Deck 14: The Labour Market

Question 1

By saying that the demand for any category of labour is a derived demand, we mean that the demand for labour:

A) depends on the availability of other resources.
B) depends on the type of competition that the firm finds itself in.
C) depends on the consumer demand for the final product.
D) depends on the wages paid to these workers.

Answer 1

depends on the consumer demand for the final product.

Question 2

The addition to total production as a result of hiring one more employee is referred to as:

A) marginal product.
B) marginal cost.
C) marginal revenue.
D) marginal revenue product.

Answer 2

marginal product.

Question 3

The value of the marginal product is determined by:

A) multiplying the marginal cost by the marginal product.
B) multiplying the marginal product by the price of the product.
C) multiplying the marginal cost by the price of the product.
D) multiplying the marginal revenue by the price of the product.

Answer 3

multiplying the marginal product by the price of the product.

Question 4

As more workers are hired by the firm, the marginal product of each worker will eventually Begin to decline. This is a result of:

A) derived demand.
B) diminishing returns.
C) specialization.
D) diseconomies of scale.

Question 5

The marginal revenue product is determined by:

A) multiplying the marginal product by the price.
B) multiplying the marginal product by the marginal cost.
C) multiplying the marginal cost by the marginal revenue.
D) multiplying the marginal product by the marginal revenue.

Question 6

In perfect competition, a firm interested in maximizing profits will hire workers up to the point at which:

A) the law of diminishing returns sets in.
B) the wage rate is equal to the marginal cost.
C) the wage rate is equal to the value of the marginal product.
D) the value of the marginal product starts to decline.

Question 7

The firm's demand curve for a specific occupation is represented by:

A) the marginal product of each worker hired multiplied by the marginal product of the other resources that the firm purchases.
B) the marginal product of each worker hired multiplied by the marginal revenue.
C) the marginal cost of each worker hired multiplied by the wage rate.
D) the demand curve for the product multiplied by the wage rate.

Question 8

Which of the following will not cause the demand curve for labour to shift?

A) an increase in the productivity of the workers
B) a decrease in the demand for the final product
C) an increase in the price of a substitute resource
D) a decrease in the wage rate

Question 9

The demand curve for a specific occupation will shift to the right if there is:

A) an increase in the productivity of workers employed in this occupation.
B) an increase in the price of a complementary resource.
C) a decrease in the demand for the final product.
D) a decrease in the price of a substitute resource.

Question 10

A decline in the price of robots used on the assembly line in an automobile factory will:

A) shift the demand curve for cars to the left.
B) reduce the productivity of assembly-line workers.
C) shift the demand curve for assembly-line workers to the right.
D) shift the demand curve for assembly-line workers to the left.

Question 11

The quantity of labour supplied to an occupation is:

A) dependent on the resources used with this occupation.
B) independent of the wage rate.
C) greater at higher wage rates.
D) always elastic with respect to price.

Question 12

The marginal resource cost is:

A) always equal to the wage rate.
B) equal to the marginal product multiplied by the marginal cost.
C) equal to the extra cost of hiring one more worker.
D) equal to the marginal cost of the next unit produced.

Question 13

A profit-maximizing firm will hire the number of workers at the point at which:

A) the supply curve intersects the marginal resource cost curve.
B) the marginal resource cost curve intersects the marginal product curve.
C) the supply curve intersects the marginal revenue product curve.
D) the marginal resource cost curve intersects the marginal revenue product curve.

Question 14

The only cabinet company in town hires cabinet makers , this is an example of:

A) perfect competition.
B) a monopsony.
C) a monopoly.
D) derived demand.

Question 15

The total cost of 4 workers is $800 per day, if the total cost of 5 workers is $950 per day what is the marginal-resource cost of the 5 worker?

A) $200
B) $195
C) $190
D) $150

Question 16

The total cost of 4 workers is $800 per day, if the marginal-resource cost of the 5th worker is $150 per day what is the total cost of 5 workers?

A) $800
B) $750
C) $950
D) none of the above

Question 17

Which of the following statements is true?

