Question 1

Most economists agree that trade unions reduce the overall unemployment rate in the economy.

Accepted Answer

Most economists actually do not agree that trade unions reduce the overall unemployment rate in the economy. Some argue that unions can lead to higher wages and reduced competitiveness, which can actually increase unemployment in the long run. Others argue that unions may have some positive impact on wages and working conditions, but the overall effect on employment is unclear and may vary depending on the specific context.

Question 2

Why might firms pay wages that are above the 'equilibrium wage' in a market?

Accepted Answer

Firms may pay wages above the equilibrium wage in order to attract and retain high-quality, skilled workers who are more productive and can generate higher profits for the company. By offering higher wages, firms can compete with other employers for these desirable workers, which can lead to increased productivity and profits in the long run.

Question 3

Explain the changes that have occurred in the level of regulation in the Australian labour market over the past 100 years and discuss the arguments in favour of and against these changes.
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Accepted Answer

The answer of Explain the changes that have occurred in...

Question 4

Enterprise bargaining is the negotiation of wages and working conditions:

Accepted Answer

Enterprise bargaining occurs at the workplace level, where negotiations take place between employers and employees (usually represented by their union). It is not a negotiation between trade unions and the government nor between employers and the government. Additionally, it is not typically resolved through the compulsory arbitration system, although this may be used as a last resort if negotiations are unsuccessful.

Question 5

Who might be disadvantaged by deregulation of the labour market?
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Accepted Answer

The answer of Who might be disadvantaged by deregulation of...

Question 6

For most of the twentieth century, Australia had a system of wage determination know as:

Accepted Answer

Compulsory arbitration was the predominant system of wage determination in Australia for most of the twentieth century. Under this system, industrial disputes were referred to a government-appointed tribunal for resolution. The tribunal had the power to determine wages, working conditions, and disputes between workers and employers. This system was designed to promote industrial peace and prevent strikes and lockouts that could disrupt the economy.

Question 7

Unemployment benefits reduce the 'opportunity cost' of job search.

Accepted Answer

Unemployment benefits provide financial support to individuals who are currently unemployed and looking for work. By reducing the opportunity cost of job search (i.e. the cost of forgoing potential income from other activities in order to search for a job), unemployment benefits make it easier for individuals to dedicate their time and resources to finding new employment. This can help to reduce unemployment rates and support economic growth.

Question 8

What effect do unemployment benefits have on job search?
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Accepted Answer

The answer of What effect do unemployment benefits have on...

Question 9

Which of the following has a tendency to raise the unemployment rate?

Accepted Answer

All of these options can lead to higher unemployment rates. Implementing a minimum wage can lead to unemployment if the minimum wage is set above the equilibrium for low-skilled workers, as employers may hire fewer workers or automate. Firms paying efficiency wages (wages above the market rate to increase productivity) can also lead to unemployment, as the higher wages can reduce the number of employees a firm can afford to hire. The establishment of effective trade unions can push wages above the market equilibrium, potentially leading to higher unemployment as employers may reduce hiring or lay off workers to maintain profitability.

Question 10

'Efficiency wages' cause unemployment because firms pay wages that are:

Accepted Answer

Efficiency wages are wages that are higher than the market wage to motivate workers to work harder and be more productive. This can lead to a situation where labour demand is less than labour supply, as firms are not willing to hire as many workers at the higher wage rate. Therefore, choice D is the correct answer.

Question 11

Discuss the likely impact of each of the following on the unemployment rate.
a.The length of time workers are eligible to receive unemployment benefit payments is reduced.
b.The government passes a law making trade unions illegal.
c.The minimum wage is raised by 50%.
d.The government funds an Internet site where companies can post job openings at no charge.
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Accepted Answer

The answer of Discuss the likely impact of each of...

Question 12

Trade union membership in Australia in 2017 comprised approximately:

Accepted Answer

According to the Australian Bureau of Statistics, in August 2017, the proportion of employees who were trade union members was 15% of the total workforce.

Question 13

Trade unions cause unemployment because the union contract wage is set:

Accepted Answer

When a union contract sets wages above the market rate, it creates a surplus of labor as more people are willing to work at the higher wage rate than there are available jobs. This can result in unemployment, as not all workers can find employment at the higher wage rate.

Question 14

Which of the following is not an advantage of labour market deregulation?

