Question 1

Wage differentials occur for all the following reasons except:

Accepted Answer

A)   homogeneous workers.
B)   labor market imperfections.
C)   noncompeting groups of workers.
D)   compensating differences to offset nonmonetary differences in jobs.E) A) and D)
F) All of the above

Question 2

If there is a decrease in the demand for union electrical workers and at the same time there is a drastic cutback in the numbers of electricians trained by the union,then the:

Accepted Answer

A)   wages of electricians are likely to increase and the quantity employed will decrease.
B)   wages of electricians are likely to increase and the quantity employed will increase.
C)   quantity employed will increase,but the effect on wages is indeterminate.
D)   quantity employed will decrease,but the effect on wages is indeterminate.E) B) and D)
F) None of the above

Question 3

A firm in a purely competitive product market finds it must increase wages to attract extra workers.The firm will hire labor up to the point where the marginal:

Accepted Answer

A)   product of labor equals the wage rate.
B)   revenue product of labor equals the wage rate.
C)   revenue product of labor starts to decline.
D)   revenue product is less than the cost of hiring an extra worker.E) All of the above
F) A) and B)

Question 4

Refer to the above graph.The producer illustrated:

Accepted Answer

A)   is a monopsonist since MR = P for every unit sold.
B)   is a pure competitor in the output market since it must pay the market wage.
C)   is a monopsonist in its output market since it has control over the market wage rate.
D)   hires labor in a competitive market since it must pay each worker W*,the market wage rate.E) All of the above
F) A) and C)

Question 5

Exclusive unionism has the economic effect of:

Accepted Answer

A)   strengthening the bargaining position of an industrial union.
B)   weakening the bargaining position of a craft union.
C)   decreasing the supply of labor.
D)   increasing the demand for labor.E) B) and C)
F) All of the above

Question 6

Refer to the above graph,which shows the supply and demand for unionized manufacturing workers.The initial equilibrium point is point 1.The wages paid in comparable nonunion occupations increase significantly,while at the same time the price of manufactured goods increases.Which point would represent the new equilibrium?

Accepted Answer

A)   2
B)   3
C)   4
D)   5E) None of the above
F) A) and B)

Question 7

In a purely competitive market for economic resources,a firm's marginal revenue product for a factor could decrease as a result of a(n) :

Accepted Answer

A)   increase in the resource's marginal product.
B)   decrease in the demand for the firm's product.
C)   increase in the prices of all other resource inputs.
D)   decrease in the supply for the economic resource.E) A) and B)
F) B) and D)

Question 8

In which case below will the elasticity of demand for laborers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is:

Accepted Answer

A)   5,and labor's share of total costs is 20 percent.
B)   5,and labor's share of total costs is 75 percent.
C)   0.1,and labor's share of total costs is 20 percent.
D)   0.1,and labor's share of total costs is 75 percent.E) B) and C)
F) A) and D)

Question 9

Which is an example of a change in the price of another resource that decreases labor demand?

Accepted Answer

A)   A decline in the demand for computers in Europe reduces the demand for workers in the domestic computer industry.
B)   The rise of hair salons for both men and women reduces the demand for barbers.
C)   A decrease in the educational skills of manufacturing workers decreases the demand for such workers.
D)   An increase in the price of chemical equipment increases the cost of producing fertilizer,thus decreasing the demand for workers who make fertilizer.E) A) and C)
F) None of the above

Question 10

Other things being equal,a labor union will find it harder to get a wage increase for its members the:

Accepted Answer

A)   less elastic is the demand for the product labor produces.
B)   easier it is to substitute other resources for labor.
C)   greater the amount of unionization in the industry.
D)   less elastic is the demand for labor.E) None of the above
F) All of the above

Question 11

0 - W1. B)  W1 - W2. C)  W2 - W3. D)  W1 - W3." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph.Comparing monopsony with pure competition in the sale of output and hiring of labor services,the difference in the wage rate will be:

