Question 1

The wages of plumbers are likely to increase when

Accepted Answer

A)  licensing standards for the occupation are increased.
B)  there is an increase in the cost of plumbing supplies.
C)  the length of the training period for plumbers is decreased.
D)  more do-it-yourself home improvement centers open across the nation.E) A) and D)
F) All of the above

Question 2

Which union status allows the firm to hire nonunion workers, provided that these workers would join the union within a specified period or lose their jobs?

Accepted Answer

A)  open shop
B)  agency shop
C)  union shop
D)  closed shopE) B) and C)
F) A) and D)

Question 3

The reason that unskilled construction workers typically receive higher wages than retail sales clerks is best explained by

Accepted Answer

A)  discrimination.
B)  geographic immobility.
C)  compensating differences.
D)  noncompeting labor groups.E) All of the above
F) B) and D)

Question 4

The XYZ Corporation's collective bargaining agreement indicates that it may hire either union or nonunion workers and that the latter are under no obligation to join the union.This agreement embodies

Accepted Answer

A)  an open shop.
B)  a closed shop.
C)  a union shop.
D)  an agency shop.E) All of the above
F) A) and B)

Question 5

Taking unauthorized work breaks would be an example of

Accepted Answer

A)  compensating differences.
B)  noncompeting groups.
C)  piece-rate incentives.
D)  shirking.E) All of the above
F) B) and C)

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.E) B) and D)
F) B) and C)

Question 7

Suppose in some economy there are 100 million workers; 8 million of those workers work in retail trade, and 2 million of the retail workers belong to unions.Total union membership in this economy is 30 million.The rate of unionization in the economy is

Accepted Answer

A)  30 percent, and the rate of unionization in retail trade in 20 percent.
B)  8 percent, and the rate of unionization in retail trade is 2 percent.
C)  30 percent, and the rate of unionization in retail trade is 25 percent.
D)  20 percent, and the rate of unionization in retail trade is 25 percent.E) A) and B)
F) B) and D)

Question 8

Wage differentials are fully explained by differences in productivity and human capital among various workers.

Accepted Answer

A) True 
 B)False

Question 9

Who is the most likely to be a union member in the United States?

Accepted Answer

A)  a female retail trade worker
B)  a male transportation worker
C)  an African American manager
D)  a white agricultural workerE) B) and D)
F) A) and D)

Question 10

The Overnight Construction Company has just signed a collective bargaining contract in which it agrees that all workers it hires must be union members in good standing at the time they are hired.This provision reflects

Accepted Answer

A)  preferential hiring.
B)  a maintenance-of-membership shop.
C)  a union shop.
D)  a closed shop.E) B) and D)
F) All of the above

Question 11

A firm that is hiring labor in a purely competitive labor market and selling its product in a purely competitive product market will maximize its profit by hiring labor until

Accepted Answer

A)  marginal revenue product is zero.
B)  marginal revenue product exceeds marginal resource (labor)  cost by the greatest amount.
C)  marginal resource cost is zero.
D)  marginal revenue product equals marginal resource (labor)  cost.E) None of the above
F) B) and D)

Question 12

Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings.One reason for this is to

Accepted Answer

A)  restrict the supply of construction workers.
B)  increase the elasticity of demand for construction workers.
C)  increase the demand for construction workers.
D)  increase the price of substitute inputs.E) A) and B)
F) None of the above

Question 13

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 14

The market supply curve for labor is upsloping because

Accepted Answer

A)  of diminishing returns.
B)  employers as a group must pay higher wage rates to obtain more workers.
C)  of declining MRC.
D)  each employer is a "wage taker."E) A) and D)
F) A) and C)

Question 15

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 16

Suppose Steve Stone takes a job with Zemo Manufacturing, whose labor contract with its unions has an agency shop clause (30 days) .Steve

Accepted Answer

A)  must join the union within 30 days.
B)  can decide against joining the union and place the union dues in a retirement account.
C)  can decide against joining the union but then will not receive any union-negotiated wage increases.
D)  can decide against joining the union but nevertheless will have to pay union dues or donate an equivalent amount to an approved charity.E) A) and B)
F) A) and C)

Question 17

Which of the following has not been a major factor contributing to the high productivity of labor in the United States?

Accepted Answer

A)  high wage rates
B)  technological advancement
C)  education and training of workers
D)  high levels of capital investmentE) All of the above
F) B) and D)

Question 18

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.E) All of the above
F) None of the above

Question 19

In which of the following U.S.industries is the rate of unionization the highest?

Accepted Answer

A)  construction
B)  government
C)  transportation
D)  agricultureE) C) and D)
F) A) and B)

Question 20

Which would be an example of a negative side effect of pay-for-performance plans?

Accepted Answer

A)  Profit sharing plans will tend to decrease the "free-ride" that some workers get by being part of a team.
B)  Employers get greater effort from workers by paying them a relatively high, above-equilibrium wage.
C)  Workers have to take additional schooling to learn skills that will enable them to keep their jobs.
D)  An increase in production from piece work can result in a decline in product quality.E) A) and C)
F) None of the above

Exam 17: Wage Determination

The market supply curve for labor is upsloping because

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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.

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

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The reason that unskilled construction workers typically receive higher wages than retail sales clerks is best explained by

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Which of the following has not been a major factor contributing to the high productivity of labor in the United States?

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Who is the most likely to be a union member in the United States?

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Suppose in some economy there are 100 million workers; 8 million of those workers work in retail trade, and 2 million of the retail workers belong to unions.Total union membership in this economy is 30 million.The rate of unionization in the economy 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

The Overnight Construction Company has just signed a collective bargaining contract in which it agrees that all workers it hires must be union members in good standing at the time they are hired.This provision reflects

Correct AnswerverifiedShow Answer

Wage differentials are fully explained by differences in productivity and human capital among various workers.

Correct AnswerverifiedShow Answer

In which of the following U.S.industries is the rate of unionization the highest?

Correct AnswerverifiedShow Answer

Suppose Steve Stone takes a job with Zemo Manufacturing, whose labor contract with its unions has an agency shop clause (30 days) .Steve

Correct AnswerverifiedShow Answer

The XYZ Corporation's collective bargaining agreement indicates that it may hire either union or nonunion workers and that the latter are under no obligation to join the union.This agreement embodies

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Which would be an example of a negative side effect of pay-for-performance plans?

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Which union status allows the firm to hire nonunion workers, provided that these workers would join the union within a specified period or lose their jobs?

Correct AnswerverifiedShow Answer

Taking unauthorized work breaks would be an example of

Correct AnswerverifiedShow Answer

Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings.One reason for this is to

Correct AnswerverifiedShow Answer

Unnecessary occupational licensing requirements in an industry tend to

Correct AnswerverifiedShow Answer

A firm that is hiring labor in a purely competitive labor market and selling its product in a purely competitive product market will maximize its profit by hiring labor until

Correct AnswerverifiedShow Answer

The wages of plumbers are likely to increase when

Correct AnswerverifiedShow Answer

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