A) If the MRP is greater than the MRC then a firm should keep the number of workers that it has.
B) If the MRP is greater than the MRC then a firm should hire more workers.
C) If the MRP is less than the MRC then a firm should hire more workers.
D) If the MRP is less than the MRC then a firm should keep the number of workers it has.

Question 18

Which of the following will increase the wage rate paid to plumbers?

A) an increase in the demand for houses
B) an increase in the supply of plumbers
C) a decrease in the demand for office complexes
D) the development of easy-to-use plastic pipe

Question 19

Wage-rate increases will reduce employment. The reduction in jobs will be the greatest when the demand for labour is:

A) unitary elastic.
B) elastic.
C) inelastic.
D) perfectly inelastic.

Question 20

Labour unions will be more successful in achieving wage increases for their members when the demand for labour is:

A) unitary elastic.
B) perfectly elastic.
C) elastic.
D) inelastic.

Question 21

Increases in the minimum wage will have the least impact on employment when the demand for Labour is:

A) inelastic.
B) unitary elastic.
C) perfectly elastic.
D) elastic.

Question 22

The demand for a certain group of workers will be more elastic:

A) the more elastic the demand for the product that the workers produce.
B) the fewer substitutes there are available for this type of worker.
C) the more people there are willing to work at this occupation.
D) the smaller the percentage of total costs that labour costs make up.

Question 23

The demand for a certain occupation will be more inelastic:

A) if there are only a few workers eligible to work at this occupation.
B) the fewer substitutes there are available for this type of worker.
C) the more elastic the demand for the product that the workers produce.
D) the greater the percentage of total costs that labour costs make up.

Question 24

In response to a wage rate increase:

A) the income effect encourages you to work more hours.
B) both the income and substitution effects encourage you to work fewer hours.
C) both the income and substitution effects encourage you to work more hours.
D) the substitution effect encourages you to work more hours.

Question 25

The imposition of a payroll tax:

A) shifts the demand curve for labour to the right.
B) shifts the supply curve for labour to the right.
C) shifts the demand curve for labour to the left.
D) shifts the supply curve for labour to the left.

Question 26

Which of the following tactics cannot be employed by labour unions to increase the demand for the workers that they represent?

A) insisting on high initiation fees for new workers who want to join the union
B) pressing the federal government to impose tariffs and quotas on imports
C) helping advertise and promote the products made by union members
D) negotiating featherbedding provisions in collective agreements

Question 27

Craft unions try to shift the supply curve for their workers to the left in order to obtain higher wages. Which of the following will not result in a shift of the supply curve to the left?

A) setting high initiation fees for new union members
B) lobbying the federal government to restrict immigration
C) compulsory retirement programs
D) negotiating featherbedding provisions

Question 28

The main technique that industrial unions use to obtain wage increases for their members is:

A) promoting the product that they produce.
B) lobbying the federal government for limits on immigration.
C) insisting on long apprenticeships.
D) threatening to go out on strike if their contract demands are not met.

Question 29

Assume that the steel workers' union is successful in obtaining a 10 percent wage increase from its employers. This wage increase will result in higher prices for steel. Employment in the steel industry will decline the least if:

A) the supply of foreign-made steel is relatively inelastic.
B) the demand for Canadian-made steel is relatively inelastic.
C) there are a large number of substitutes for steel.
D) Canadians have no preference for using Canadian-made steel over imported steel.

Question 30

Assume that the steel workers' union is successful in obtaining a 10 percent wage increase from its employers. This wage increase will result in higher prices for steel. Employment in the steel industry will decline the most if:

A) there are a large number of substitutes for steel.
B) the demand for Canadian-made steel is relatively inelastic.
C) Canadians have no preference for using Canadian-made steel over imported steel.
D) the supply of foreign-made steel is relatively inelastic.

Question 31

The labour supply is backward bending because:

A) workers, beyond a certain point, reduce the hours of work with higher pay.
B) workers are always willing to increase hours of work with higher pay.
C) workers, beyond a certain point, increase the hours of work with higher pay.
D) workers are always willing to decrease hours of work with higher pay.

Question 32

Which of the following is consistent with a positively sloped labour supply cure?

A) the substitution and income effects are indeterminate
B) the substitution effect is larger than the income effect
C) the substitution effect is smaller than the income effect
D) the substitution and income effects are equal

Question 33

Which of the following is consistent with a negatively sloped labour supply cure?

