Deck 28: Manufacturing, Productivity, and Labor

Question 1

In the mid-1970s,antitrust policy began a new phase characterized by

A)the use of per se rules.
B)reliance on economic analysis.
C)the definition of a monopoly as a firm with dominant market share.
D)repeal of the Clayton Act.

Answer 1

reliance on economic analysis.

Question 2

The primary area of growth in the modern U.S.economy is

A)the manufacturing sector.
B)the agricultural sector.
C)the service sector.
D)the market for U.S.exports.

Answer 2

the service sector.

Question 3

In the 1970s,members of the Law and Economics program at the University of Chicago argued that

A) per se rules should be adopted by the Supreme Court and used to decide antitrust cases.
B)large firms should always be broken up in order to encourage competition.
C)large market shares may be due to efficient management or innovation.
D)courts should "get out of the antitrust business".

Answer 3

large market shares may be due to efficient management or innovation.

Question 4

Technological innovations and the increasing mechanization of industry

A)have led to long-run aggregate unemployment that is difficult to eradicate.
B)have led to lower wages for skilled workers.
C)mean higher prices for consumers.
D)ultimately create new jobs that replace old jobs.

Question 5

The largest merger in American history was that of

A)Chemical Banking and Chase Manhattan in 1996.
B)America Online and Time Warner in 2000.
C)Gillette's acquisition of Duracell in 1985.
D)Credit Suisse's acquisition of Northern Rock in 2007.

Question 6

Response to the energy crisis of the early 1970s did not include

A)gasoline "rationing by waiting."
B)gasoline "rationing by price."
C)increased bureaucratic involvement.
D)Americans insulating their homes.

Question 7

Explanations for the decline in U.S.productivity in the 1970s and 1980s include all of the following except:

A)difficulties with measuring service sector output.
B)the entry into the labor force of many young,inexperienced workers.
C)a wave of corporate mergers that reduced competition.
D)rising oil prices.

Question 8

The decline in the US manufacturing sector was the result of

A)increasing productivity in the manufacturing sector.
B)the increasing ability of consumers to purchase foreign manufactured goods more cheaply.
C)faster growth of the service sector.
D)All of the above are correct.
E) Only b and c are correct.

Question 9

From the late 1930s until the early 1970s,courts tended to follow per se rules when deciding antitrust cases.According to these rules,

A)a firm's control of a large market share was considered intrinsically illegal.
B)the existence of only one or two firms in an industry was not necessarily an antitrust violation.
C)both market share and predatory practices must be considered in determining whether a firm had violated the law.
D)the court should only intervene if the firm charged "unfair" prices.

Question 10

Ling-Temco-Voight (LTV)is an example of

A)a conglomerate.
B)a vertical merger.
C)a horizontal merger.
D)a limited-liability partnership.

Question 11

From 1950 to 2007,manufacturing as a percentage of GDP went from roughly ____ percent to roughly ____ percent.

A)10;25
B)25;10
C)25;50
D)50;25

Question 12

The period from 1977 through 1989 saw a wave of corporate mergers in the U.S.These mergers were characterized by

A)the use of junk bonds for financing buyouts.
B)the low debt-to-equity ratios of the resulting firms.
C)resulting firms that focused on "core competencies" rather than diversification.
D)a "buyers' market" in which acquiring firms could purchase the stock of takeover targets for less than market value.
E) All of the above.

Question 13

During the 1990s,the nominal price of crude oil ____ and the real price ____.

A)leveled off;fell
B)fell;leveled off
C)rose;fell
D)fell;rose

Question 14

Productivity is defined as

A)output per unit of capital.
B)output per labor hour.
C)output divided by the price level.
D)the percentage change in total annual output.

Question 15

By 2007,energy use per dollar of GDP was ____ percent of what it was in 1970.

A)95
B)80
C)75
D)50

Question 16

Productivity

A)increased slightly from 1970 to 1980.
B)rose rapidly after World War II.
C)is a fundamental determinant of real wages.
D)All of the above are correct.
E) Only b and c are correct.

Question 17

Junk bonds are securities with

A)low risk and low yield.
B)high risk and high yield.
C)low risk and high yield.
D)high risk and low yield.

