Deck 17: Labor Unions

Question 1

Labor supply can be defined as the

A) Total number of people who are employable.
B) Total number of people in paid employment.
C) Willingness and ability of people to work at alternative wage rates in a given period of time, ceteris paribus.
D) Total number of individuals who are either employed or actively seeking employment.

Answer 1

Willingness and ability of people to work at alternative wage rates in a given period of time, ceteris paribus.

Question 2

The quantities of labor employers are willing and able to hire at alternative wages in a given time period, ceteris paribus, is the definition of labor

A) Supply.
B) Market equilibrium.
C) Market power.
D) Demand.

Answer 2

Demand.

Question 3

As long as additional workers are attracted into the labor force by higher wages, the market labor supply curve is

A) Horizontal.
B) Perfectly inelastic.
C) Downward-sloping.
D) Upward-sloping.

Answer 3

Upward-sloping.

Question 4

Workers with a particular skill are represented by

A) Craft unions.
B) Skill unions.
C) Market unions.
D) Industrial unions.

Question 5

Walmart, the largest employer in the United States, employs

A) Approximately 2 percent of the labor force.
B) Less than 1 percent of the labor force.
C) More than 15 percent of the labor force.
D) Approximately 10 percent of the labor force.

Question 6

Typical goals of a labor union in the United States include

A) Higher wages, better working conditions, and more job security.
B) Higher profit, lower output, and greater productivity.
C) Less work, more workers, and more overtime.
D) More vacation time, higher profit, and more flexible workplace rules.

Question 7

Because firms are willing to hire additional workers at lower wages, the market labor demand curve is

A) Vertical.
B) Perfectly elastic.
C) Downward-sloping.
D) Upward-sloping.

Question 8

Workers who organize themselves along industry lines are represented by

A) Skill unions.
B) Industrial unions.
C) Manufacturing unions.
D) Craft unions.

Question 9

Workers who demand a wage that is higher than the equilibrium wage

A) Will find it difficult to secure a job.
B) Will easily secure a job.
C) Must belong to a union in order to secure a job.
D) Will never benefit from joining a union.

Question 10

Which of the following is an example of an industrial union?

A) The International Brotherhood of Electrical Workers.
B) The Carpenters Union.
C) The United Auto Workers.
D) The AFL-CIO.

Question 11

The marginal wage is measured by

A) The percentage change in wages divided by the percentage change in the quantity of labor employed.
B) Total wages paid divided by the quantity of labor employed.
C) The change in total wages paid divided by the change in the quantity of labor employed.
D) The change in total wages paid divided by the change in the quantity of output produced.

Question 12

The largest employer in the United States is

A) The federal government.
B) General Motors.
C) Walmart.
D) Ford Motor Company.

Question 13

The largest labor union in the United States represents approximately

A) 10 percent of the labor force.
B) 5 percent of the labor force.
C) 15 percent of the labor force.
D) 1 percent of the labor force.

Question 14

The equilibrium wage rate is determined by

A) Individuals but not firms.
B) Market labor supply and market labor demand.
C) Labor unions.
D) Firms but not individuals.

Question 15

The largest labor unions in the United States are the

A) International Brotherhood of Teamsters (Teamsters).
B) International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW).
C) Service Employees International Union and the National Education Association (NEA).
D) Walmart employee union.

Question 16

Because a union is a form of monopoly, it must be concerned about the ________ slope of the demand curve for labor.

A) vertical
B) horizontal
C) downward
D) upward

Question 17

Typical goals of a labor union in the United States include

A) Higher profit, higher output, and greater productivity.
B) Higher wages, better working conditions, and more nonwage compensation.
C) More vacation time, higher profit, and more flexible workplace rules.
D) More benefits, higher pay, and less control over market labor supply.

Question 18

The demand for labor determines the

A) Total number of people who want to work.
B) Number of available jobs.
C) Willingness and ability of people to work at alternative wage rates.
D) Minimum wage rate.

Question 19

The difference between craft unions and industrial unions is that industrial unions usually

A) Are organized along democratic lines, while craft unions are undemocratic.
B) Include workers in an industry, while craft unions represent workers with a particular skill.
C) Include workers with a particular skill, while craft unions represent workers in an industry.
D) Flourish in industries, while craft unions dominate in smaller craft production.

Question 20

Public sector unions now

A) Represent a smaller percentage of workers than private sector unions.
B) Are growing at a smaller rate than private sector unions.
C) Represent over five times the percentage of workers in private sector unions.
D) Are illegal in the United States.

