po%er* unions ha)e been mer'in' a!ross !ra#t an" in"ustr lines. Ans%er: True T pe: Basi! Un"erstan"in' ,a'e: -5=

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Chapter 16: Labor Unions

Ans ers to Table

Table 16.1 Ans er Wage rate (dollars per hour) @.6 .. 1; 14 1= Labor demanded (workers) = . 4 6 ; Total labor cost-hourly (dollars per hour) = 44 7. ;4 ;= Marginal wage (dollars per worker) 1111 44 .; 1. 14

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