ch 13
t/f:Human capital investment refers to spending on education and worker training.
true
t/f:Piece-rates may not be appropriate pay in some situations because they might reduce product quality.
true
t/f:Shirking refers to the behavior of workers who provide less-than-expected effort on the job.
true
t/f:The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.
true
t/f:The principal-agent problem in labor markets arises because of the possibility of shirking by workers.
true
supply curve for labor slopes ________ in a purely competitive labor market because as a group must pay higher wage rates to obtain more workers
upward
The productivity and real wages of workers in the industrially advanced economies have risen historically partly because:
workers have been able to use larger quantities of capital equipment.
monopsony
(economics) a market in which goods or services are offered by several sellers but there is only one buyer
A union may increase the demand for the services of its constituents by all of the tactics below except: A) successfully increasing labor productivity. B) lobbying for increases in public expenditures on the product it is producing. C) successfully advertising the product it is producing to private consumers. D) increasing the price of products that are complements for the one it is producing.
D
T/F A monopsonistic employer will pay workers a wage rate equal to their MRP.
F
In a monopsonistic labor market the employer will maximize profits by employing workers up to that point at which
MRP = MRC
bilateral monopoly
Market with only one seller and one buyer
inclusive unionism
The practice of a labor union of including as members all workers employed in an industry
exclusive unionism
The practice of a labor union of restricting the supply of skilled union labor to increase the wages received by union members; the policies typically employed by a craft union
the outcome in a monopsony labor market is shown by
W<MRP ; W<MRC
A profit-maximizing firm will: A) expand employment if marginal revenue product exceeds marginal resource cost. B) reduce employment if marginal revenue product exceeds marginal resource cost. C) expand employment if marginal revenue product equals marginal resource cost. D) reduce employment if marginal revenue product equals marginal resource cost.
a
If a firm faces an upsloping labor supply curve (and there is no union or minimum wage), its: A) MRC curve is also upsloping. C) MRP curve is perfectly inelastic. B) MRC curve is perfectly elastic. D) MRP curve is also uploping.
a
Other things equal, the monopsonistic employer will pay a: A) lower wage rate and hire fewer workers than will a purely competitive employer. B) higher wage rate but hire fewer workers than will a purely competitive employer. C) lower wage rate but hire a larger number of workers than will a purely competitive employer. D) higher wage rate and hire a larger number of workers than will a purely competitive employer.
a
A craft union attempts to increase wage rates by: A) equating the MRP and the MRC curves. C) shifting the labor supply curve to the right. B) shifting the labor supply curve to the left. D) shifting the MRP curve to the right.
b
A monopsonist's wage cost in hiring an additional worker is the: A) worker's wage rate. B) worker's wage rate plus the wage increases paid to all workers already employed. C) worker's wage rate adjusted for the lower price that must be charged for the extra output. D) marginal wage cost less the wage rate.
b
Labor unions may attempt to raise wage rates by: A) increasing the supply of labor. B) forcing employers, under the threat of a strike, to pay above-equilibrium wage rates. C) decreasing the demand for labor. D) increasing the price of complementary resources.
b
If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as: A) a cartel. B) countervailing power. C) a bilateral monopoly. D) an internal labor market.
bilateral monopoly
when a monopsonistic employer bargains with an inclusive union.
bilateral monopoly
t/f : Marginal resource (labor) cost will always exceed the wage rate when the employer is selling its product in an imperfectly competitive market.
false
t/f: Efficiency wages are determined at below-equilibrium levels
false
t/f: The rising general level of real wages in the United States has occurred because growing population has increased the supply of labor relative to the demand for it.
false
t/f:Noncompeting groups of workers are the result of geographic immobilities.
false
t/f:Seniority pay is the same as piece rate pay.
false
t/f:The labor supply curve of a purely competitive firm is perfectly inelastic.
false
t/f:ndustrial unions are more likely to increase wage rates by restricting the supply of labor than are craft unions.
false
vacation insurance and pensions are all examples of
fringe benefits
The labor supply curve for a particular occupation is upsloping because:
higher wages will be needed to attract workers from other occupations.