Question 21

A union evaluates job offers based on the

A) Individual interests of its members.
B) Collective interests of its members.
C) Location of the work, either in the private or public sector.
D) Impact on the wage rate for all union members.

Question 22

From a union's perspective, the optimal level of employment is determined by the intersection of the

A) Labor demand curve and the labor supply curve.
B) Marginal wage curve and the labor supply curve.
C) Labor demand curve and the marginal wage curve.
D) Labor demand curve and the marginal factor cost curve.

Question 23

If 10 workers will be hired by a firm at a wage rate of $15 per hour, but the 11^th worker will be hired only if the wage rate falls to $14 per hour, then the marginal wage of the 11^th worker is

A) $4 per hour.
B) $14 per hour.
C) $154 per hour.
D) -$1 per hour.

Question 24

To be successful in changing wage rates and employment conditions, labor unions need to have control over only

A) Their own members.
B) The labor supply decisions of individual workers.
C) The MRP of employers.
D) The production decision of employers.

Question 25

A workplace that requires workers to become union members within 30 days of being hired by a firm is

A) A craft union.
B) An industrial union.
C) A union shop.
D) The AFL-CIO.

Question 26

Unions must worry about the marginal wage because it indicates the

A) Wage at which demand and supply intersect.
B) Opportunity wage available to workers.
C) Effect on the total wage bill of hiring additional workers.
D) Effect on the total wage bill of hiring all workers.

Question 27

A union shop is an employment setting in which workers

A) Must belong to a specific union in order to be hired.
B) Must belong to a union in order to be hired although it doesn't matter which union they belong to.
C) May choose whether or not to join the union after they are hired.
D) Must join the union within 30 days after being hired.

Question 28

Union shops are subject to potential competition

A) Because some union shop workers refuse to join the union.
B) From replacement or substitute workers.
C) Since most union members do not take strikes seriously.
D) Since striking union members may be ordered back to work by the president.

Question 29

Suppose a union collects dues at 1 percent of the total wage bill.Maximum dues (and maximum total labor cost) would be achieved by hiring the amount of labor where

A) The supply curve intersects the marginal wage curve.
B) The marginal wage is zero.
C) The factor demand curve intersects the factor supply curve.
D) The marginal wage curve intersects the marginal factor cost curve.

Question 30

Total wages paid to labor are maximized when workers are hired up to the point where the

A) Marginal wage is equal to the market wage.
B) Demand for labor equals the marginal factor cost.
C) Market wage equals the marginal factor cost.
D) Marginal wage equals zero.

Question 31

The United Farm Workers have been unsuccessful for decades in their attempts to organize California's strawberry pickers because the workers

A) Know that replacement workers are readily available.
B) Don't care about earning higher wages.
C) Don't understand English.
D) Are members of a union shop.

Question 32

If a firm increases the number of workers from 32 to 33 and the total wages paid rise from $112,000 to $121,000, the marginal wage of the 33^rd worker is

A) $273.
B) $3,667.
C) $121,000.
D) $9,000.

Question 33

If a firm hires 12 workers at $9 per hour each and the 13^th worker will be hired only if the wage rate falls to $8 per hour, the marginal wage rate must be

A) -$8.
B) $8.
C) -$4.
D) $4.

Question 34

If the total wages paid change from $200,000 to $250,000 when the quantity of labor employed increases from five to seven workers, the marginal wage is

A) $35,714.
B) $25,000.
C) $250,000.
D) $50,000.

Question 35

Given that unions face a downward-sloping demand curve for labor, which of the following is not true concerning the optimal union wage rate at a given employment level?

A) It exceeds the competitive wage.
B) It is above the labor supply curve.
C) It is above the marginal wage.
D) It is above the labor demand curve.

Question 36

In determining how much labor union workers will offer, the union concerns itself mainly with the

A) Marginal revenue product curve.
B) Labor demand curve.
C) Market wage curve.
D) Marginal wage curve.

Question 37

With a union, the total number of workers hired is where

A) Employment is lower than at the competitive equilibrium.
B) The marginal wage is negative.
C) Employment and wages are both at the maximum possible levels.
D) Employment could not be increased by reducing the wage rate.

Question 38

The unionization ratio represents the

A) Percentage of the total labor force belonging to unions.
B) Market power of unions relative to the market power of nonunion labor.
C) Proportion of industries that are dominated by unions.
D) Annual percentage growth in the total number of unions.

Question 39

If the sellers of labor in a competitive market decided to unionize, ceteris paribus, then wages would

A) Rise and employment would fall.
B) Fall and employment would fall.
C) Rise and employment would rise.
D) Fall and employment would rise.