Accepted Answer

A)   W0 - W1.
B)   W1 - W2.
C)   W2 - W3.
D)   W1 - W3.E) A) and B)
F) All of the above

Question 12

Marginal revenue product is the increase in:

Accepted Answer

A)   total revenue from a decrease in the price of the product.
B)   marginal revenue from a decrease in the price of the product.
C)   marginal revenue from the use of an additional unit of a resource.
D)   total revenue from the use of an additional unit of a resource.E) A) and D)
F) B) and C)

Question 13

If a factor of production has many close substitutes,we would expect that its price elasticity of demand would be:

Accepted Answer

A)   unity.
B)   zero.
C)   greater than one.
D)   less than one but greater than zero.E) A) and B)
F) A) and C)

Question 14

The demand for labor will most likely increase when the price of a:

Accepted Answer

A)   complementary input increases,provided the substitution effect is greater than the output effect.
B)   substitute input decreases,provided the output effect is greater than the substitution effect.
C)   substitute input increases,provided the output effect is greater than the substitution effect.
D)   substitute input decreases,provided the substitution effect is greater than the output effect.E) All of the above
F) A) and C)

Question 15

The demand for labor would most likely become more elastic as a result of:

Accepted Answer

A)   a decrease in the elasticity of the demand for the product that the labor produces.
B)   a decrease in the time for employers to make technological changes or purchase new equipment.
C)   a decrease in the proportion of labor costs to total costs.
D)   an increase in the proportion of labor costs to total costs.E) B) and D)
F) B) and C)

Question 16

Suppose capital is readily substitutable for labor and that the price of capital falls.We can conclude that the:

Accepted Answer

A)   substitution effect will tend to reduce the demand for labor.
B)   output effect will tend to reduce the demand for labor.
C)   demand for labor will necessarily decline.
D)   demand for labor will necessarily increase.E) A) and B)
F) B) and D)

Question 17

Suppose a powerful labor union negotiates a wage for its members above the equilibrium wage rate in a previously nonunionized market.A likely result of this is that:

Accepted Answer

A)   the union will have difficulty recruiting new members.
B)   union members will be able to work more overtime than before.
C)   this firm will make up for the higher wage rate by expanding output.
D)   not everyone who wants to work at the new wage will be able to find jobs.E) A) and B)
F) C) and D)

Question 18

If two jobs (X and Y) are similar,and there is an increase in the nonmonetary benefits of job X,with no change in the nonmonetary benefits of job Y,we would expect:

Accepted Answer

A)   differences in money wages between jobs X and Y.
B)   wages to be higher for job X than for job Y.
C)   workers to move to job X until money wages are the same for both jobs.
D)   workers to move to job Y until money wages are the same for both jobs.E) B) and D)
F) A) and D)

Question 19

Gambling increases in popularity,thus increasing the demand for card dealers at casinos.This would be caused by which change in a determinant of labor demand?

Accepted Answer

A)   An increase in labor productivity
B)   An increase in product demand
C)   A decrease in the price of another resource
D)   An increase in the price of another resourceE) A) and B)
F) A) and C)

Question 20

In the demand-enhancing union model,a union increases the wage rate by increasing labor demand through actions that increase product demand,raise labor productivity,or alter the prices of related inputs.

Accepted Answer

A) True 
 B)False

Exam 10: Wage Determination

If there is a decrease in the demand for union electrical workers and at the same time there is a drastic cutback in the numbers of electricians trained by the union,then the:

Correct Answer
verified

Other things being equal,a labor union will find it harder to get a wage increase for its members the:

Correct Answer
verified

In the demand-enhancing union model,a union increases the wage rate by increasing labor demand through actions that increase product demand,raise labor productivity,or alter the prices of related inputs.

