Question 1

The consensus among researchers is that union workers earn 15 percent more than otherwise identical nonunion workers.This means unions have probably raised wages

Accepted Answer

The consensus among researchers is that union workers earn 15 percent more than otherwise identical nonunion workers, which means that unions have raised wages by at least 15 percent. It is possible that some unions have raised wages by more than 15 percent, but the consensus is that this is the minimum amount of impact that unions have on wages.

Question 2

A monopsonist hires labor in a market with perfectly competitive supply.Whenever she hires an additional worker,

Accepted Answer

In a monopsony, the employer has market power and can negotiate wages below the competitive equilibrium wage. Therefore, if the monopsonist hires an additional worker, the supply of labor decreases, which gives the remaining workers more bargaining power. To prevent losing these workers to other employers, the monopsonist will need to raise wages to keep them. As a result, she must raise the wage paid to all workers already hired.

Question 3

A minimum wage law might increase wages without reducing employment if the hiring firm is

Accepted Answer

A monopsonist is a firm that is the sole buyer of a particular type of labor in a particular market. In this case, the minimum wage law may actually increase employment as the higher wages could incentivize more workers to apply for jobs, leading to a larger pool of potential employees for the monopsonist to choose from. Additionally, the higher wages could reduce turnover rates, saving the firm money on training costs.

Question 4

Which of the following workers would be most likely to work fewer hours as a result of a wage increase?

Accepted Answer

The answer of Which of the following workers would be...

Question 5

Figure 20-4
 
-In Figure 20-4,which panel depicts a union suffering unemployment during a recession rather than allowing the wage to fall?

Accepted Answer

Panel 2 shows a decrease in employment (represented by the gap between the labor supply and labor demand curves) and no change in the wage rate. This implies a union refusing to lower wages during a recession, resulting in increased unemployment.

Question 6

Explain how the demand for labor is determined.

Accepted Answer

The answer of Explain how the demand for labor is...

Question 7

The initial stage of the procedure in which a union and an employer negotiate over a contract is known as

Accepted Answer

The initial stage of negotiating a contract between a union and an employer is known as collective bargaining. Featherbedding refers to requiring more workers than necessary for a particular job, while mediation and arbitration are methods used when negotiations between the union and employer have reached an impasse.

Question 8

Among possible union strategies,the one that can both raise wages and add to employment is

Accepted Answer

By raising the demand curve for the product or for labor, the union can negotiate for higher wages without reducing employment, as the increased demand for labor will offset any increased labor costs. This can be done through various means such as promoting the product or service, lobbying for government policies that increase demand, or negotiating for contracts that require increased workforce. Restricting the supply of workers (A) may raise wages in the short-term, but it does not add to employment and may lead to a decrease in production. Fixing the wage (C) does not take into account changes in demand or productivity, and may also lead to a decrease in employment. Striking frequently (D) can be detrimental to both wages and employment, as it disrupts production and may lead to negative public perception of the union.

Question 9

For which of the following workers would the substitution effect be more likely to outweigh the income effect of an increase in wage?

Accepted Answer

The answer of For which of the following workers would...

Question 10

Unions have the power to

Accepted Answer

Unions can negotiate wage rates that are higher than what the market would otherwise dictate, often by threatening to strike or through collective bargaining tactics. This can push wages above competitive levels for workers within the union, providing them with higher pay and benefits than they would receive without union membership. However, this can also increase the costs of production for firms and potentially lead to lower profits. Unions do not have the power to set all working rules, increase total taxes, or nationalize a firm.

Question 11

The United States has had a long history of work time lost due to worker strikes.This trend has

Accepted Answer

According to data from the Bureau of Labor Statistics, the number of work stoppages in the United States has decreased significantly since the 1980s. In 1980, there were 187 major work stoppages involving 1,000 or more workers, resulting in the loss of 6.9 million workdays. By 2018, there were only 20 major work stoppages involving 1,000 or more workers, resulting in the loss of 485,000 workdays. Therefore, option B is the correct choice.

Question 12

Briefly and concisely define the following terms and explain their relevance to the study of economics.
a)industrial and craft unions
b)closed shop
c)union shop
d)bilateral monopoly
e)collective-bargaining agreement

Accepted Answer

The answer of Briefly and concisely define the following terms...

Question 13

In the collective bargaining process

Accepted Answer

Collective bargaining often involves heated discussions between the parties, with threats of strikes from the union and counterthreats of lockout from the employer. Supply and demand analysis may be used as a factor in determining wages, but it is not the only consideration. The contract can legally cover a wide range of issues beyond just the wage or salary, such as work hours, benefits, and working conditions. There is no set timeline for the negotiation period, although it may be subject to deadlines or timeframes set by law or agreement.

Question 14

For which of the following workers would the income effect be more likely to outweigh the substitution effect of an increase in wage?

Accepted Answer

The answer of For which of the following workers would...

Question 15

A union wants to increase its members' wages without reducing employment.Which of the following strategies might achieve that goal?

Accepted Answer

Training union members to work more productively can increase their value to employers, making it less likely that they will be laid off or have their wages reduced. This can also potentially lead to increased profits for the employer, which may make them more willing to consider wage increases. Setting a high minimum wage rate might lead to employers reducing employment to avoid paying more, and increasing the number of union members does not necessarily guarantee increased wages without reducing employment. Pushing against featherbedding is also unlikely to lead to increased wages without reducing employment.

Question 16

The term "bilateral monopoly" refers to market situations in which

Accepted Answer

Bilateral monopoly occurs when there is a monopoly on the selling side and a monopsony on the buying side, meaning that there is only one buyer and one seller in the market. This results in a bargaining power struggle between the two sides, which can lead to inefficient outcomes and market failures.

Question 17

Figure 20-4
 
-In Figure 20-4,which panel shows the impact of union efforts to have goods produced in Asia excluded from the U.S.market?

Accepted Answer

The answer of Figure 20-4
 
-In Figure 20-4,which panel shows...

Question 18

Define the following terms and explain their importance to the study of economics.
a)minimum wage law
b)income and substitution effects
c)backward-bending labor supply curve
d)human capital theory
e)dual labor markets

Accepted Answer

The answer of Define the following terms and explain their...

Question 19

When large oligopolistic firms negotiate with the unions of their employees,the resulting bargaining process closely resembles

Accepted Answer

The situation described in the question, where a large oligopolistic firm negotiates with a union, creates a situation of bilateral monopoly. This means that both the employer and the union have significant bargaining power due to their market dominance and ability to limit supply (of labor or work). In this situation, the resulting outcome of negotiations can only be determined through compromise and bargaining.

Question 20

Creative destruction by innovation means

Accepted Answer

Creative destruction by innovation refers to the process in which the introduction of new and innovative products or technologies makes older substitute goods or technologies obsolete, leading to their eventual destruction. This promotes efficiency and productivity in the market by allowing new and improved products to replace outdated ones.

Quiz 20: Labor and Entrepreneurship: The Human Inputs