Deck 8: The Environment for Bargaining

Question 1

Deregulation created competition in wages between union and nonunion sectors of the industries.

Answer 1

True

Question 2

Permissive bargaining has no direct impact on management or labor costs.

Answer 2

True

Question 3

Employers are likely to be able to pass on the cost of a wage increase if they are in a noncompetitive product market.

Answer 3

True

Question 4

The marginal supply curve represents additional cost associated with expanding the workforce.

Question 5

Economic theory suggests workers will be added until the added value of the additional output no longer exceeds the wage.

Question 6

The derived demand for labor is more inelastic if a given type of labor is essential in the production of the final products.

Question 7

Union's bargaining power is reduced when the employer has a monopoly in the product or service market.

Question 8

Marginal revenue product is the value of the output produced by the existing workforce.

Question 9

Pattern bargaining represents a form of quasi-industrywide bargaining.

Question 10

The Railway Labor Act injected the federal government into transportation negotiations in the form of the National Mediation Board.

Question 11

In concentrated industries,the demand for a firm's product is never completely elastic.

Question 12

Local union officers are often elected by multiple bargaining units.

Question 13

A competitive market is one with relatively few producers.

Question 14

Conglomerates cannot afford to take a long strike at any subsidiary.

Question 15

The demand for goods and services in a competitive market is highly elastic.

Question 16

In an industry where all employers offer essentially similar goods and services,a wage increase is easy to pass on to customers.

Question 17

Pattern bargaining has occurred frequently in companies in highly unionized fragmented industries.

Question 18

A conglomerate has low bargaining power.

Question 19

The goal of conglomerates created by private equity is to refloat the businesses through initial public offerings as independent companies.

Question 20

Employees unionize to obtain outcomes that they believe they are unable to obtain as individuals.

Question 21

_____ enabled new companies to enter the industry and created competition in wages between union and nonunion sectors of the industries.

A) Accretion
B) Craft severance
C) Pattern bargaining
D) Deregulation

Question 22

In railroads and airlines,the Railway Labor Act requires that bargaining units need not be organized on a craft basis.

Question 23

Why was the FMCS established?

A) To help parties reach an agreement in simple situations only
B) To legislate rules for simple disputes that prohibited the use of strikes under any circumstances
C) To help parties reach an agreement during national emergency situations only
D) To define a set of union unfair labor practices to balance those that employers were forbidden to use

Question 24

With the focus moving from a corporate to a business-unit perspective,unions have gained leverage on economic issues.

Question 25

Which of the following is a characteristic of competitive markets?

A) Consumers know very little about product attributes and prices.
B) The demand for goods and services is highly inelastic.
C) Producers are compelled to respond to price decreases.
D) There are relatively few producers selling similar products.

Question 26

The NLRB ordered consent elections in companies where labor and management did not dispute the makeup of the bargaining unit for representation purposes.

Question 27

How does global competition affect unions?

A) It reduces union bargaining power for representatives of employees.
B) It allows unions to bargain for higher wages because of the lack of skilled labor.
C) It increases the employment of domestic workers in basic industries.
D) It protects unionized employees against offshoring.

Question 28

Nonunion competition is reduced by requiring equivalent pattern agreements.

Question 29

What does section 8(d)of the Taft-Hartley Act explain about collective bargaining?

A) To bargain collectively is the performance of the mutual obligation of the employer and representative of the employees.
B) Employer and union are prohibited from bargaining collectively on any topic except wages and hours.
C) No party can request for a written contract incorporating agreement reached.
D) Each party is obligated to reach an agreement or make a concession.

Question 30

_____ in basic industries has decreased the wages and employment of domestic workers.

A) Prohibited bargaining
B) Global competition
C) Permissive bargaining
D) Unionization

Question 31

Which of the following is true of unionization in a competitive industry?

A) Unions don't focus on competitive industry companies unless they are concentrated geographically.
B) Unionization in competitive industry requires not much of an effort.
C) Unions focus on competitive industry companies except when the employees prohibit any form of assistance.
D) Organizing one company gives the union all the bargaining power on wages.

Question 32

Which of the following is true about labor and World War II?

A) All disputes were put on hold until the war was over.
B) Strikes were permitted.
C) All collective bargaining agreements required the approval of the federal government.
D) Wages and prices were never administered.

Question 33

Coordinated bargaining occurs where a single union represents employees of several small employers.

Question 34

Which bargaining issues do not require a response because they have no direct impact on management or labor costs?

A) Permissive
B) Mandatory
C) Prohibited
D) Legislative

Question 35

Excessive industrial concentration is dealt with by _____.

A) the courts
B) the National Mediation Board
C) the Federal Trade Commission
D) individual companies

Question 36

Which of the following are classified as mandatory bargaining issues?