Question 40

If a firm hires 10 workers at $6 per hour each and the 11^th worker will be hired only if the wage rate falls to $5 per hour, the marginal wage rate must be

A) -$5.
B) $5.
C) -$5.50.
D) $5.50.

Question 41

The percentage of the labor force that belongs to a union is known as the

A) Union share ratio.
B) Unionization ratio.
C) Union participation ratio.
D) Unionized percentage ratio.

Question 42

The distinguishing characteristic of labor market monopsonies is the fact that

A) They can hire any number of workers they want without affecting the market wage.
B) Their hiring decisions directly affect the market wage rate.
C) They can pay any wage they want for the number of workers they need.
D) They must usually hire unionized workers.

Question 43

The old industrial unions are being supplanted by

A) Public service unions.
B) Craft unions.
C) Union shops.
D) Private sector unions.

Question 44

A monopsony

A) Is a market in which there is a single buyer.
B) Is a market in which there is a single seller.
C) Occurs when sellers have declining long-run average costs.
D) Occurs when buyers have declining long-run average costs.

Question 45

All of the following are true for a monopsonist except

A) The marginal factor cost for labor exceeds the wage rate.
B) The demand for labor is the same as the marginal revenue product of labor.
C) The derived demand for labor is downward-sloping.
D) The market demand for labor is upward-sloping.

Question 46

Which of the following labor markets is classified as a monopsony?

A) There are many employers, and each demands the same type of labor.
B) There are several employers, and each demands the same type of labor.
C) There are three employers, and each demands the same type of labor.
D) There is one employer for a specific type of labor.

Question 47

A monopsonist must pay a higher net wage rate to hire additional workers because as a single

A) Seller, it has market power.
B) Seller, it does not have to compete with other firms for customers.
C) Buyer in the market, it faces an upward-sloping supply curve for labor.
D) Buyer in the market, it faces a flat supply curve for labor.

Question 48

The current unionization rate for the U.S.labor force

A) Has been rising since the mid
B) Reflects the relative decline in U.S. manufacturing.
C) Is above 20 percent.
D) Has increased due to the growth of the service sector.

Question 49

Public sector unionization in the United States is currently closest to ________ percent.

A) 35
B) 23
C) 8.2
D) 2

Question 50

The current private sector unionization rate in the United States is closest to

A) 12.4 percent.
B) 19.3 percent.
C) 25.7 percent.
D) 6.7 percent.

Question 51

The unionization ratio grew most rapidly in the United States between

A) 1950 and 1953.
B) 1980 and 1988.
C) 1935 and 1945.
D) 1880 and 1901.

Question 52

Over the last 10 years in the United States, the private sector unionization rate has ______ and the public sector unionization rate has _______.

A) fallen; fallen
B) fallen; risen
C) risen; fallen
D) risen; risen

Question 53

In the last 10 years, private union membership has

A) Decreased, while public union membership has increased.
B) Increased along with public union membership.
C) Decreased along with public union membership.
D) Increased, while public union membership has decreased.

Question 54

The unionization rate in the United States has been

A) Increasing for the last 5 years.
B) Declining for approximately 30 years.
C) Declining for approximately 15 years.
D) Declining for over 40 years.

Question 55

Unionization rates have

A) Risen in the private sector but fallen in the public sector.
B) Fallen in both the private and public sectors.
C) Risen in the United States due to new favorable legislation.
D) Fallen in the private sector but risen in the public sector.

Question 56

Private sector unionization in the United States is currently closest to ________ percent.

A) 23.9
B) 17.6
C) 6.7
D) 1.4

Question 57

When only one buyer has access to a particular labor market,

A) A monopoly exists.
B) There is no seller concentration.
C) A monopsony exists.
D) There is no buyer concentration.

Question 58

Suppose a firm finds that it must raise wages for all of its workers every time it tries to expand its workforce.This means

A) It will produce more than it would in a competitive labor market.
B) The marginal factor cost curve is below the average cost of labor curve.
C) The firm has market power.
D) The labor market is perfectly competitive.

Question 59

An oligopsony exists if

A) Only a few firms produce most of the industry's output.
B) Only a few firms account for most of the industry's employment.
C) Only one firm accounts for most of the industry's employment.
D) There is no buyer concentration in the labor market.

Question 60

If there are many employers in a market and each has limited market power, the demand for labor is likely to be characterized as

A) Competitive.
B) Monopsonistic.
C) Oligopolistic.
D) Monopolistic.

Question 61

What percentage of the 20,000 collective bargaining agreements negotiated each year are concluded without recourse to a strike?

A) 50 percent.
B) 75 percent.
C) 85 percent.
D) 90 percent.