Accepted Answer

Labour market deregulation may lead to increased competition among workers, leading to a decrease in wages for low-skilled and unskilled workers. This may further exacerbate income inequality and disadvantage low-paid people. Therefore, increased labour market flexibility may not be an advantage for everyone.

Question 15

Paying efficiency wages is a way for a company to cut costs and become more efficient and are therefore lower than market wages.

Accepted Answer

Paying efficiency wages is actually a way for a company to increase costs in order to motivate employees to be more productive and efficient. These wages are higher than market wages and serve as an incentive for workers to perform better.

Question 16

An 'efficiency wage' is:

Accepted Answer

An efficiency wage is a wage that is higher than the market wage, and it is paid to workers to increase their productivity by providing them with a better incentive to work harder and stay with the company for a longer period. Therefore, choice A is the correct answer.

Question 17

Minimum wage laws cause unemployment because the legal minimum wage is set:

Accepted Answer

When the legal minimum wage is set above the market wage, it creates a situation where labour demand is less than labour supply because employers are unwilling or unable to pay the higher wage for the same amount of work. As a result, some businesses may choose to reduce their workforce or hire fewer workers, leading to unemployment among those who cannot find work at the higher wage.

Question 18

Why would a firm pay 'efficiency wages'?
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Accepted Answer

The answer of Why would a firm pay 'efficiency wages'?
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Question 19

What effect does the payment of government unemployment benefits have on the unemployment rate?
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Accepted Answer

The answer of What effect does the payment of government...

Question 20

Explain the three main types of unemployment and outline the types of policies that can be used to reduce each type.
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Accepted Answer

The answer of Explain the three main types of unemployment...

Quiz 7: Unemployment

Most economists agree that trade unions reduce the overall unemployment rate in the economy.

Why might firms pay wages that are above the 'equilibrium wage' in a market?

Explain the changes that have occurred in the level of regulation in the Australian labour market over the past 100 years and discuss the arguments in favour of and against these changes. _ _

Enterprise bargaining is the negotiation of wages and working conditions:

Who might be disadvantaged by deregulation of the labour market? _ _

For most of the twentieth century, Australia had a system of wage determination know as:

Unemployment benefits reduce the 'opportunity cost' of job search.

What effect do unemployment benefits have on job search? _ _

Which of the following has a tendency to raise the unemployment rate?

'Efficiency wages' cause unemployment because firms pay wages that are:

Trade union membership in Australia in 2017 comprised approximately:

Trade unions cause unemployment because the union contract wage is set:

Which of the following is not an advantage of labour market deregulation?

Paying efficiency wages is a way for a company to cut costs and become more efficient and are therefore lower than market wages.

An 'efficiency wage' is:

Minimum wage laws cause unemployment because the legal minimum wage is set:

Why would a firm pay 'efficiency wages'? _ _

What effect does the payment of government unemployment benefits have on the unemployment rate? _ _

Explain the three main types of unemployment and outline the types of policies that can be used to reduce each type. _ _

Quiz 7: Unemployment

Most economists agree that trade unions reduce the overall unemployment rate in the economy.

Why might firms pay wages that are above the 'equilibrium wage' in a market?

Enterprise bargaining is the negotiation of wages and working conditions:

Who might be disadvantaged by deregulation of the labour market? _____________________________________________________________________________________________ _____________________________________________________________________________________________

For most of the twentieth century, Australia had a system of wage determination know as:

Unemployment benefits reduce the 'opportunity cost' of job search.

What effect do unemployment benefits have on job search? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Which of the following has a tendency to raise the unemployment rate?

'Efficiency wages' cause unemployment because firms pay wages that are:

Trade union membership in Australia in 2017 comprised approximately:

Trade unions cause unemployment because the union contract wage is set:

Which of the following is not an advantage of labour market deregulation?

Paying efficiency wages is a way for a company to cut costs and become more efficient and are therefore lower than market wages.

An 'efficiency wage' is:

Minimum wage laws cause unemployment because the legal minimum wage is set:

Why would a firm pay 'efficiency wages'? _____________________________________________________________________________________________ _____________________________________________________________________________________________

What effect does the payment of government unemployment benefits have on the unemployment rate? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Who might be disadvantaged by deregulation of the labour market? _ _

What effect do unemployment benefits have on job search? _ _

Why would a firm pay 'efficiency wages'? _ _

What effect does the payment of government unemployment benefits have on the unemployment rate? _ _