MICROECONOMICS CH 17

firms that want to hire worker must pay __ wage rates to attract them away from the alternative job opportunities available to them.

higher

to induce people who are not currently in the labor force to seek employment, employers must pay

higher wages

in a purely competitive labor market

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

as is true of monopoly power,

there are various degreesof monopsony power

by altering the price of other direct or indirect production inputs, unions increase the demand for ___

union labor

when a firm hires most of the available supply of a certain type of labor, its decision to employ more or fewer workers

affects the wage rate it pays to those workers

in a purely competitve labor market, ____. therefore, a firm earns ____ that covers all of its operating costs.

total costs equals total revenue; only a normal profit

which best describes the effect of unions on monopsonist labor markets?

unions cause firms to negotiate wages

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

summing

which explains the effects on equilibrium wage and labor if an industrial union is formed?

- a higher above equilibrium wage rate -a perfectly elastic labor supply

market imperfection is ___

-one of four reasons why supply and demand conditions differ in various labor markets -impedes workers from moving from lower paying jobs to higher

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

-reduction of child labor -encouraging compulsory retirement -enforcing a shorter workweek -restriction of permanent immigration

which are ways that labor services are provided?

-workers compete with one another in selling theirservices. -workers unionize and sell their labor services collectively

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

T/F:: unions can boost the wage rates by reducing the demand for labor

FALSE ( its by reducing the SUPPLY of labor)

a firm in a purely competitive labor market maximizes its profite by hiring workers to the point at which its wage rate or ___ equals ___.

MRC; MRP

___ refers to the result of pressuring federal, state and local government to pass legislation that results in prohibitions on practicing a trade without meeting certain requirements.

Occupational Licensing

T/F:: use of the "demand enhancement model" occurs when a union attempts to increase the wage rate of its members by either increasing demand for the products the union helps to produce or altering the prices paid for needed related inputs.

TRUE

monopsony

a market structure in which a single firm has substantial buying (hiring) power

many qualified workers with identical skills supply a specific type of labor in which kind of market?

a purely competitive labor market

how do unions increase wage rates?

by pursuing the Demand-Enhancement Model, the Craft Union Model, or the Industrial Union Model

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

craft union

when unions artificially restrict the supply of labor, this is referred to as ___ or ___ unionism

craft; exclusive

when unions employ the inclusive or industrial model to expand union membership and firms agree to union demands, the quantity of output ___, wages ___ and a ___ will occur if the firm attempts to offer a lower wage rate.

decreases; increases; strike

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

a firm's non-labor costs include its __ and implicit payments for land, capital, and entrepreneuship

explicit

in a purely competitve labor market, individual ___ and ___ are wage takers, because neither can exert any control over the market wage rate.

firms; workers

the monopsonist maximizes profit by ___ and therefore paying less-than-competitive wage rate

hiring fewer workers

unions seek to __ their labor by supporting policies that will reduce or hold down the price of a complementary resource

increase the demand for labor

when unions attempt to use the inclusive or industrial union model to grow membership, it has the effect of ___ the wage rate and making the supply labor perfectly ___.

increasing; elastic

when a monopsonist pays a higher wage to attract an additional worker,

it must pay that higher wage to ALL the workers it is currently employing at a lower wage.

what occurs when a union is formed in an otherwise competitive labor market?

it usually baragains with relatively large number of employers to raise wage rates

the monopsonist's supply curve is also:

its average cost of labor curve

a labor-market monopsonist is a single buyer of a particular type of __ that is immobile, and it is a wage maker.

labor

a union that raises wage rates by attempting to gain control over a firms total ___ supply and threatens to withhold labor via a strike is using the ___ Union model.

labor; inclusive

a monopsony is a wage ___ because the wage rate it must pay varies directly with the number of workers it employs

maker

a firms total revenue from employing a particular number of labor units is determined by summing ___ of those units

marginal revenue product

economists have found evidence that ___ power exsists in professional sports, especially for first year players by leagues using a draft system

monopsony

in a purely competitive labor market,

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

in pure monopsony, hiring power is at its maximum because ___ hire(s) labor in the labor market

only a single employer

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

political lobbying

every firm will maximize its profits or minimize its losses by hiring a specific type of labor, up to the point where the marginal revenue __, is equal to the marginal ___ cost.

product; resource (MRP;MRC)

many firms without any control market wages compete against other firms to hire a specific type of labor. this is known as a(n)

purely competitve labor market

one of the characterisitcs of the particular type of labor that monospony hires is that it is

relatively immobile, either geographically or because workers would have to acquire new skills

craft unions have frequently forced employers to agree to hire only union members, thereby gaining virtually complete control of the labor ___.

supply

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

supply; higher

occupational licensing is a form of craft union model which often leads to policies:

that serve only to restrict entry to the occupation and reduce labor supply

why does marginal resource cost exceed the wage rate for a monosponist?

the monopsonist is the only employer in the labor market and must pay an ever-increasing wage rate to attract more workers.

when unions are successful in raising wages:

they also reduce employment in unionized firms

which is a BELIEF of most labor unions?

they believe their ability to influence the demand for labor is limited

the most important GOAL of labor unions?

to raise wage rates

a monopsonist's supply curve is ___ -sloping becasue as it attempts to hire and attract more workers, it must pay ___ wage rates.

upward; higher

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

a firm's decision to employ more or fewer workers affects the wage rate it pays those worker:

when a firm hires most of the available supply of a particular type of labor