Micro 17

Supporters of a minimum wage argue that it can increase wage rates without causing significant unemployment in which type of labor market?

A low-pay labor market with monopsony power

Which of the following are criticisms of the minimum wage?

An above-equilibrium minimum wage will cause employers to hire fewer workers. It is poorly targeted to reduce household poverty.

How does an industrial (inclusive) union influence wage rates?

By organizing all available workers and threatening to withhold labor via a strike

How is the market labor demand curve for a particular labor service determined?

By summing the individual labor demand curves for every firm.

______ is one of four reasons given why labor supply conditions differ in various labor markets.

Compensating differences

A union whose members possess a particular skill, such as carpentry, masonry or plumbing is what type of union?

Craft union

Unions whose members possess a particular skill such as carpentry, masonry or plumbing are known as ______ unions.

Craft, Exclusive, or Trade

Why is the supply of labor faced by an individual firm in a purely competitive labor market perfectly elastic?

Each of the many firms employs such a small fraction of the total available supply of labor that it cannot influence the wage rate.

Which of the following are components of a firm's nonlabor costs?

Entrepreneurship payments Land payments Capital payments

Each individual firm will maximize its profits or minimize losses by hiring a specific type of labor up to the point where the marginal revenue product is ______ marginal resource cost.

Equal to

The passage of which act established a federal minimum wage?

Fair Labor Standards Act

True or false: Unions can boost wage rates by reducing the demand for labor.

False

Wages are the price that employers pay to improve human capital.

False

True or false: Wage differentials refers to hourly wage rates and annual salaries differing only among firms.

False Reason: Wage differentials refers to hourly wage rates and annual salaries differing among occupations, similar workers, firms and ethnicities.

True or false: A union that raises wage rates by attempting to gain control over a firm's total labor supply and threatens to withhold labor via a strike is exhibiting the exclusive or bilateral union model.

False Reason: An inclusive union includes virtually all available workers in its membership (unskilled, semi-skilled & skilled), and can put pressure on firms to agree to wage rate demands by striking and deprive firms of their entire labor supply.

Which of the following statements is agreed upon by all economists?

Firms will not hire workers who cost more per hour than the value of their hourly output.

Which of the following statements have been used to support the minimum wage?

In a low-pay labor market with some monopsony power, the minimum wage can increase wage rates without causing significant unemployment. A higher wage might prompt firms to find more productive tasks for low-paid workers, thus raising their productivity. A higher wage may reduce labor turnover, increasing the average productivity of firm's workers.

What does a perfectly horizontal (flat) supply curve indicate in a labor supply and labor demand graph for an individual firm?

Individual firms cannot affect wage rates no matter how many or how few employees they hire.

Which of the following are methods that unions use to artificially restrict labor supply?

Limiting quantity of new members Long apprenticeships High initiation fees

______ is a reason why demand conditions differ in various labor markets.

Marginal revenue productivity

Which of the following occurs in a purely competitive labor market?

Numerous firms compete with one another to hire a specific type of labor.

_________ licensing refers to pressuring federal, state and local government to pass laws that say that some group can practice their trade only if they meet certain requirements.

Occupational, Occupation, or Professional

Which of the following is the main tool for increasing the demand for union-produced goods and services?

Political lobbying

Based on the figure given, what happens if unions can increase the current demand for union labor from D1 to D2?

Quantity of labor demanded changes from Qc to Qu Wage Rate changes from Wc to Wu

Which of the following is a policy or legislation supported by labor unions in order to reduce the supply of labor?

Restricting permanent immigration

Which of the following are all policies or legislation by which unions have, over the years, increased wage rates by reducing the supply of labor?

Restriction of permanent immigration Reduction of child labor Enforcing a shorter workweek Encouraging compulsory retirement

Which of the following union models attempts to increase the demand for union labor by raising demand for the products union members produce and or altering the prices of related inputs?

The demand-enhancement model

What occurs at point b in this graph?

The firm maximizes profits by hiring up to the point where marginal revenue product equals marginal resource cost.

What determines the equilibrium wage rate and level of employment in a purely competitive labor market?

The intersection of the market labor demand curve and the market labor supply curve

Why are unions hesitant to demand excessive increases in wage rates?

