Deck 31: Labor Unions

Question 1

Public sector unions now

A)Represent a smaller percentage of workers than private sector unions.
B)Are growing at a smaller rate than private sector unions.
C)Represent over five times the percentage of workers in private sector unions.

Answer 1

Represent over five times the percentage of workers in private sector unions.

Question 2

Because firms are willing to hire additional workers at lower wages,the market labor demand curve is

A)Vertical.
B)Perfectly elastic.
C)Downward-sloping.

Answer 2

Downward-sloping.

Question 3

Labor supply can be defined as the

A)Total number of people who are employable.
B)Total number of people in paid employment.
C)Willingness and ability of people to work at alternative wage rates in a given period of time,ceteris paribus.

Answer 3

Willingness and ability of people to work at alternative wage rates in a given period of time,ceteris paribus.

Question 4

The largest employer in the United States is

A)The federal government.
B)General Motors.
C)Walmart.

Question 5

Because a union is a form of monopoly,it must be concerned about the ________ slope of the demand curve for labor.

A)vertical
B)horizontal
C)downward

Question 6

The largest labor union in the United States is the

A)International Brotherhood of Teamsters (Teamsters).
B)International Union,United Automobile,Aerospace and Agricultural Implement Workers of America (UAW).
C)Service Employees International Union.

Question 7

The equilibrium wage rate is determined by

A)Individuals but not firms.
B)Market labor supply and market labor demand.
C)Labor unions.

Question 8

Workers who demand a wage that is higher than the equilibrium wage

A)Will find it difficult to secure a job.
B)Will easily secure a job.
C)Must belong to a union in order to secure a job.

Question 9

Workers with a particular skill are represented by

A)Craft unions.
B)Skill unions.
C)Market unions.

Question 10

Typical goals of a labor union in the United States include

A)Higher wages,better working conditions,and more job security.
B)Higher profit,lower output,and greater productivity.
C)Less work,more workers,and more overtime.

Question 11

If the total wages paid change from $200,000 to $250,000 when the quantity of labor employed increases from five to seven workers,the marginal wage is

A)$35,714.
B)$25,000.
C)$250,000.

Question 12

The demand for labor determines the

A)Total number of people who want to work.
B)Number of available jobs.
C)Willingness and ability of people to work at alternative wage rates.

Question 13

A union evaluates job offers based on the

A)Individual interests of its members.
B)Collective interests of its members.
C)Location of the work,either in the private or public sector.

Question 14

The difference between craft unions and industrial unions is that industrial unions usually

A)Are organized along democratic lines,while craft unions are undemocratic.
B)Include workers in an industry,while craft unions represent workers with a particular skill.
C)Include workers with a particular skill,while craft unions represent workers in an industry.

Question 15

Which of the following is an example of an industrial union?

A)The International Brotherhood of Electrical Workers.
B)The Carpenters Union.
C)The United Auto Workers.

Question 16

Unions must worry about the marginal wage because it indicates the

A)Wage at which demand and supply intersect.
B)Opportunity wage available to workers.
C)Effect on the total wage bill of hiring additional workers.

Question 17

The marginal wage is measured by

A)The percentage change in wages divided by the percentage change in the quantity of labor employed.
B)Total wages paid divided by the quantity of labor employed.
C)The change in total wages paid divided by the change in the quantity of labor employed.

Question 18

Workers who organize themselves along industry lines are represented by

A)Skill unions.
B)Industrial unions.
C)Manufacturing unions.

Question 19

Walmart,the largest employer in the United States,employs

A)Approximately 2 percent of the labor force.
B)Less than 1 percent of the labor force.
C)More than 15 percent of the labor force.

Question 20

Typical goals of a labor union in the United States include

A)Higher profit,higher output,and greater productivity.
B)Higher wages,better working conditions,and more nonwage compensation.
C)More vacation time,higher profit,and more flexible workplace rules.

Question 21

The United Farm Workers have been unsuccessful for decades in their attempts to organize California's strawberry pickers because the workers

A)Know that replacement workers are readily available.
B)Don't care about earning higher wages.
C)Don't understand English.