Question 18

According to Joseph Schumpeter,the success of capitalism relies on

A)continuous,small improvements to existing products.
B)"gales of creative destruction."
C)careful government direction of the manufacturing sector.
D)a strong agricultural sector to support the manufacturing workforce.

Question 19

In the last 20 years all of the following measures of the manufacturing sector have declined except

A)total employment in manufacturing.
B)manufacturing employment as a share of the labor force.
C)manufacturing output as a share of GNP.
D)total manufacturing output.

Question 20

A conglomerate merger is a combination of

A)firms that formerly competed with each other.
B)firms that formerly bought from and sold to each other.
C)firms that produce nearly identical products,but are based in different countries.
D)firms that produce unrelated products or services.

Question 21

The term "path dependence" refers to

A)inefficient outcomes that result from early technology choices that are not optimal in the long run.
B)the tendency for competitive markets to become monopolistic in the long run.
C)inefficient outcomes that result from negative externalities.
D)the natural growth of monopoly when economies of scale exist in a market.

Question 22

All of the following served to reduce labor market discrimination against women and minorities except

A)marriage bars.
B)Title VII of the Civil Rights Act.
C)Johnson's Office of Federal Contract Compliance Program.
D)the Equal Pay Act of 1963.

Question 23

Which of the following statements about the "separate but equal" provision of Plessy v.Ferguson is MOST accurate?

A)resulted in African-American schools that were comparable to white schools.
B)resulted in African-American schools that were preferable to white schools in the South.
C)did not seriously hamper the labor market experience of African-Americans.
D)led to the creation of African-American schools that were systematically under funded.

Question 24

Productivity growth in the service sector

A)is notoriously difficult to measure.
B)is comparable to productivity growth in agriculture.
C)has been slow compared with productivity growth in manufacturing.
D)Both a and b are correct.
E) Both a and c are correct.

Question 25

Which of the following statements correctly characterizes the trend in real wages since 1960?

A)The real product wage kept pace with labor productivity,but the real consumption wage was fairly stagnant.
B)The real consumption wage kept pace with labor productivity,but the real product wage fell.
C)Labor productivity fell,leading to declines in both the real product wage and the real consumption wage.
D)Both the real consumption wage and the real product wage remained stable over the last 40 years.

Question 26

According to the text,which of the following factors contributed to the increased labor force participation rate of women during the postwar period?

A)rising real wages
B)an increase in the years of schooling completed by women
C)declining fertility rates
D)the growth of the service sector
E) All of the above

Question 27

Which is not a cause of the deterioration of the strength of labor?

A)the rise of the service sector
B)regional shifts in manufacturing
C)foreign industrial competition
D)a high rate of immigration of unskilled workers who tend to fear taking part in union activities.
E) All of the above are correct.

Question 28

Key features of the American labor market in the postwar period include all of the following except

A)the growth of service sector employment.
B)increased labor force participation rate of women with young children.
C)steadily increasing union membership.
D)the erosion of discriminatory barriers for women and minority members.

Question 29

Relative to the white median family income,since 1980 African-American median family income has ________ and Hispanic median family income has __________.

A)increased;also increased
B)fallen;also fallen
C)increased;remained about the same
D)fallen;increased

Question 30

In 2001,the labor force participation rate of married women equaled ________.

A)about 10 percent.
B)about 25 percent.
C)just over 60 percent.
D)more than 80 percent.

Question 31

New immigration laws championed by the Kennedy and Johnson administrations

A)established a quota system based on ethnic background.
B)allowed for unlimited immigration.
C)placed a high priority on uniting families.
D)led to reduced immigration rates in the 1960s and 1970s.
E) All of the above.

Question 32

All of the following have played a role in reducing union strength since 1970 except

A)rising service sector employment.
B)foreign industrial competition.
C)the Supreme Court's decision to apply antitrust laws to union organization efforts.
D)"right-to-work" laws.

Question 33

In 2001,the percent of total employment in the manufacturing,mining,and construction sector equaled

A)less than 20 percent.
B)30 percent.
C)40 percent.
D)60 percent.

