Question 1

Which action taken by a worker would not be an investment in human capital?

Accepted Answer

A)  enrolling in college
B)  enrolling in trade school
C)  purchasing exercise equipment
D)  purchasing stock in a pharmaceutical company

Question 2

Seven of the 50 states account for approximately half of all union members in the United States.

Accepted Answer

A) True 
 B)False

Question 3

If a firm must pay a daily wage of $35 to hire 11 workers and a daily wage of $40 to hire 12 workers, its marginal resource cost of hiring the 12th worker is $40.

Accepted Answer

A) True 
 B)False

Question 4

Professions that require their practitioners to pass a licensure exam, like accountants and doctors, exemplify the exclusive union model of how a labor union raises wage rates.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Incentive pay plans that seek to tie worker compensation more closely to worker performance include the following, except

Accepted Answer

A)  commissions or royalties.
B)  a seniority-based pay scale.
C)  stock options and profit-sharing.
D)  efficiency wages.

Question 7

Pay-for-performance systems seek to deal with the

Accepted Answer

A)  unemployment problem.
B)  monitoring problem.
C)  discouraged worker problem.
D)  principal-agent problem.

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

Question 9

In a certain labor market, workers are required to have a certain skill-set.There are many workers who have the skill-set, but they can only find employment in one company.That one company is called a

Accepted Answer

A)  pure monopoly.
B)  monopolistic competitor.
C)  monopsony.
D)  natural monopoly.

Question 10

Marginal resource cost refers to the

Accepted Answer

A)  increase in total revenue resulting from the sale of the extra output of one more worker.
B)  price at which additional units of a resource can be hired in an imperfectly competitive resource market.
C)  increase in total cost resulting from producing one more unit of output.
D)  amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource.

Question 11

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.

Question 12

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.

Question 13

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.

Question 14

(Consider This)  Which of the following best explains why total compensation for U.S.workers has increased significantly over the past several decades, but take-home pay by U.S.workers has increased by much less?

Accepted Answer

A)  An increased share of total compensation has gone to provide health insurance to workers.
B)  The share of total compensation going to retirement accounts has increased relative to all other components of compensation.
C)  Total compensation is measured in current dollar terms; take-home pay is measured in inflation-adjusted dollars.
D)  Workers are receiving a much larger share of total compensation in the form of goods and services produced by the firms that employ them.

Question 15

In the United States, the rate of unionization is

Accepted Answer

A)  higher in mining than in government.
B)  lower in transportation than in agriculture.
C)  higher in transportation than in retail trade.
D)  lower in government than in finance, insurance, and real estate.

Question 16

Compensating differences in wages pay workers for

Accepted Answer

A)  differences in worker training and skills.
B)  differences in the nonmonetary characteristics of jobs.
C)  geographic immobility.
D)  discrimination in hiring and firing.

Question 17

Nominal wage measures the purchasing power of a given amount of real wage.

Accepted Answer

A) True 
 B)False

Question 18

Over the long run, real earnings per worker can increase only at about the same rate as the economy's rate of growth of

Accepted Answer

A)  total output.
B)  stock of capital.
C)  output per worker.
D)  international trade.

Question 19

Empirical studies suggest that, other things equal, the smaller the number of hospitals in a city, the lower are nurses' wages.This is evidence that

Accepted Answer

A)  the labor markets of nurses are purely competitive.
B)  hospitals may possess some degree of monopsony power.
C)  the minimum wage does not apply to nurses.
D)  labor unions have been ineffective in increasing the wages of nurses.

Question 20

Which of the following is not a major common topic of collective bargaining?

Accepted Answer

A)  union status
B)  product marketing
C)  grievance procedures
D)  seniority and job security

Exam 17: Wage Determination

Marginal resource cost refers to the

Correct AnswerverifiedShow Answer

Which of the following is not a major common topic of collective bargaining?

Correct AnswerverifiedShow Answer

(Consider This) Which of the following best explains why total compensation for U.S.workers has increased significantly over the past several decades, but take-home pay by U.S.workers has increased by much less?

Correct AnswerverifiedShow Answer

Seven of the 50 states account for approximately half of all union members in the United States.

Correct AnswerverifiedShow Answer

Professions that require their practitioners to pass a licensure exam, like accountants and doctors, exemplify the exclusive union model of how a labor union raises wage rates.

Correct AnswerverifiedShow Answer

Exclusive unionism has the economic effect of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Pay-for-performance systems seek to deal with the

Correct AnswerverifiedShow Answer

Which of the following is illegal under federal labor law?

Correct AnswerverifiedShow Answer

In a certain labor market, workers are required to have a certain skill-set.There are many workers who have the skill-set, but they can only find employment in one company.That one company is called a

Correct AnswerverifiedShow Answer

In the United States, the rate of unionization is

Correct AnswerverifiedShow Answer

Empirical studies suggest that, other things equal, the smaller the number of hospitals in a city, the lower are nurses' wages.This is evidence that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Nominal wage measures the purchasing power of a given amount of real wage.

Correct AnswerverifiedShow Answer

Which action taken by a worker would not be an investment in human capital?

Correct AnswerverifiedShow Answer

Over the long run, real earnings per worker can increase only at about the same rate as the economy's rate of growth of

Correct AnswerverifiedShow Answer

Compensating differences in wages pay workers for

Correct AnswerverifiedShow Answer

If a firm must pay a daily wage of $35 to hire 11 workers and a daily wage of $40 to hire 12 workers, its marginal resource cost of hiring the 12th worker is $40.

Correct AnswerverifiedShow Answer

Incentive pay plans that seek to tie worker compensation more closely to worker performance include the following, except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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