Question 22

Union shops are subject to potential competition

A)Because some union shop workers refuse to join the union.
B)From replacement or substitute workers.
C)Since most union members do not take strikes seriously.

Question 23

To be successful in changing wage rates and employment conditions,labor unions need to have control over only

A)Their own members.
B)The labor supply decisions of individual workers.
C)The MRP of employers.

Question 24

The old industrial unions are being supplanted by

A)Public service unions.
B)Craft unions.
C)Union shops.

Question 25

If 10 workers will be hired by a firm at a wage rate of $15 per hour,but the 11^th worker will be hired only if the wage rate falls to $14 per hour,then the marginal wage of the 11^th worker is

A)$4 per hour.
B)$14 per hour.
C)$154 per hour.

Question 26

The current unionization rate for the U.S.labor force

A)Has been rising since the mid-1950s.
B)Reflects the relative decline in U.S.manufacturing.
C)Is above 20 percent.

Question 27

The unionization ratio grew most rapidly in the United States between

A)1950 and 1953.
B)1980 and 1988.
C)1935 and 1945.

Question 28

In the last 10 years,private union membership has

A)Decreased,while public union membership has increased.
B)Increased along with public union membership.
C)Decreased along with public union membership.

Question 29

If the sellers of labor in a competitive market decided to unionize,ceteris paribus,then wages would

A)Rise and employment would fall.
B)Fall and employment would fall.
C)Rise and employment would rise.

Question 30

A monopsony

A)Is a market in which there is a single buyer.
B)Is a market in which there is a single seller.
C)Occurs when sellers have declining long-run average costs.

Question 31

The unionization ratio represents the

A)Percentage of the total labor force belonging to unions.
B)Market power of unions relative to the market power of nonunion labor.
C)Proportion of industries that are dominated by unions.

Question 32

With a union,the total number of workers hired is where

A)Employment is lower than at the competitive equilibrium.
B)The marginal wage is negative.
C)Employment and wages are both at the maximum possible levels.

Question 33

The percentage of the labor force that belongs to a union is known as the

A)Union share ratio.
B)Unionization ratio.
C)Union participation ratio.

Question 34

Over the last 10 years in the United States,the private sector unionization rate has ______ and the public sector unionization rate has _______.

A)fallen;fallen
B)fallen;risen
C)risen;fallen

Question 35

A workplace that requires workers to become union members within 30 days of being hired by a firm is

A)A craft union.
B)An industrial union.
C)A union shop.

Question 36

If a firm hires 12 workers at $9 per hour each and the 13^th worker will be hired only if the wage rate falls to $8 per hour,the marginal wage rate must be

A)-$8.
B)$8.
C)-$4.

Question 37

If a firm hires 10 workers at $6 per hour each and the 11^th worker will be hired only if the wage rate falls to $5 per hour,the marginal wage rate must be

A)-$5.
B)$5.
C)-$5.50.

Question 38

Public sector unionization in the United States is currently closest to ________ percent.

A)36
B)23
C)8.2

Question 39

From a union's perspective,the optimal level of employment is determined by the intersection of the

A)Labor demand curve and the labor supply curve.
B)Marginal wage curve and the labor supply curve.
C)Labor demand curve and the marginal wage curve.

Question 40

Suppose a union collects dues at 1 percent of the total wage bill.Maximum dues (and maximum total labor cost)would be achieved by hiring the amount of labor where

A)The supply curve intersects the marginal wage curve.
B)The marginal wage is zero.
C)The factor demand curve intersects the factor supply curve.

Question 41

Collective bargaining

A)Involves direct negotiations between labor unions and employers.
B)Takes place when unions compete to see who should represent workers in a given industry.
C)Occurs when employers determine which union should represent their workers.

Question 42

The marginal factor cost for labor is

A)The net cost to a monopsonist of hiring an additional unit of labor.
B)The net gain to a monopolist seller of labor if an additional unit of labor is hired.
C)The demand for labor.