Question 62

When management shuts down a plant and does not allow workers to perform their jobs, there is a

A) Walkout.
B) Lockout.
C) Strike.
D) Strikebreaker.

Question 63

A profit-maximizing monopsonist will hire workers at the point where the marginal factor cost curve intersects the

A) Marginal wage curve.
B) Labor supply curve.
C) Equilibrium wage.
D) Marginal revenue product curve.

Question 64

The wage rate that a monopsonist would find most profitable is the wage

A) At the intersection of the marginal wage curve and the marginal cost curve.
B) On the labor supply curve corresponding to the level of employment at which the marginal factor cost curve (for labor) intersects the labor demand curve.
C) On the labor demand curve corresponding to the level of employment at which the marginal factor cost equals market supply.
D) On the labor demand curve at the wage where the marginal factor cost curve intersects the demand curve for labor.

Question 65

The profit-maximizing level of labor, in a union-dominated labor market, occurs where

A) Marginal wage = marginal factor cost.
B) Marginal wage = zero.
C) MRP = marginal wage.
D) MRP = marginal factor cost.

Question 66

Compared with a competitive market, a monopsonist will pay a ________ wage and hire ________ workers.

A) higher; fewer
B) higher; more
C) lower; fewer
D) lower; more

Question 67

Collective bargaining

A) Involves direct negotiations between labor unions and employers.
B) Takes place when unions compete to see who should represent workers in a given industry.
C) Occurs when employers determine which union should represent their workers.
D) Is the process by which unions decide which company should be the focus of wage negotiations. Collective bargaining is direct negotiations between employers and labor unions for the purpose of determining wages, employment, working conditions, and related issues.

Question 68

In a bilateral monopoly, wages and employment are determined by

A) Negotiation.
B) The intersection of market supply and demand.
C) The intersection of marginal cost and marginal revenue product.
D) The intersection of marginal wage and market demand.

Question 69

A market that experiences both strikes and lockouts at different times is most likely characterized by

A) Monopoly.
B) Monopsony.
C) Bilateral monopoly.
D) Monopolistic competition.

Question 70

The refusal to work by unionized labor is an example of

A) The right to work.
B) A lockout.
C) Collective bargaining.
D) A strike.

Question 71

When a strike or a lockout occurs,

A) Only labor suffers.
B) Both labor and management suffer.
C) Only management suffers.
D) Management suffers from a strike while labor suffers from a lockout.

Question 72

The marginal factor cost for a buyer with market power is

A) Above the marginal revenue product curve.
B) Above the wage rate paid by a monopsonist.
C) Below the labor supply curve.
D) Above the labor demand curve.

Question 73

From an economic perspective, the efforts of professional football, baseball, and basketball players in the United States to win the right to become free agents was really an effort to

A) Raise wages to the level of the players'MRP.
B) Raise wages to competitive levels.
C) Reduce the supply of professional players and thus increase wages.
D) Raise wages above the level of the players'MRP.

Question 74

The marginal factor cost for labor is

A) The net cost to a monopsonist of hiring an additional unit of labor.
B) The net gain to a monopolist seller of labor if an additional unit of labor is hired.
C) The demand for labor.
D) The supply of labor.

Question 75

A market with one buyer and one seller is a

A) Bilateral monopsony.
B) Multiopoly.
C) Bilateral monopoly.
D) Multilayer monopoly.

Question 76

If the marginal factor cost is less than labor demand, a monopsonist should

A) Reduce the wage rate.
B) Hire additional workers.
C) Increase the wage rate.
D) Hire fewer workers.

Question 77

In equilibrium, the monopsonist's labor demand will

A) Exceed labor supply.
B) Be greater than the marginal factor cost.
C) Equal labor supply.
D) Be less than the marginal factor cost.

Question 78

Which of the following is not true about the wage level in a bilateral monopoly?

A) It is determined by negotiation.
B) It is below the wage where the marginal factor cost curve intersects the labor demand curve.
C) It is above the wage level where the marginal wage intersects the labor supply curve.
D) It is determined simply by supply and demand.

Question 79

A profit-maximizing monopsonist will hire the quantity of labor where

A) MRP equals the wage rate.
B) MRP equals zero.
C) MRP equals MFC.
D) Labor supply equals labor demand.

Question 80

Suppose a monopsonist must pay $10 per hour to attract 10 workers.If the same monopsonist must raise its wage to $11 per hour to attract the 11^th worker, what is its marginal factor cost for labor?

A) $121 per hour.
B) $21 per hour.
C) $11 per hour.
D) $10 per hour.