Deck 13: Government and the Labor Market: Legislation and Regulation

Question 1

Prior to the 1930s,union membership growth was relatively:

A)slow,due to the use of blacklisting,injunctions,and yellow dog contracts
B)slow,due to the widespread use of lockouts and strikebreakers authorized under the Norris-LaGuardia act
C)rapid,due to the favorable court treatment of union activity provided by passage of the Sherman Act of 1890
D)rapid,due to favorable court interpretations concerning workers' property rights

Answer 1

A

Question 2

According to the Taft-Hartley Act,which of the following is not an unfair labor practice by unions?

A)Striking a company over a jurisdictional dispute with another union
B)Striking a company as a means of trying to obtain a collective bargaining agreement with that firm
C)Striking a company to show sympathy for another union in obtaining employer recognition
D)Setting excessive union dues

Answer 2

B

Question 3

The Landrum-Griffin Act:

A)established unfair labor practices by employers
B)declared yellow-dog contracts unenforceable
C)outlawed the closed shop
D)required regularly scheduled elections of union officers

Answer 3

D

Question 4

Which of the following established unfair labor practices by employers?

A)Norris-LaGuardia Act
B)Taft-Hartley Act
C)Wagner Act
D)Landrum-Griffin Act

Question 5

A majority of the workers earning the minimum wage:

A)are males
B)are females
C)work full-time
D)are teenagers

Question 6

Which of the following established unfair labor practices by unions?

A)Norris-LaGuardia Act
B)Taft-Hartley Act
C)Wagner Act
D)Landrum-Griffin Act

Question 7

Consider the diagram.Suppose the government establishes a minimum wage of $7.00 in this market.Employment would decline by _____ workers and unemployment would increase by _____ workers.

A)20,20
B)20,35
C)35,20
D)35,35

Question 8

Public sector union growth was most encouraged by:

A)the Wagner Act
B)the Taft-Hartley Act
C)The Landrum-Griffin Act
D)a series of executive orders and state laws recognizing the rights of public sector workers to organize

Question 9

Which of the following increased management's bargaining power?

A)Limiting the use of injunctions to enjoin a strike
B)Limiting the use of "hot-cargo" clauses
C)Limiting the use of "yellow-dog" contracts
D)Creation of the National Labor Relations Review Board

Question 10

The "twin rights" of labor (self-organization and collective bargaining)were guaranteed by the:

A)Fair Labor Standards Act
B)Wagner Act
C)Taft-Hartley Act
D)Landrum-Griffin Act

Question 11

"Yellow-dog contracts":

A)were used by employers to restrict union membership
B)require workers to join a union as a condition of continued employment
C)were upheld by the Taft-Hartley Act
D)were outlawed by the Landrum-Griffin Act

Question 12

The federally mandated minimum wage:

A)is adjusted each year by an act of Congress to account for inflation
B)typically falls in value owing to inflation until periodically adjusted by Congress
C)is adjusted automatically whenever its inflation-adjusted value falls below its original value established in 1938
D)is substantially below its original 1938 value in real terms because of the effect of inflation

Question 13

According to the Wagner Act,which of the following is not an unfair labor practice by employers?

A)Firing an employee who joins or sympathizes with a union
B)Establishing a company union
C)Interfering with union organizing activity
D)Failing to reach a collective bargaining agreement after bargaining in good faith

Question 14

Which one of the following laws most dramatically increased union bargaining power?

A)Sherman Act
B)Wagner Act
C)Taft-Hartley Act
D)Landrum-Griffin Act

Question 15

Of the following laws,which one contributed most to union membership?

A)Landrum-Griffin Act
B)Norris-LaGuardia Act
C)Sherman Act
D)Taft-Hartley Act

Question 16

A court order to prevent actions such as picketing,striking,and boycotting is called a(n):

A)yellow-dog contract
B)blacklist
C)lockout
D)injunction

Question 17

Which of the following outlawed company unions?