The labor supply curve facing a purely competitive employer is __________ whereas the labor supply curve facing a monopsonist is ___________.
horizontal, upwards sloping
he United Mine Workers is a good illustration of what type of unionism?
inclusive
If an industrial union is formed to bargain with a monopsonistic employer, then in this labor market employment may either .... to employment
increase or decrease
productivity of US labor has _____ over the long run causing demand to shift ______ more rapidly then increasing the supply of labor.
increased, rightward
Labor unions are restrained in their wage demands because the labor demand curve
is downsloping
In a labor market characterized by bilateral monopoly the wage rate will be
logically indeterminant
amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource.
marginal resource cost
increase in total revenue resulting from the hire of one more unit of labor
marginal revenue product
purely competitive labor markets maximize profits and minimize losses when
marginal revenue product = marginal resource cost
A large hospital in a relatively small city finds that, if its demand for nurses increases, the wages of nurses will rise. We can say that the hospital is
monopsonist
the wage rate paid by the employer varies directly with the number of workers employed
monopsony
the top triangle and bottom retangle represent
non labor costs and total wage costs
when producers add more real output per hour then the ________ is available to distribute
nonreal income
The market supply curve for labor is upsloping because
of the opportunity cost of labor in housekeeping, leisure, or alternative employments.
what are top reason for high productivity? 4
plentiful capital, access to abundant resources, advanced technology, and labor quality
the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic if a firm is hiring in a...
purely competitive firm
MRP = Wage Rate.
purely competitive labor market
many firms compete in hiring specific types of labor, numerous equally qualified workers supply that labor and no one controls market wage
purely competitive labor market
goods and services worker can purchase with his nominal wage : purchasing power
real wage
over long periods of time productivity and real wages tend to
rise together
T/F n imperfectly competitive seller will pay workers a wage rate equal to their MRP.
t
T?F A purely competitive seller will pay workers a wage rate equal to their MRP.
t
tot determine a firms total revenue from employing number of labor units we sum up.....
the MRP's of those units
marginal productivity theory of income distribution
the theory that the distribution of income is determined by the marginal productivity of the factors of production that individuals own
T/F Other things equal, a monopsonist will pay a lower wage rate than will a firm hiring labor competitively.
true
T/f Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hire of labor.
true
t/f :A monopsonistic employer may sell its product in a competitive market.
true
t/f: Advocates of the minimum wage argue that its effects should be analyzed within the context of a dynamic and imperfectly competitive labor market.
true
t/f: Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers.
true
monopsony is a wage....
maker
demand curve slopes ______ because of ______
down , law of diminishing returns
T?F monopsony is common in the US
f
craft unions only support workers that
have a particular skill
the money received by workers per unit of time (per hour)
nominal wage
Occupational licensing has much the same effect as:
exclusive unionism
A firm hiring labor in a perfectly competitive labor market faces a horizontal labor supply curve and
downward sloping labor demand curve.
A monopsonistic employer in an unorganized (nonunion) labor market will: A) pay a wage rate less than labor's MRP. B) pay the same wage rate but hire fewer workers than if the market was purely competitive. C) hire the number of workers indicated by the intersection of the MRC and the labor supply curves. D) pay a wage rate in excess of labor's MRP. As compared to a purely competitive labor market, in a nonunionized monopsonistic labor market wages: A) and employment will both be lower. C) will be lower, but employment will be higher. B) will be higher, but employment will be lower. D) and employment will both be higher.
both a
Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode, New Mexico. Also, suppose that this labor force is highly immobile. Economists would describe this employer as a: A) monopolist. B) oligopolist. C) monopsonist. D) monopolistic competitor.
c
Inclusive unionism is practiced mostly by: A) professional and semiprofessional employees. B) small unions comprised of skilled workers, such as the bricklayers. C) industrial unions. D) craft unions.
c
Occupational licensing: A) functions essentially the same as inclusive unionism. B) attracts large numbers of workers and therefore depresses wages. C) often restricts occupational entry and raises the incomes of licensees. D) has been declared illegal in the majority of states.
c
Which of the following is most likely to be an example of monopsony? A) the market for fast-food workers in a large summer resort town B) the market for card dealers in Las Vegas. C) the market for major league baseball umpires. D) the market for retail sales clerks in a major city.
c
Which of the following unions best represents the exclusive unionism model? A) the mine workers B) the teamsters C) the carpenters D) the steelworkers
c
uppose the MRP of a firm's twelfth worker is $22 and the worker's marginal wage cost is $16. We can say with certainty that the firm: A) is hiring labor in a competitive labor market at a wage rate of $16. B) is hiring labor in a monopsonistic labor market. C) will find it profitable to hire fewer workers. D) will find it profitable to hire more workers.
d
Exclusive unionism attempts to increase wage rates by:
decreasing supply of labor
intersection of labor _______ and ______ determine the equilibrium wage rate and level of employment in a purely competitive labor market.
demand and supply
Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they do this is to increase...
demand of construction workers
