ECON-2302 Ch 28 Study questions

Ch 28 21. In the above table, what is the marginal factor cost of the 4th worker? A) $22 B) $30 C) $16 D) $64

$22

Ch 28 13. When there is only one buyer of labor in a community, we talk of a A) monopolistic market. B) labor cooperative. C) monopoly. D) monopsony.

monopsony

Ch 28 14. A company town in the lumber or mining industry in an example of a A) monopoly. B) monopsony. C) bilateral monopoly. D) buyer's monopoly.

monopsony

Ch 28 25. A company can hire non-union workers, but a condition of their employment is that they must join the union within their first 90 days on the job. This is an example of a A) voluntary craft union. B) right-to-work law. C) union shop. D) closed-shop.

union shop.

Ch 28 22. A monopsony has an upward sloping supply curve because A) each additional unit of labor costs less. B) diminishing marginal product to scale does not exist in a monopsony. C) when more units of labor are hired, only the new workers receive the higher wage. D) when more units of labor are hired, all laborers must receive the higher wage.

when more units of labor are hired, all laborers must receive the higher wage.

Ch 28 26. Use the above table. If the marginal revenue product is $30, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker? A) 4; $25 B) 1; $10 C) 3; $20 D) 2; $15

3; $20

Ch 28 4. All of the following are true regarding the current status of labor unions EXCEPT A) the deregulation of certain industries has also contributed to a decline in unionism. B) recent labor laws have diminished worker's rights. C) organized labor's heyday occurred from the 1940s through the 1970s. D) part of the explanation for the decline in union membership has to do with the shift away from manufacturing

recent labor laws have diminished worker's rights

Ch 28 11. A primary objective of labor unions is to A) seek better pay and improved work conditions. B) secure equal pay for its members. C) have equal power with their employer. D) all of the above E) none of the above

seek better pay and improved work conditions

Ch 28 5. If a union negotiates and obtains a wage rate above the competitive product market to increase wages above the equilibrium level, then the level of unemployment A) will increase. B) will decrease. C) may increase or decrease. D) will remain constant.

will increase

Ch 28 3. Legislation that makes it illegal to require union membership as a condition of continuing employment is the A) Congress of Industrial Organizations. B) collection of right-to-work laws. C) Wagner Act. D) National Labor Relations Act

collection of right-to-work laws

Ch 28 8. Strikes occur in about --- percent of the labor- management negotiations A) 40 B) 2 C) 16 D) 25

2

Ch 28 19. According to the above table, if the marginal revenue product is $24, how many workers will the profit maximizing monopsonist hire? A) 7 B) 6 C) 4 D) 5

4

Ch 28 20. In the table above, if the marginal revenue product is $22, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker A) 4; $16 B) 4; $22 C) 5; $18 D) 3; $14

4; $16

Ch 28 2. Which of the following is a correct statement about unions in the United States A) Half of the top ten U.S. unions now have members who work in service and government occupations. B) Since the 1960s, there has been a gradual increase in the proportion of U.S. workers who are members of unions. C) The trend away from manufacturing and the deregulation of certain industries has promoted unionization of the U.S. workforce. D) Half of all U.S. workers are union members.

Half of the top ten U.S unions now have members who work in service and government occupations

Ch 28 1. Union membership, in terms of percentage of the U.S civilian labor force A) peaked about 1960 and has since declined. B) has increased steadily since the passage of the Wagner Act. C) was over 50 percent in 1987. D) has increased dramatically since 1970.

Peaked about 1960 and has since declined

Ch 28 18. In the above figure, what is the quantity of workers that would be hired by a monopsonist A) Q1 B) Q2 C) Q4 D) Q3

Q2

Ch 28 9. The president of the united states can obtain a court injunction that will stop a strike for an 80- day cooling off period if the strike is expected to imperil national safety or health. This power is granted in the A) Taft-Hartley Act. B) Landrum-Griffin Act. C) National Industrial Recovery Act. D) Wagner Act.

Taft-Hartley Act

Ch 28 12. Refer the the above figure. If the union wants to maximize the total income of its members who work, it will set wages at A) W1 B) W2 C) W3 D) W4

W2

Ch 28 10. Collective Bargaining contracts between management and the union negotiations A) usually are settled only after a strike. B) cover wages and fringe benefits only. C) cover wages only. D) also apply to the workers who are not members of the union.

also apply to the workers who are not members of the union

Ch 28 23. Featherbedding is the term for A) the practice of trying to recruit union members among public employees. B) attempts by management to eliminate a union. C) training programs initiated by unions to make their less-skilled members more productive. D) any practice that forces employers to use more labor than they would otherwise.

any practice that forces employers to use more labor than they would otherwise.

Ch 28 27. In a monopsonistic market A) employment is higher but wages are lower than in a comparable competitive market B) both employment and wages are lower than in a comparable competitive market C) employment is lower but wages are higher than in a comparable competitive market D) both employment and wages are higher than in a comparable competitive market

both employment and wages are lower than in a comparable competitive market

Ch 28 16. A monopsonistic market A) both employment and wages are lower than in a comparable competitive market. B) employment is higher but wages are lower than in a comparable competitive market. C) both employment and wages are higher than in a comparable competitive market. D) employment is lower but wages are higher than in a comparable competitive market.

both employment and wages are lower than in a comparable competitive market

Ch 28 24. A closed shop is a A) business enterprise in which employees must belong to the union before they can be hired and must remain in the union after they are hired. B) strike by a union in sympathy with another union's strike or cause. C) dispute involving two or more unions over which should have control of a particular jurisdiction. D) legal environment in which businesses may hire nonunion members conditional on their joining the union by some specified date after employment begins.

business enterprise in which employees must belong to the union before they can be hired and must remain in the union after they are hired

Ch 28 6. If a union negotiates and obtains a wage rate above the competitive wage rate, A) unemployment will increase in the nonunion sector relative to the union sector. B) employment in the union sector will increase relative to employment in the nonunion sector. C) it must find a way to ration jobs among the excessive number of workers who wish to work in the union sector. D) it must find a way to make workers more productive

it must find a way to ration jobs among the excessive number of workers who wish to work in the union sector

Ch 28 7. One method unions use to ration available excess workers is A) collective bargaining. B) lengthy apprenticeships. C) to hire only white collar workers. D) refuse to unionize.

lengthy apprenticeships

Ch 28 17. The monopsonist will employ labor to the point at which the A) marginal revenue product equals the wage rate. B) demand equals the supply of labor. C) marginal factor cost equals the marginal revenue product of labor. D) marginal cost of output equals the marginal revenue.

marginal factor cost equals the marginal revenue product of labor

Ch 28 15. The main difference between a monopsonist and a competitive buyer of labor is that A) the competitor is a small firm while the monopsonist is a large firm. B) the competitor can hire as many workers as it wants at the going wage while a monopsonist must raise wages to hire additional workers. C) the competitor is also a competitor in product markets while the monopsonist is also a monopoly in product markets. D) the competitor can hire as many workers as it wants at the going wage while a monopsonist can force wages down when hiring additional workers.

the competitor can hire as many workers as it wants at the going wage while a monopsonist