Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Commissions or royalties may be an inexpensive way of reducing shirking on a job when the costs of monitoring work performance are high.

Accepted Answer

A) True 
 B)False

Question 3

The rate of unionization is substantially higher for protective service workers than for sales workers.

Accepted Answer

A) True 
 B)False

Question 4

State right-to-work laws

Accepted Answer

A)   permit employers to hire nonunion workers only if union labor is unavailable.
B)   prohibit employers from discriminating against minority groups in hiring workers.
C)   prohibit unions from discriminating against minority groups in recruiting members.
D)   make compulsory union membership (for example, a union shop)  illegal.

Question 5

Independent unions

Accepted Answer

A)   have greater combined membership than the AFL-CIO.
B)   are not affiliated with the AFL-CIO or Change to Win.
C)   include the United Autoworkers and United Steelworkers.
D)   have about the same combined membership as the AFL-CIO.

Question 6

Unnecessary occupational licensing requirements in an industry tend to

Accepted Answer

A)   increase the supply of the product.
B)   raise the price of the product.
C)   reduce the income of the suppliers.
D)   increase the demand for the product.

Question 7

Those who feel that unions positively affect productivity and efficiency argue that unions are

Accepted Answer

A)   "voice mechanisms" that reduce labor turnover.
B)   "exit mechanisms" that reduce labor turnover.
C)   "voice mechanisms" that accelerate labor turnover.
D)   "exit mechanisms" that accelerate labor turnover.

Question 8

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.

Question 9

In 2015, there were about million union members in the United States.

Accepted Answer

A)   8.4
B)   11.6
C)   16.4
D)   22.0

Question 10

Critics contend that imposing a minimum wage higher than the equilibrium wage in a competitive industry would

Accepted Answer

A)   decrease the number of workers employed in that industry.
B)   decrease the quantity of labor supplied to that industry.
C)   increase the demand for labor in the industry.
D)   increase employment in that industry.

Question 11

(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 12

Assume that your nominal wage was fixed at $15 an hour, and the price index rose from 100 to 105. In this case, your real wage has

Accepted Answer

A)   decreased to $10.
B)   increased to $15.75.
C)   decreased to $14.29.
D)   increased to $20.

Question 13

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.

Question 14

If you received a 4 percent increase in your nominal wage and the price level increased by 6 percent, then your real wage has increased by 2 percent.

Accepted Answer

A) True 
 B)False

Question 15

Unions may increase productivity by

Accepted Answer

A)   providing an exit mechanism for workers.
B)   increasing worker turnover so that younger workers are more likely to be employed.
C)   reducing the amount of capital used per worker.
D)   providing a voice mechanism for workers.

Question 16

The labor market for teachers in a small, isolated community that has one school district would be best described as a(n)

Accepted Answer

A)   natural monopoly.
B)   bilateral monopoly.
C)   monopsony.
D)   oligopsony.

Question 17

The economic term for a firm that is the sole buyer in a market is

Accepted Answer

A)   monopsonist.
B)   monopolist.
C)   bilateral competitor.
D)   bilateral monopolist.

Question 18

In the United States, the rate of unionization is

Accepted Answer

A)   higher for sales workers than for transportation workers.
B)   lower for managers than for teachers.
C)   lower for production workers than for sales workers.
D)   higher for social workers than for protective service workers.

Question 19

Which of the following is characteristic of a labor market that is a monopsony?

Accepted Answer

A)   The type of labor available is relatively mobile from one industry to another.
B)   The supply curve for labor lies above the marginal resource cost curve of the firm.
C)   The wage rate the firm must pay varies directly with the number of workers it employs.
D)   The firm's employment is a small portion of the total employment of that type of labor.

Question 20

The lack of job information for workers would be an example of which explanation for wage differentials among workers?

Accepted Answer

A)   noncompeting groups
B)   compensating differences
C)   market imperfections
D)   principal-agent problems

Exam 17: Wage Determination

If you received a 4 percent increase in your nominal wage and the price level increased by 6 percent, then your real wage has increased by 2 percent.

Correct AnswerverifiedShow Answer

In the United States, the rate of unionization is

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The lack of job information for workers would be an example of which explanation for wage differentials among workers?

Correct AnswerverifiedShow Answer

Independent unions

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In 2015, there were about million union members in the United States.

Correct AnswerverifiedShow Answer

The economic term for a firm that is the sole buyer in a market is

Correct AnswerverifiedShow Answer

Commissions or royalties may be an inexpensive way of reducing shirking on a job when the costs of monitoring work performance are high.

Correct AnswerverifiedShow Answer

Which of the following is characteristic of a labor market that is a monopsony?

Correct AnswerverifiedShow Answer

Assume that your nominal wage was fixed at $15 an hour, and the price index rose from 100 to 105. In this case, your real wage has

Correct AnswerverifiedShow Answer

Unions may increase productivity by

Correct AnswerverifiedShow Answer

State right-to-work laws

Correct AnswerverifiedShow Answer

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

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

The rate of unionization is substantially higher for protective service workers than for sales workers.

Correct AnswerverifiedShow Answer

Unnecessary occupational licensing requirements in an industry tend to

Correct AnswerverifiedShow Answer

Those who feel that unions positively affect productivity and efficiency argue that unions are

Correct AnswerverifiedShow Answer

The labor market for teachers in a small, isolated community that has one school district would be best described as a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Critics contend that imposing a minimum wage higher than the equilibrium wage in a competitive industry would

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

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