Correct Answer
verified

If two jobs (X and Y) are similar,and there is an increase in the nonmonetary benefits of job X,with no change in the nonmonetary benefits of job Y,we would expect:

Correct Answer
verified

If a factor of production has many close substitutes,we would expect that its price elasticity of demand would be:

Correct Answer
verified

A firm in a purely competitive product market finds it must increase wages to attract extra workers.The firm will hire labor up to the point where the marginal:

Correct Answer
verified

The demand for labor would most likely become more elastic as a result of:

Correct Answer
verified

Which is an example of a change in the price of another resource that decreases labor demand?

Correct Answer
verified

Exclusive unionism has the economic effect of:

Correct Answer
verified

The demand for labor will most likely increase when the price of a:

Correct Answer
verified

Correct Answer
verified

Refer to the above graph.Comparing monopsony with pure competition in the sale of output and hiring of labor services,the difference in the wage rate will be:

Correct Answer
verified

Wage differentials occur for all the following reasons except:

Correct Answer
verified

In a purely competitive market for economic resources,a firm's marginal revenue product for a factor could decrease as a result of a(n) :

Correct Answer
verified

Refer to the above graph.The producer illustrated:

Correct Answer
verified

Suppose capital is readily substitutable for labor and that the price of capital falls.We can conclude that the:

Correct Answer
verified

Gambling increases in popularity,thus increasing the demand for card dealers at casinos.This would be caused by which change in a determinant of labor demand?

Correct Answer
verified

In which case below will the elasticity of demand for laborers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is:

Correct Answer
verified

Suppose a powerful labor union negotiates a wage for its members above the equilibrium wage rate in a previously nonunionized market.A likely result of this is that:

Correct Answer
verified

Marginal revenue product is the increase in:

Correct Answer
verified

Exam 10: Wage Determination

If there is a decrease in the demand for union electrical workers and at the same time there is a drastic cutback in the numbers of electricians trained by the union,then the:

Correct AnswerverifiedShow Answer

Other things being equal,a labor union will find it harder to get a wage increase for its members the:

Correct AnswerverifiedShow Answer

In the demand-enhancing union model,a union increases the wage rate by increasing labor demand through actions that increase product demand,raise labor productivity,or alter the prices of related inputs.

Correct AnswerverifiedShow Answer

If two jobs (X and Y) are similar,and there is an increase in the nonmonetary benefits of job X,with no change in the nonmonetary benefits of job Y,we would expect:

Correct AnswerverifiedShow Answer

If a factor of production has many close substitutes,we would expect that its price elasticity of demand would be:

Correct AnswerverifiedShow Answer

A firm in a purely competitive product market finds it must increase wages to attract extra workers.The firm will hire labor up to the point where the marginal:

Correct AnswerverifiedShow Answer

The demand for labor would most likely become more elastic as a result of:

Correct AnswerverifiedShow Answer

Which is an example of a change in the price of another resource that decreases labor demand?

Correct AnswerverifiedShow Answer

Exclusive unionism has the economic effect of:

Correct AnswerverifiedShow Answer

The demand for labor will most likely increase when the price of a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the above graph.Comparing monopsony with pure competition in the sale of output and hiring of labor services,the difference in the wage rate will be:

Correct AnswerverifiedShow Answer

Wage differentials occur for all the following reasons except:

Correct AnswerverifiedShow Answer

In a purely competitive market for economic resources,a firm's marginal revenue product for a factor could decrease as a result of a(n) :

Correct AnswerverifiedShow Answer

Refer to the above graph.The producer illustrated:

Correct AnswerverifiedShow Answer

Suppose capital is readily substitutable for labor and that the price of capital falls.We can conclude that the:

Correct AnswerverifiedShow Answer

Gambling increases in popularity,thus increasing the demand for card dealers at casinos.This would be caused by which change in a determinant of labor demand?

Correct AnswerverifiedShow Answer

In which case below will the elasticity of demand for laborers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is:

Correct AnswerverifiedShow Answer

Suppose a powerful labor union negotiates a wage for its members above the equilibrium wage rate in a previously nonunionized market.A likely result of this is that:

Correct AnswerverifiedShow Answer

Marginal revenue product is the increase in:

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