A) Issues that have no direct impact on management
B) Internal affairs of the union
C) Issues that have a direct effect on union members' jobs
D) Issues that are statutorily outlawed

Question 37

How did deregulation affect the airline industry?

A) It had a relatively strong initial effect on mechanics' pay.
B) Pilots' salaries increased substantially.
C) Flight attendants' salaries decreased.
D) Pilots found alternative jobs in their occupation in other industries.

Question 38

When does the elasticity of demand for a firm's product increase substantially?

A) When an industry is no longer concentrated
B) When there is decreased consumer attention to quality
C) When there is nonavailability of labor
D) When there is a lack of substitute products

Question 39

Which of the following is true about permissive bargaining issues?

A) They do not require a response.
B) They have a direct impact on management and labor costs.
C) They are statutorily outlawed.
D) Any party may go to impasse over the issue.

Question 40

Which of the following takes place when an industry matures?

A) It forces more efficient producers to increase prices to gain market share.
B) It forces the producers to substitute skilled craft work with cheaper labor.
C) It results in less standardized production methods thus forcing employers to hire low skilled labor.
D) It gets dominated by relatively few firms and the less dominant either mimic the leader or occupy niches.

Question 41

Which of the following statements about competitive and/or concentrated markets is true?

A) In competitive industries,demand for a firm's product is highly inelastic.
B) The demand for each employer's products in concentrated industries is highly price-sensitive.
C) The labor demand in concentrated industries is less elastic than it is in the competitive situation.
D) Wage increase can be easily passed on to customers in competitive industries.

Question 42

When is the supply of labor elastic?

A) When an employer is a relatively small factor in a labor market
B) When there are a lot of employment opportunities in the market
C) When several employers hire the same type of labor simultaneously
D) When the rate of unemployment is low in the market

Question 43

Which of the following is true of labor markets?

A) The union can never acquire monopoly power over the labor supply.
B) The union supplies the labor,but the contract has no authority on fixing its price.
C) Unions stay away from employers that have power to influence prices in the product market and/or wages in the labor market.
D) A contracted wage elasticizes the labor supply at the negotiated rate.

Question 44

In which of the following conditions will the employer have higher ability to continue operations?

A) When the strike is in peak season
B) When the firm is capital-intensive
C) When high skilled labor is not easily replaceable
D) When an employer has only one plant that produces the product

Question 45

When is the derived demand for labor more inelastic?

A) If a given type of labor is essential in the production of the final products
B) If the market demand for the final products is elastic
C) If the cost of labor is a significant part of the total product cost
D) If the supply of materials is elastic

Question 46

What are the two major goals of unions?

A) Higher wages and more members
B) Maximizing profit and share value
C) Reduce risk of investments and diversification
D) Mergers and acquisitions of firms

Question 47

In which of the following scenarios will the employer be less able to take a strike?

A) If employers implement just-in-time inventory systems
B) If the firm is capital intensive
C) If the employer has several plants producing the same product
D) If the jobs' skill level is low

Question 48

When does the most successful multiemployer bargaining occur?

A) When the employers have varied nonlabor costs
B) When all employers are unionized
C) When the entry costs are low for new firms
D) When the negotiated wages do not apply to all

Question 49

Which of the following best describes a monopsonist employer?

A) A single producer of a specific product in a given market
B) The only unionized employer in a given market
C) A single purchaser of labor in a given market
D) The most dominating producer in a given market

Question 50

The derived demand for labor is more elastic if the:

A) market demand for the final products is inelastic.
B) cost of labor is a significant part of the total product cost.
C) supply of materials is elastic.
D) supply of capital is elastic.

Question 51

What does management do to meet investor objectives?

A) They sell-off a higher-earning division.
B) They stay away from a possible spin off.
C) They shift investment from areas with increasing returns to those where improvement is never anticipated.
D) They try to maximize profits in their present operations.

Question 52

Which of the following is most likely to happen when a union bargains with a monopsonist employer for increased wages beyond a point where MS and MRP intersect?

A) Employer will incur unviable labor costs.
B) Employer will be forced to layoff employees.
C) Employer will be able to expand employment.
D) Employer will be able to increase profits substantially.

Question 53

Which of the following is true about health and pension costs?

A) They are largely determined by the control of the bargainers.
B) They are not related to the age of the workers.
C) They are not determined by the prices of financial services.
D) They are related to the prices of medical services.

Question 54

Under which condition is union's wage gains in bargaining higher?

A) When new employers can easily enter the market
B) When industrial concentration is low
C) When foreign competition is low
D) When union coverage by dominant union is low

Question 55

Which of the following best describes marginal revenue product?