The number of union workers employed falls as wages rise.

Which of the following are features of an industrial or inclusive union model?

Threatening to withhold labor via a strike Organizing all available workers

The total or market labor demand curve for a particular labor service is found by _______ the labor demand curves of all individual firms in the industry.

adding, summing, or totaling

The following figure shows that ______ will create a higher union wage along with more jobs.

an increase in labor demand

The difference between the wage rate received by one group of workers and the wage rate received by another group of workers is called a wage ________.

differential or difference

In a purely competitive labor market, the supply of labor available to an individual firm is perfectly _______

elastic

The point at which the market labor demand curve and the market labor supply curve intersect determines the ______ wage rate and level of labor ______ in a purely competitive labor market.

equilibrium; employed

One of the criticisms of the minimum wage is that it is a poorly targeted measure for reducing ______.

household poverty

A union that raises wage rates by organizing all available workers and threatening to withhold labor via a strike is using the _____ union model.

inclusive or industrial

When unions use the "craft union model" to increase the demand for union labor, they can _____ wage rates by _____ the supply of labor.

increase; reducing

When economists use the term ________ in its broadest sense, it applies to blue and white-collar workers, professional individuals such as lawyers, professors, and dentists, as well as small business owners.

labor

A firm's nonlabor costs include implicit and explicit payments to ______.

land, capital, and entrepreneurship

A firm in a purely competitive labor market maximizes its profit by hiring workers to the point at which its wage rate equals ______.

marginal revenue product (MRP)

______ is one of four reasons given why labor demand conditions differ in various markets.

marginal revenue productivity

No current consensus exists on the employment or unemployment effects of the present level of the ______ wage.

minimum

A(n) ______ wage is the actual amount of money a worker receives for services performed by the hour, day, or year, unadjusted for inflation.

nominal

A(n) ______ is the amount of money received per hour, day, or year in return for labor services performed without any adjustment for inflation.

nominal wage

Legislation that prohibits workers from practicing a given trade before meeting certain requirements is known as ______.

occupational licensing

The supply curve for each type of labor slopes upward, which indicates that employers as a group must ______ to obtain more workers.

pay higher wage rates

The primary tool used by unions to increase the use of union-produced goods and services is ________ lobbying.

political or politics

Every firm will maximize its profits or minimize its losses by hiring up to the point at which marginal revenue ______ is equal to the marginal ______ cost.

product ; resource

In a(n) ______ labor market, many firms compete with one another to hire a specific type of labor.

purely competitive

The ______ wage is the quantity of goods and services a worker can obtain from nominal wages.

real

The _______ wage is the quantity of goods and services a worker can obtain from nominal wages.

real

The quantity of goods and services a worker can obtain with nominal wages is referred to as the ______.

real wage

When unions are successful in raising wages, they also ______.

reduce employment in unionized firms

Through long apprenticeships, very high initiation fees and limits on the number of new members admitted, unions artificially ______.

restrict labor supply

In a purely competitive labor market, total cost (wages plus other income payments) equals total _________ . Therefore, a firm earns only a(n) ________ profit.

revenue ; normal

In a purely competitive labor market, each firm employs such a ______ fraction of the total available supply of a specific type of labor that no firm can influence the ______.

small; wage rate

Compensating differences is a reason why ______ conditions differ in various labor markets.

supply

The ______ curve for each type of labor slopes upward, indicating that employers as a group must pay higher wage rates to obtain more workers.

supply

In a purely competitive labor market,

the supply of labor faced by an individual firm is perfectly elastic.

In a purely competitive labor market, total costs equal ______. Therefore, a firm earns a(n) ______ profit.

total revenue; normal

True or false: In the "demand enhancement model," a union attempts to increase the wage rate of its members either by increasing demand for the products the union helps to produce or by altering the prices paid for inputs.

true

In some labor markets, workers _______ and sell their labor services collectively.

unionize or union

A firm in a purely competitive labor market maximizes its profit by hiring workers to the point at which its _______ rate or MRC equal MRP

wage

In a purely competitive labor market, each firm employs such a small fraction of the total available supply of a specific type of labor that no single firm can influence the _____ rate.

wage

The term ______ (one word) refers to the price that employers pay for labor

wage or wages