Question 43

An oligopsony exists if

A)Only a few firms produce most of the industry's output.
B)Only a few firms account for most of the industry's employment.
C)Only one firm accounts for most of the industry's employment.

Question 44

If there are many employers in a market and each has limited market power,the demand for labor is likely to be characterized as

A)Competitive.
B)Monopsonistic.
C)Oligopolistic.

Question 45

The wage rate that a monopsonist would find most profitable is the wage

A)At the intersection of the marginal wage curve and the marginal cost curve.
B)On the labor supply curve corresponding to the level of employment at which the marginal factor cost curve (for labor)intersects the labor demand curve.
C)On the labor demand curve corresponding to the level of employment at which the marginal factor cost equals market supply.

Question 46

From an economic perspective,the efforts of professional football,baseball,and basketball players in the United States to win the right to become free agents was really an effort to

A)Raise wages to the level of the players' MRP.
B)Raise wages to competitive levels.
C)Reduce the supply of professional players and thus increase wages.

Question 47

The marginal factor cost for a buyer with market power is

A)Above the marginal revenue product curve.
B)Above the wage rate paid by a monopsonist.
C)Below the labor supply curve.

Question 48

If the marginal factor cost is less than labor demand,a monopsonist should

A)Reduce the wage rate.
B)Hire additional workers.
C)Increase the wage rate.

Question 49

Suppose a monopsonist must pay $10 per hour to attract 10 workers.If the same monopsonist must raise its wage to $11 per hour to attract the 11^th worker,what is its marginal factor cost for labor?

A)$121 per hour.
B)$21 per hour.
C)$11 per hour.

Question 50

In a bilateral monopoly,wages and employment are determined by

A)Negotiation.
B)The intersection of market supply and demand.
C)The intersection of marginal cost and marginal revenue product.

Question 51

When management shuts down a plant and does not allow workers to perform their jobs,there is a

A)Walkout.
B)Lockout.
C)Strike.

Question 52

A monopsonist must pay a higher net wage rate to hire additional workers because as a single

A)Seller,it has market power.
B)Seller,it does not have to compete with other firms for customers.
C)Buyer in the market,it faces an upward-sloping supply curve for labor.

Question 53

The distinguishing characteristic of labor market monopsonies is the fact that

A)They can hire any number of workers they want without affecting the market wage.
B)Their hiring decisions directly affect the market wage rate.
C)They can pay any wage they want for the number of workers they need.

Question 54

In equilibrium,the monopsonist's labor demand will

A)Exceed labor supply.
B)Be greater than the marginal factor cost.
C)Equal labor supply.

Question 55

A market that experiences both strikes and lockouts at different times is most likely characterized by

A)Monopoly.
B)Monopsony.
C)Bilateral monopoly.

Question 56

A market with one buyer and one seller is a

A)Bilateral monopsony.
B)Multiopoly.
C)Bilateral monopoly.

Question 57

A profit-maximizing monopsonist will hire the quantity of labor where

A)MRP equals the wage rate.
B)MRP equals zero.
C)MRP equals MFC.

Question 58

Suppose a firm finds that it must raise wages for all of its workers every time it tries to expand its workforce.This means

A)It will produce more than it would in a competitive labor market.
B)The marginal factor cost curve is below the average cost of labor curve.
C)The firm has market power.

Question 59

When only one buyer has access to a particular labor market,

A)A monopoly exists.
B)There is no seller concentration.
C)A monopsony exists.

Question 60

Compared with a competitive market,a monopsonist will pay a ________ wage and hire ________ workers.

A)higher;fewer
B)higher;more
C)lower;fewer

Question 61

The labor share of total income is the proportion of total income earned by

A)The unionized workforce.
B)The nonunionized workforce.
C)All workers.

Question 62

The decline in unionization can be explained by all of the following except

A)Increased worldwide investment barriers.
B)Increased global competition.
C)Downsizing of major corporations.

