Question 1

From 1950 to 2008, union membership has declined from more than 30 percent of the workforce to approximately 12 percent. Over this period, the share of national income going to labor
A) declined substantially.
B) increased substantially.
C) remained approximately the same.
D) initially increased but has fallen recently.

Accepted Answer

The passage states that the share of national income going to labor has remained approximately the same over the period from 1950 to 2008.

Question 2

What common goals, if any, do labor and management share?

Accepted Answer

The answer of What common goals, if any, do labor...

Question 3

Data on the relationship between the percentage of the workforce unionized and the share of national income allocated to labor suggest that unionization has
A) greatly altered the labor-capital distribution of national income.
B) increased the share of national income allocated to labor.
C) had a positive effect on the wages of nonunion workers.
D) had no significant impact on the share of income going to labor.

Accepted Answer

The answer of Data on the relationship between the percentage...

Question 4

Which of the following factors will reduce considerably the ability of a union to raise the wages of its workers?
A) an elastic demand for the goods produced by union labor
B) weak foreign competition for the product union labor helps to produce
C) high tariffs on goods produced by the union labor
D) favoritism in the allocation of government contracts to firms that employ union labor

Accepted Answer

If the demand for goods produced by union labor is elastic, this means that consumers are very sensitive to changes in price. As such, if the union raises wages (and therefore prices for goods produced), demand will decrease, leading to a reduction in sales and potentially layoffs. This reduces the union's bargaining power in negotiations for higher wages.

Question 5

Which of the following is most likely to be associated with a strong union?
A) The demand for the products produced by the unionized labor is highly elastic.
B) There are few good substitutes for the products produced by the unionized labor.
C) It is easy to substitute capital for the labor of the union members.
D) Union labor composes a large proportion of the total cost of the product that they help produce.

Accepted Answer

The answer of Which of the following is most likely...

Question 6

Since 1970, union membership, as a percent of the labor force,
A) has remained virtually unchanged.
B) has increased, as more government workers have decided to unionize.
C) has decreased.
D) has gone through wild swings both up and down.

Accepted Answer

Union membership as a percent of the labor force has decreased since 1970. This is due to a number of factors, including increased globalization, automation, and the decline of certain industries where union membership was traditionally strong.

Question 7

Union membership as a share of the work force is ____ in states with right-to-work laws. (Fill in the blank.)
A) above the national average.
B) below the national average.
C) greater than 50 percent.
D) close to 100 percent.

Accepted Answer

The correct answer is B as union membership as a share of the workforce is lower in states with right-to-work laws. Right-to-work laws allow workers to opt out of paying union dues, which can make it harder for unions to maintain membership and resources.

Question 8

Which of the following is most likely to occur if a union can transfer profits from a unionized employer to union workers?
A) The investment expenditures of the unionized employer will tend to fall.
B) Employment in the nonunion sector will tend to fall.
C) The costs of the unionized employer will tend to fall.
D) The output of the unionized employer will tend to increase.

Accepted Answer

If a union can transfer profits from a unionized employer to union workers, the investment expenditures of the unionized employer will tend to fall. This is because the union is taking profits away from the employer, which can cause them to have less money available for investment. This can also have a negative impact on the overall productivity and growth of the company.

Question 9

Which of the following statements is true for the U.S. economy?
A) Higher wages in the unionized sectors of the economy push up wages in the nonunion sectors as well.
B) Inflation tends to accelerate when the proportion of the labor force that is unionized increases.
C) Union workers currently receive wages that are 21 percent higher, on average, than similar nonunion workers.
D) When we compare similar union and nonunion workers, we find virtually no difference in the wages they receive.

Accepted Answer

Studies have consistently shown that union workers receive higher wages than nonunion workers. The exact wage difference varies by industry and occupation, but on average, union workers in the U.S. make 21 percent more than nonunion workers. Option A is false because higher wages in the unionized sectors do not necessarily translate into higher wages in nonunion sectors. Option B is also false because there is no clear causal relationship between unionization and inflation. Option D is false because there is a significant wage differential between union and nonunion workers.

Question 10

In which of the following occupations is union membership the highest?
A) sales
B) transportation
C) construction
D) government

Accepted Answer

Government occupations typically have the highest union membership due to the presence of large public sector unions.

Question 11

What is the primary source of higher real wages?
A) labor unions
B) the threat of a strike by a union
C) increases in productivity
D) increases in the supply of money

Accepted Answer

Increases in productivity lead to an increase in output per worker, which in turn leads to an increase in real wages (the purchasing power of wages). This is because a more productive worker can produce more goods or services in the same amount of time, which allows for higher wages to be paid without driving up prices. Labor unions and strikes may have some ability to negotiate higher wages, but their power is limited and may sometimes lead to unemployment if employers are unable to pay the wages demanded. Increases in the supply of money may lead to inflation, which can temporarily increase nominal wages but ultimately erodes the purchasing power of those wages.