A)Fair Labor Standards Act
B)Wagner Act
C)Taft-Hartley Act
D)Landrum-Griffin Act

Question 18

Which one of the following required unions to hold regularly scheduled elections of union officers?

A)Norris-LaGuardia Act
B)Taft-Hartley Act
C)Wagner Act
D)Landrum-Griffin Act

Question 19

Which of the following gave states the option to pass so-called "right-to-work" laws?

A)Fair Labor Standards Act
B)Wagner Act
C)Taft-Hartley Act
D)Landrum-Griffin Act

Question 20

The prohibition of secondary boycotts:

A)reduced management's bargaining power by reducing the union's cost of disagreeing
B)reduced management's bargaining power by reducing management's cost of disagreeing
C)increased management's bargaining power by increasing the union's cost of disagreeing
D)increased management's bargaining power by increasing management's cost of disagreeing

Question 21

The provision of job safety is generally subject to the law of diminishing returns,which implies that:

A)the marginal benefit of safety is downward sloping
B)the marginal benefit of safety is upward sloping
C)the marginal cost of safety is downward sloping
D)the marginal cost of safety is upward sloping

Question 22

Answer questions based on the following table, in which MBs and MCs are the marginal benefit and marginal cost of safety, respectively. Ps is the probability that a worker will not suffer an injury on the job during a one year period, and is thus a measure of job safety.


$\begin{array}{l}\begin{array}{l}\underline{P}_{s} \\.65 \\.70 \\.75 \\.80 \\.85 \\.90 \\.95\end{array}\begin{array}{c}\underline{MB}_{s}\\{25} \\22 \\19 \\16 \\13 \\10 \\7\end{array}\begin{array}{c}\underline{MC}_{s}\\8\\10 \\12 \\14 \\16 \\18 \\20\end{array}\end{array}$

-If workers underestimate the actual amount of risk associated with the job because of imperfect information,the values in the:

A)MB_s column will understate the true marginal benefit and the profit-maximizing level of job safety will be less than the optimal level
B)MB_s column will overstate the true marginal benefit and profit-maximizing level of job safety will exceed the optimal level
C)MC_s column will overstate the true marginal cost and the profit-maximizing level of job safety will exceed the optimal level
D)MC_s column will understate the true marginal cost and the profit-maximizing level of job safety will exceed the optimal level

Question 23

Suppose this labor market is monopsonistic,so that the wage is W₁ and employment is Q₁.If W* is imposed as the minimum wage,then employment in this market:

A)will rise to Q₂
B)will rise to Q₄
C)will fall
D)will remain the same

Question 24

Suppose this firm is a perfectly discriminating monopsonist.If W* is imposed as the minimum wage,then:

A)employment will rise from Q₁ to Q₂
B)employment will fall from Q₃ to Q₁
C)employment will fall from Q₃ to Q₂
D)employment will be unaffected

Question 25

Consider the diagram.Suppose the government establishes a minimum wage of $7.00 in this market.If all displaced workers subsequently contribute an amount equal to their next most productive employment,the net loss of domestic output is:

A)$17.50
B)$40
C)$50
D)$75

Question 26

Answer questions based on the following table, in which MBs and MCs are the marginal benefit and marginal cost of safety, respectively. Ps is the probability that a worker will not suffer an injury on the job during a one year period, and is thus a measure of job safety.