Question 63

When a strike or a lockout occurs,

A)Only labor suffers.
B)Both labor and management suffer.
C)Only management suffers.

Question 64

In Figure 31.2,what is the difference between the marginal revenue product of the last worker hired by the monopsonist and the wages the monopsonist pays the last worker?

A)$3 per hour.
B)$5 per hour.
C)$4 per hour.

Question 65

Refer to Figure 31.2.What is the competitive level of wages and employment?

A)$11 per hour and 50 workers.
B)$9 per hour and 40 workers.
C)$7 per hour and 50 workers.

Question 66

The effect of union exclusion of nonunion workers is to

A)Increase the shortages of nonunion workers.
B)Reduce the wages of nonunion workers.
C)Increase the number of jobs for nonunion workers.

Question 67

Refer to Figure 31.3 for a competitive labor market. A shift in labor supply from S₁ to S₂ could be caused by:.

A)An increase in the wage rate.
B)The unionization of another labor market.
C)An increase in the price of the product being produced.

Question 68

Productivity is

A)The inverse of cost efficiency.
B)Output per unit of input.
C)The increment of output produced when one more unit of an input is employed in the production process.

Question 69

Table 31.1 shows the number of workers a firm is willing to hire per hour at different wage rates.Complete the table by computing the total wage bill (total labor cost)and the marginal wage.Assume the union collects dues of 1 percent of the total wage bill.At what wage in Table 31.1 would the union maximize the amount of dues it collects?

A)$10 per hour.
B)$14 per hour.
C)$18 per hour.

Question 70

Union work rules may restrict productivity in all of the following ways except

A)Limiting the pace of production.
B)Restricting the types of jobs a particular individual can do.
C)Requiring a maximum number of workers for a certain task.

Question 71

Unions may lower real wages in the nonunion sector because

A)Nonunion firms have difficulty attracting skilled workers away from the unions.
B)Nonunion firms adjust wages to avoid the threat of unionization.
C)Workers who are displaced by higher wages in the unionized sector increase the labor supply in the nonunion sector.

Question 72

Table 31.1 shows the number of workers a firm is willing to hire per hour at different wage rates.Complete the table by computing the total wage bill (total labor cost)and the marginal wage.Which of the following wages,in Table 31.1,would allow the most workers to be hired?

A)$10 per hour.
B)$14 per hour.
C)$18 per hour.

Question 73

One World View table titled "Union Membership" shows the unionization rates for several countries including the United States.The decline in the U.S.unionization rate is the result of

A)A relative decline in manufacturing.
B)A relative decline in service industries.
C)The growth of large firms relative to small firms.

Question 74

A firm that attempts to pass along the cost of higher union wages to consumers in the form of higher prices will be more successful if the price elasticity of demand for its product is

A)Inelastic.
B)Elastic.
C)Unitary.

Question 75

The trend in the United States toward the merger of unions is driven by the labor movement's desire to accomplish all of the following except

A)Increase representation.
B)Avoid low-wage workers in service industries.
C)Gain financial strength.

Question 76

Management's power in collective bargaining sessions rests on

A)The company's stock valuation.
B)The ability to lock out workers by closing stores or factories.
C)The ability to fire nonunionized workers.

Question 77

What is the difference between the competitive level of employment and the union optimum level of employment in Figure 31.1?

A)22 workers.
B)6 workers.
C)3 workers.

Question 78

The exercise of union power will tend to

A)Reduce the supply of labor available to nonunion industries.
B)Cause profits to be higher in unionized industries.
C)Increase the supply of labor available to nonunion industries.

Question 79

Relative to nonunion wages,one reason union wages are

A)Higher is because unions are more likely in capital-intensive industries where wages tend to be higher.
B)Lower is because unions exclude workers from the market,which hurts their ability to raise wages.
C)Higher is because unions have workers that contribute more to society.

Question 80

What are the competitive equilibrium wage and employment level in Figure 31.1?

A)$8;10 workers.
B)$5;16 workers.
C)$4;13 workers.