Question 34

During the postwar period,the portion of total employment declined in the ______ sector.

A)agricultural
B)manufacturing
C)mining
D)construction
E) All of the above.

Question 35

In 2001,women in most occupations earned ________ of what males in the same occupation earned.

A)less than 30 percent
B)about 50 percent
C)about 70 percent
D)about 90 percent

Question 36

By 1964,nearly all blacks outside the South were covered by laws that allowed the government to issue cease and desist orders against discriminating firms.According to recent research by William Collins,these laws

A)were successful in improving the wages and working conditions of all African-Americans.
B)were successful in improving the wages and working conditions of only Southern African-Americans.
C)led to lower wages and deteriorating working conditions for African-Americans.
D)had some success in improving the wages and working conditions of African-American women.

Question 37

Which of the following statements correctly characterizes fertility rates in the postwar period?

A)The birth rate rose steadily,beginning during the Great Depression and continuing until 1950.
B)The birth rate peaked in the late 1950s,then began a steep decline reaching very low rates in the 1970s.
C)The birth rate has fallen steadily since 1940 due to the increased labor force participation of women.
D)During the postwar period,the birth rate has tended to rise in during recessions and fall during periods of economic growth.

Question 38

Between 1960 and 2001,the labor force participation rate increased for each of the following groups except

A)married women
B)married men
C)single women
D)single men

Question 39

Paul David examined _______________ as an example of path dependence.

A)Microsoft's Windows operating system
B)the VHS format
C)the QWERTY keyboard
D)hydroelectric power generators

Question 40

According to the text,the growth of service sector employment in the US has contributed to

A)higher unemployment rates in the postwar period.
B)a slowdown in the growth of real wages during the postwar period.
C)reduced economic stability in the postwar period.
D)an increase in the power and membership of unions.
E) All of the above.

Question 41

According to economic theory,the real wage should

A)be greater than the price of the product produced.
B)equal the marginal physical product of labor.
C)be less than the marginal product of capital.
D)decline as productivity rises.

Question 42

The introduction of computer-based technologies in the telephone industry caused

A)an increase in the supply of telephone services.
B)an increase in the demand for telephone services.
C)an increase in the price of telephone services.
D)a decrease in the number of calls handled daily by telephone companies.

Question 43

Measured in BTUs per dollar of real GDP,energy consumption fell by only 5 percent between 1970 and 1975,but had fallen by almost 30 percent by 1990.These figures illustrate the fact that

A)energy demand does not respond to price changes in the short run.
B)energy demand does not respond to price changes in the long run.
C)energy demand is more elastic in the short run than in the long run.
D)energy demand is more elastic in the long run than in the short run.

Question 44

An increase in the price of oil causes

A)a decrease in the demand for substitute goods.
B)an increase in the price of substitute goods.
C)an increase in the demand for complementary goods.
D)an increase in the price of complementary goods.

Question 45

During the postwar period,increased real wages for women led to an increase in the labor force participation rate for women.This implies that,for women,

A)the substitution effect of a wage increase is greater than the income effect.
B)the substitution effect of a wage increase is less than the income effect.
C)the substitution effect of a wage increase equals the income effect.
D)wage increases do not have an income effect.

Question 46

Suppose that wages are higher in one geographic region (Region 1)of a country than in another geographic region (Region 2).Given free migration of workers,

A)wages in the two regions will become even more divergent.
B)wages in Region 1 will rise.
C)wages in Region 2 will rise.
D)employment in Region 2 will rise.

Question 47

Using a Cobb-Douglas production function and assuming the share of labor used in production remains constant,it can be shown that

A)real wages will increase in tandem with the price of capital.
B)a stable relationship will exist between the average product of labor and the marginal product of labor.
C)real wages will decrease as the average product of labor increases.
D)real wages and output are inversely related.

Question 48

During the postwar period,changing patterns of consumer demand led to changes in the distribution of jobs in the US economy.In particular,the income elasticity of demand for many consumer products was ____________ the income elasticity of demand for services,such as medical care and insurance.

A)less than
B)greater than
C)equal to