A) the substitution and income effects are equal
B) the substitution effect is larger than the income effect
C) the substitution and income effects are indeterminate
D) the substitution effect is smaller than the income effect

Question 34

Which of the following would be best described as a craft union?

A) Canadian Union of Public Employees
B) the chemical workers
C) the steel workers
D) the electricians

Question 35

Barriers that exist in the labour market help preserve wage differentials between occupations. Which of the following would not be considered a labour-market barrier?

A) unsafe working conditions
B) skill requirements
C) closed-shop union
D) lack of knowledge

Question 36

If there were no labour-market barriers, wages would still not be identical for all occupations because of:

A) differences in the elasticity of demand for each occupation.
B) differences in the union status of various occupations.
C) differences in demand and supply for each occupation.
D) differences in the attractiveness of various occupations.

Question 37

The impact of payroll taxes may be greater for small businesses than for large businesses because:

A) unionization has a large presence in small businesses.
B) payroll taxes constitute a larger portion of total taxes.
C) small business tend to be less labour intensive.
D) small businesses tend to have more high-skilled workers.

Question 38

The provincial government creates make-work projects for railway industries is referred to as:

A) conciliation.
B) closed-shop unionism.
C) featherbedding.
D) collective bargaining.

Question 39

The process whereby employees negotiate together with their employer for improvements in working conditions is referred to as:

A) certification.
B) featherbedding.
C) closed-shop unionism.
D) collective bargaining.

Question 40

The procedure whereby a union is given legal authority to bargain for employees of a company is referred to as:

A) conciliation.
B) mediation.
C) arbitration.
D) certification.

Question 41

In order to acquire certification, a union must get at least what percentage of employees to agree To union membership?

A) 75 percent
B) 65 percent
C) 50 percent
D) 55 percent

Question 42

The task of the conciliator in the Canadian labour relations scene is to:

A) decide which side to support, the union or management, in a dispute over working conditions.
B) determine the wage rates that are part of any collective agreement.
C) determine the provisions of a collective agreement when the parties are unable to agree.
D) attempt to persuade both parties to soften their positions before a strike or lockout occurs.

Question 43

All collective agreements must contain three articles according to labour-relations legislation. Which of the following articles need not be part of a collective agreement?

A) the company has full authority over the introduction of any technological changes
B) there must be no strike or lockout during the life of the collective agreement
C) the company must recognize the union as the official bargaining agent for the employees
D) the company and the union agree to settle any alleged violation of the agreement by arbitration

Question 44

All collective agreements contain three main articles, which of the following is not one of these?

A) the company and the union agree to settle any alleged violation of the agreement by arbitration
B) the company must set out an amount of vacation pay that the employee is entitled to
C) the company must recognize the union as the official bargaining agent for the employees
D) there must be no strike or lockout during the life of the collective agreement

Question 45

Insisting that an employee is a union member prior to being hired is:

A) a type of discrimination.
B) a closed shop arrangement.
C) an equalization difference.
D) none of the above

Question 46

Which of the following statements is consistent with pay equity legislation?

A) It reduces unemployment amongst women in the labour force.
B) It eliminates any type of wage differential.
C) It may reduce the incentive to train for higher-paying jobs.
D) It is usually applied the private sector before the public sector.

Question 47

An iron worker welding steel on a new high rise is paid an extra $5.50 per hour, this payment is called:

A) a wage differential.
B) a compensating wage differential.
C) a skill wage differential.
D) an equal payment.

Question 48

Which of the following provides the best explanation for wage differences between dentists and cashiers?

A) geographic barrier
B) skill or education requirement barrier
C) discrimination barrier
D) lack of information barrier

Question 49

The main difference between the collective agreement negotiation that takes place in the private sector and the public sector is:

A) the strength of the collective agreements.
B) the ability of the employer and bargaining unit to use an arbitrator.
C) the ability of the employer to pay for any improvement in working conditions.
D) the strength of the different bargaining units.

Question 50

What causes the differential between average men's and women's salaries to exist?

A) child status
B) marital status
C) seniority
D) race