Question 12

The experience of the Teamsters in the late 1970s and early 1980s suggests that
A) there are few restraints on the ability of a strong union to increase the wages of its members.
B) product market competition with goods made from (or services provided by) nonunion labor significantly limits the ability of a union to get increased wages for its members.
C) higher wages tend to stimulate aggregate demand, which makes it easier for a union to gain still higher wages.
D) wages are established by the relative skill of union and management negotiators, independent of market conditions.

Accepted Answer

The experience of the Teamsters in the late 1970s and early 1980s suggests that product market competition with goods made from (or services provided by) nonunion labor significantly limits the ability of a union to get increased wages for its members. The Teamsters faced competition from nonunion trucking companies, which put pressure on the union to moderate its wage demands. As a result, the Teamsters had to focus on other issues, such as job security and improved working conditions, rather than wage increases.

Question 13

By raising their wages, unions typically
A) increase total productivity, which must rise proportionally with the wage rate.
B) encourage employers to find substitutes for union labor.
C) raise the wages of nonunion workers as well.
D) lower the prices consumers pay for the products produced by union firms.

Accepted Answer

By raising wages, unions can make union labor more expensive, prompting employers to seek cheaper alternatives or substitutes for union labor to maintain cost efficiency.

Question 14

A union representing a group of workers will tend to be stronger when
A) there are no good substitutes for the labor services of the unionized workers.
B) the domestic producers of the good produced by the unionized workers face intense competition from foreign suppliers of the good.
C) the cost of employing the unionized workers is a large part of the total cost of the product that they produce.
D) the demand for the good produced by the unionized workers is highly elastic.

Accepted Answer

When there are no good substitutes for the labor services of the unionized workers, the bargaining power of the union increases. This is because employers have no other options but to agree to the demands of the unionized workers, otherwise they will be left without workers.

Question 15

A former union employee states: "We were on strike for two years. I know the eventual wage increase we received will never make up for the wages I lost, but I think the strike was worth it. We forced the company to give in to our demands." Evaluate these comments.

Accepted Answer

The answer of A former union employee states: "We were...

Question 16

The percent of workers belonging to a union in the United States
A) has been continuously declining since the 1950s.
B) has been continuously increasing since the 1950s.
C) has remained fairly constant since the 1950s.
D) rose sharply from 1950 to 1970 but has declined since.

Accepted Answer

Union membership in the United States has been on a general decline since the 1950s due to various factors such as changes in the economy, labor laws, and the nature of work.

Question 17

In 2008, approximately what percent of the nonagricultural workforce belonged to a union?
A) 2 percent
B) 12 percent
C) 35 percent
D) 98 percent

Accepted Answer

According to the Bureau of Labor Statistics, in 2008, approximately 12 percent of the nonagricultural workforce in the United States belonged to a union.

Question 18

Which of the following will tend to lower the ability of a union to increase the wages of its members?
A) strong competition from nonunion labor
B) threat of a strike
C) increased demand for union labor
D) all of the above

Accepted Answer

Strong competition from nonunion labor can drive down wages and bargaining power of the union, making it harder for them to negotiate higher wages for their members. The threat of a strike (choice B) can actually increase the union's bargaining power by putting pressure on the employer, and increased demand for union labor (choice C) can also increase their bargaining power. Therefore, only choice A is correct in this scenario.

Question 19

What characteristics of both the product market and the labor market enhance the likelihood that a union will be effective?

Accepted Answer

The answer of What characteristics of both the product market...

Question 20

Measured as a share of the labor force, union membership was at its highest level in the United States during the
A) 1930s
B) 1950s
C) 1970s
D) 1990s

Accepted Answer

Union membership reached its peak in the US during the 1950s, with around 35% of the labor force being unionized. This was a result of the strong post-World War II economy and favorable government policies towards unions.

Quiz 16: Applying the Basics: Special Topics in Economics

From 1950 to 2008, union membership has declined from more than 30 percent of the workforce to approximately 12 percent. Over this period, the share of national income going to labor

What common goals, if any, do labor and management share?

Data on the relationship between the percentage of the workforce unionized and the share of national income allocated to labor suggest that unionization has

Which of the following factors will reduce considerably the ability of a union to raise the wages of its workers?

Which of the following is most likely to be associated with a strong union?

Since 1970, union membership, as a percent of the labor force,

Union membership as a share of the work force is ____ in states with right-to-work laws. (Fill in the blank.)

Which of the following is most likely to occur if a union can transfer profits from a unionized employer to union workers?

Which of the following statements is true for the U.S. economy?

In which of the following occupations is union membership the highest?

What is the primary source of higher real wages?

The experience of the Teamsters in the late 1970s and early 1980s suggests that

By raising their wages, unions typically

A union representing a group of workers will tend to be stronger when

A former union employee states: "We were on strike for two years. I know the eventual wage increase we received will never make up for the wages I lost, but I think the strike was worth it. We forced the company to give in to our demands." Evaluate these comments.

The percent of workers belonging to a union in the United States

In 2008, approximately what percent of the nonagricultural workforce belonged to a union?

Which of the following will tend to lower the ability of a union to increase the wages of its members?

What characteristics of both the product market and the labor market enhance the likelihood that a union will be effective?

Measured as a share of the labor force, union membership was at its highest level in the United States during the