Question 1

If the wage is kept above the equilibrium level because of minimum-wage laws, then the result is unemployment; if the wage is kept above the equilibrium level for some other reason, the result need not be unemployment.

Accepted Answer

The answer of If the wage is kept above the...

Question 2

The process by which unions and firms agree on the terms of employment is called collective bargaining.

Accepted Answer

Collective bargaining is the process of negotiation between unions and employers or their representatives to determine the terms and conditions of employment.

Question 3

Unemployment generated by the existence of labor unions is structural unemployment and so contributes to the natural rate of unemployment.

Accepted Answer

Structural unemployment refers to the unemployment caused by changes in the structure of the economy, such as technological advancements or changes in consumer demand. The existence of labor unions can also contribute to structural unemployment because it may cause higher wages and benefits for unionized workers, making it more difficult for unskilled or non-unionized workers to find jobs. This type of structural unemployment is considered part of the natural rate of unemployment, which includes other forms of frictional and structural unemployment that occur even in a healthy and growing economy.

Question 4

When job search is the explanation for unemployment, workers are searching for the jobs that best suit their tastes and skills, but when the wage is above the equilibrium level, the quantity of labor supplied exceeds the quantity of labor demanded, and workers are unemployed because they are waiting for jobs to open up.

Accepted Answer

This statement is true. When the wage is above the equilibrium level, employers may not be willing or able to hire as many workers as are seeking jobs, resulting in unemployment. However, when job search is the explanation for unemployment, it means that workers are actively searching for employment opportunities that match their skills and preferences.

Question 5

Unions are often thought to cause conflict between different groups of workers -- between the insiders who benefit from high union wages and the outsiders who do not get the union jobs.

Accepted Answer

Unions can create a division between unionized workers and non-unionized workers, as unionized workers are typically paid higher wages and receive better benefits than non-unionized workers. This can lead to tension and conflict between the two groups.

Question 6

If the wage is kept above the equilibrium wage for any reason, the result is structural unemployment.

Accepted Answer

Keeping the wage above the equilibrium level will lead to fewer job openings and more people looking for jobs, resulting in structural unemployment.

Question 7

If a union and a firm cannot reach an agreement on the terms of employment, then the union can organize a withdrawal of labor from the firm, called a strike.

Accepted Answer

This is correct. If a union and a firm cannot come to an agreement, the union may call for a strike, which means workers will stop working until an agreement is reached.

Question 8

The introduction of a union into a firm benefits all of that firm's workers.

Accepted Answer

While unions can lead to higher wages and better benefits for members, non-union workers might face disadvantages such as less flexibility in negotiations, potential layoffs due to increased labor costs, or exclusion from union benefits.

Question 9

A union is an employer association that bargains with workers over wages, benefits, and working conditions.

Accepted Answer

A union is an association of workers that bargains with employers over wages, benefits, and working conditions, not an employer association.

Question 10

Some of a firm's workers are made worse off by the introduction of a union.

Accepted Answer

While a union may benefit the majority of workers by negotiating better wages and working conditions, some workers who may have previously had more bargaining power or individualized arrangements with their employer may end up worse off under the new collective agreement.

Question 11

When a union raises the wage above the equilibrium level, it reduces the quantity of labor supplied and raises the quantity of labor demanded, resulting in unemployment.

Accepted Answer

When a union raises the wage above the equilibrium level, it increases the quantity of labor supplied (more people want to work at the higher wage) and decreases the quantity of labor demanded (employers want to hire fewer workers at the higher wage), potentially resulting in unemployment.

Question 12

Today, unions play a larger role in Europe than they do in the U.S.

Accepted Answer

In Europe, unions have a stronger presence and more influence on government policies compared to the United States where unions have a more limited role in influencing policy.

Question 13

U.S. Department of Labor data show that minimum-wage workers tend to be young, less educated, more likely to be working part time, and concentrated in the leisure and hospitality industry.

Accepted Answer

The U.S. Department of Labor data does show that minimum-wage workers tend to be young, less educated, more likely to be working part time, and concentrated in the leisure and hospitality industry.

Question 14

Economists have found that union workers earn about 30 to 40 percent more than similar workers who do not belong to unions.

Accepted Answer

The answer of Economists have found that union workers earn...

Question 15

A union is a type of cartel.

Accepted Answer

A union is a group of workers who come together to form a collective bargaining unit to negotiate with employers for better wages, benefits, and working conditions. Like a cartel, a union seeks to increase its bargaining power by uniting the interests of its members and demanding concessions from the other party. However, unlike a cartel, a union is usually legal and viewed as a legitimate means for workers to have a voice in the workplace.

Question 16

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Accepted Answer

A union is a group of workers who join together to bargain collectively with their employers for better wages, benefits, and working conditions. They act together as sellers of their labor in the labor market, hoping to increase their bargaining power and achieve better outcomes for themselves. This is similar to how a cartel of sellers in a product market might act together to try to increase prices or limit production.

Question 17

It is only among the least skilled and least experienced members of the labor force that minimum-wage laws cause unemployment.

Accepted Answer

Minimum-wage laws can potentially cause unemployment among the least skilled and least experienced workers, as employers may not be willing to pay them the higher minimum wage and may choose to hire more experienced and skilled workers instead. However, the overall impact of minimum-wage laws on employment is still a matter of debate among economists.

Question 18

When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand.

Accepted Answer

Unions negotiate collective bargaining agreements with employers that set wages and working conditions, regardless of the supply and demand forces in the labor market.

Question 19

If the wage is kept above the equilibrium level for any reason, the result is unemployment.

Accepted Answer

Keeping wages above the equilibrium level creates a surplus of labor, leading to unemployment as employers demand fewer workers at higher wages and workers supply more labor at higher wages.

Question 20

In the 1940s and 1950s, about one-third of U.S. workers belonged to unions, but today, only about one-fifth of U.S. workers belong to unions.

Accepted Answer

Today, less than one-tenth of U.S. workers belong to unions, indicating a more significant decline in union membership than the statement suggests.

Quiz 10: Unemployment and Its Natural Rate