A) It is the value of output produced by hiring an additional worker.
B) It represents the additional cost associated with expanding the workforce.
C) It is the price at which the product is allowed to be sold in the retail market.
D) It is the total revenue generated times the labor cost.

Question 56

Employers are likely to be able to pass on the cost of a wage increase if they _____.

A) are in a competitive product market
B) are in a concentrated industry
C) are in a noncompetitive product market
D) sell products that have an elastic demand

Question 57

What would an employer in a competitive market do when the cost of labor increases?

A) Reduce cost on capital
B) Change capital-labor mix
C) Hire only unskilled workers
D) Decrease its dependence on technology

Question 58

Which of the following is true of a multiemployer bargaining unit?

A) A single set of negotiators and negotiated wages applies to all members.
B) The contract expires at different times for all.
C) Each employer faces a product and service demand curve totally different from the market demand curve.
D) If the market demand for the employers' goods and services is quite inelastic,none of the wage increases can be passed.

Question 59

Employers in the private sector are interested in _____.

A) maximizing long-term return to the investment in skills
B) maximizing long-term profits
C) encouraging all employees to join unions
D) increasing employment wages

Question 60

Which of the following is true of the marginal supply curve?

A) It represents the value of output produced by hiring an additional worker.
B) It represents the graph of product supply and demand.
C) It represents the graph of labor supply and demand.
D) It represents the additional cost associated with expanding the workforce.

Question 61

How do unions demonstrate their effectiveness?

Question 62

Describe the characteristics of a competitive industry.

Question 63

How do integrated facilities affect an employer's ability to take on strikes?

Question 64

When is the derived demand for labor more inelastic?

Question 65

Which of the following is true about bargaining units?

A) Where local unions service several bargaining units,local officers are very concerned about the content of individual contracts.
B) At its most elemental level,a bargaining unit is what labor and management say it is.
C) After the representation stage,the parties are free to make the bargaining unit less (but not more)inclusive in negotiations.
D) The expansion of a bargaining unit results only if management forces the union to do so.

Question 66

Which of the following is true of a conglomerate?

A) It has low bargaining power.
B) It is a business operating in several distinct industries.
C) Its parts depend on each other for components and processes.
D) It can never afford to take a long strike at any of its subsidiary.

Question 67

Why does a conglomerate have higher ability to take on a long strike at any subsidiary?

A) A few parts of its business are large relative to others.
B) Its parts do not depend on each other for components or processes.
C) It has low bargaining power.
D) It deals with a single union and has contracts with the same expiration.

Question 68

What is a marginal supply curve? Explain with an example.

Question 69

Unions must be able to reduce competition with both nonunion and union workers to improve conditions.Nonunion competition is reduced through _____.

A) requiring equivalent pattern agreements
B) covering only nonunion labor
C) extending organizing
D) unionizing only the dominant producer

Question 70

What is pattern bargaining?

A) Union targets one dominant employer in a highly concentrated industry
B) Union bargains with many small employers from a particular geographic area
C) Union bargains with a large employer that has many competitors
D) Union bargains with a small employer who has many competitors

Question 71

What are the changes that occur from the time of infancy to maturity of an industry?

Question 72

When does industrywide bargaining take place?

A) When employees stick to a single employer within a small geographic area
B) When products or services are essentially commodities
C) When the bargaining occurs within a relatively small geographic area
D) When the bargaining is done in a business operating in several distinct industries

Question 73

Which of the following is true about the changes in industrial bargaining structures and their outcomes?

A) Professional sports are the least organized,with baseball and basketball players exercising low bargaining strength.
B) Declining unionization in health care and the consolidation of health care providers has led to the reduced use of organization-wide bargaining structures.
C) Unionization in the construction industry has increased as employers have increasingly established nonunion subsidiaries.
D) The Communications Workers have some of the major local operators who are neutral in organizing campaigns and/or allow card checks for recognition in their wireless business units.

Question 74

How does the composition of the workforce affect productivity and labor costs of employers?

Question 75

Under which act do bargaining units need to be organized on a craft basis?

A) Taft-Hartley Act
B) Norris-La Guardia Act
C) Railway Labor Act
D) Wagner Act

Question 76

List some of the steps that a firm can take to increase profitability.

Question 77

Which of the following best describes coordinated bargaining?

A) Dominant union chooses a major employer as a bargaining target
B) Bargaining in businesses operating in several distinct industries
C) Two or more national unions represent employees of a single major employer
D) A single set of negotiators speaks for all employers

Question 78

Write a short note on industrywide bargaining.

Question 79

Explain the labor-capital substitution.

Question 80

A _____ arrangement increases union bargaining power but is also accompanied by an increased willingness to try innovative solutions to employment problems during a period of rapid technological change in the telecommunications industry.

A) coalition
B) local
C) permissive
D) industrywide