$\begin{array}{l}\begin{array}{l}\underline{P}_{s} \\.65 \\.70 \\.75 \\.80 \\.85 \\.90 \\.95\end{array}\begin{array}{c}\underline{MB}_{s}\\{25} \\22 \\19 \\16 \\13 \\10 \\7\end{array}\begin{array}{c}\underline{MC}_{s}\\8\\10 \\12 \\14 \\16 \\18 \\20\end{array}\end{array}$

-The profit-maximizing level of job safety is a probability level of:

A)0.65
B)0.75
C)0.80
D)0.85

Question 27

Increases in the minimum wage tend to:

A)increase both formal schooling and general on-the-job training
B)increase formal schooling and reduce general on-the-job training
C)reduce formal schooling and increase general on-the-job training
D)reduce both formal schooling and general on-the-job training

Question 28

Firms will reduce job safety as long as:

A)potential cost savings are at least as great as wage increases that might have to be paid to attract labor into risky jobs
B)potential cost savings are less than wage increases that might have to be paid to attract labor into risky jobs
C)the marginal cost of safety is positive
D)the marginal benefit of safety to the firm is very large
Answer

Question 29

Which of the following best describes the amount of job safety?

A)Firms have no incentive to provide a safe environment,so there is too little safety
B)Only unionized firms can negotiate for a safe environment,so they have safe jobs while nonunion workers must work in unsafe environments
C)Firms have some incentive to provide safety,but imperfect information and labor immobility cause safety to be over-provided
D)Firms have some incentive to provide safety,but imperfect information and labor immobility cause safety to be under-provided

Question 30

If OSHA were to become increasingly effective in reducing workplace hazards,then:

A)firms' profits would be increased
B)wage differentials between safe and hazardous jobs would diminish
C)wage differentials between safe and hazardous jobs would increase
D)employment in safe jobs would increase and employment in hazardous jobs would decrease

Question 31

Empirical estimates of OSHA's effectiveness at reducing risk of injury and death on the job have:

A)been mixed
B)shown no changes at all in fatal or non-fatal injuries
C)shown substantial reductions in both fatal and non-fatal injury rates
D)shown substantial increases in both fatal and nonfatal injury rates

Question 32

From society's standpoint,the optimal level of safety is:

A)0
B)Q_s'
C)Q_s
D)Q*

Question 33

The MC_s curve is upward sloping because:

A)firms initially use relatively low-cost techniques to improve worker safety
B)workers' marginal utility of safety is increasing
C)wages must be increased the more safety is increased
D)more safety allows the firm to pay lower wages,which makes it harder and more costly to recruit workers

Question 34

Which of the following is given as a justification of the health and safety standards established by OSHA?

A)Workers overestimate the amount of risk associated with jobs,resulting in a larger than optimal wage premium for hazardous jobs
B)Workers underestimate the amount of risk associated with jobs,resulting in a larger than optimal wage premium for hazardous jobs
C)Firm overestimate the amount of risk associated with jobs,resulting in a smaller than optimal wage premium for hazardous jobs
D)Information and occupational mobility are imperfect,so that the wage premium for job safety provides inadequate incentive for firms to provide safety

Question 35

Suppose this labor market is competitive,so that the wage rate is W₂ and employment is Q₃.If W* is imposed as the minimum wage,then employment in this market:

A)will rise
B)will fall
C)will remain the same
D)may or may not change; more information is required

Question 36

Consider the diagram.Suppose the government establishes a minimum wage of $7.00 in this market.Which of the following is a true statement?

A)Demand is elastic over the relevant range,so that total wage income rises
B)Demand is elastic over the relevant range,so that total wage income falls
C)Demand is inelastic over the relevant range,so that total wage income rises
D)Demand is inelastic over the relevant range,so that total wage income falls

Question 37

Examining evidence on the impacts of increases in state minimum wages in New Jersey and California,Card and Krueger found:

A)substantial reductions in employment,particularly among teens
B)no increases in wages of low-wage workers,because employers flouted the law
C)no evidence of reductions in employment
D)poor quality of the data collected by Neumark and Wascher

Question 38

The firm's profit-maximizing level of safety is:

A)0
B)Q_s'
C)Q_s
D)Q*

Question 39

Which one of the following claims concerning the minimum wage is generally supported by empirical evidence?

A)The minimum wage has only a minor impact on the overall degree of income inequality
B)The minimum wage has increased teenage employment as a result of the shock effect
C)Union members suffer the greatest negative impacts of the minimum wage
D)The reduction in teen employment due to the minimum wage is less than the increase in unemployment

Question 40

A monopsonist is currently paying its 1,000 workers $5.00 per hour.However,its marginal wage cost is $6.00 per hour.If the government sets a minimum wage of $5.50,then:

A)employment at this firm will rise
B)employment at this firm will fall
C)employment at this firm will be unaffected
D)employment at this firm will rise but the firm's total wage bill will fall

Question 41

Which of the following would unambiguously increase the economic rent of current dental assistants?

A)Requiring all future dental assistants to get an advanced degree
B)Requiring all current and future dental assistants to get an advanced degree
C)Requiring all current dental assistants to get an advanced degree
D)Requiring all dental assistants to work under the direct supervision of a dentist
Question 47 refers to the following diagram:

Question 42

Questions 43 and 44 refer to the following diagram.

The collective amount of economic rent being earned by workers in this competitive market is:

A)zero
B)ACD
C)ABD
D)0ADE

Question 43

(World of Work 13-1)"Living wage" laws:

A)apply minimum wage laws to workers who would not otherwise be covered by the federal minimum wage
B)generally apply to employers who are under contract or receiving financial assistance from local government
C)typically require covered employers to pay a wage more than three times the minimum wage
D)have had negligible effects on employment or poverty status of covered employees

Question 44

(World of Work 13-2)With respect to workers' compensation insurance,research by Moore and Viscusi indicates that job fatalities are:

A)reduced because the positive incentive effect swamps the negative moral hazard effect of the law
B)reduced because the negative moral hazard effect swamps the positive incentive effect of the law
C)increased because the positive incentive effect swamps the negative moral hazard effect of the law
D)increased because the negative moral hazard effect swarms the positive incentive effect of the law

Question 45

Questions 43 and 44 refer to the following diagram.

Suppose this represents the market for U.S.autoworkers.If the government were to pass legislation mandating that all vehicles sold in the U.S.contain at least 50% domestically produced or assembled components,then:

A)supply would shift to the right,reducing economic rent to U.S.autoworkers
B)supply would shift to the left,reducing economic rent to U.S.autoworkers
C)demand would shift to the right,reducing economic rent to U.S.autoworkers
D)demand would shift to the right,increasing economic rent to U.S.autoworkers

Question 46

Suppose a state law is passed which prohibits the state liquor board from issuing any new liquor licenses. (Such licenses are required to sell liquor.)The law would allow prospective tavern operators to purchase an existing license on the open market from a willing current owner of such a license.Which outcome would you expect to result from this regulation?

A)A decrease in economic rent to current holders of liquor licenses
B)An increase in economic rent to current holders of liquor licenses
C)An increase in economic rent to prospective operators of taverns
D)No change in economic rent to prospective operators of taverns

Question 47

Consider a proposed law to deregulate the hair-care industry.Barbers would be allowed to do work previously confined to stylists,and the latter would no longer be required to pass strict licensure exams.Which outcome would you expect to result from this deregulation?

A)A decrease in economic rent to current stylists
B)A decrease in economic rent to current barbers
C)An increase in economic rent to beauty school operators
D)An increase in economic rent to workers in occupations in which displaced stylists find jobs

Question 48

The increase in economic rent shown in the diagram is consistent with:

A)setting a limit on the number of licensed employees in this occupation
B)imposing a tariff on similar products produced by foreigners
C)imposing a quota on similar products produced by foreigners
D)imposing a requirement that all future employees in this occupation obtain an advanced degree

Question 49

A "domestic content" law for automobiles would increase the economic rent of workers in the U.S.automobile industry by:

A)decreasing the demand for autoworkers in the U.S.
B)decreasing the supply of U.S.autoworkers in the U.S.
C)allowing U.S.autoworkers to obtain higher wages even though employment falls in the U.S.automobile industry
D)increasing the demand for autoworkers in the U.S.and pulling up their wages