ECON 2306 Chapter 28 and 29 Practice Test

Which of the following is False regarding the general rule for hiring?

If any firm hired fewer workers over time, profits would definitely increase at the firm.

For the past several decades, union membership in the United States has been declining. What has been happening in the rest of the world?

In most cases, union membership in other nations has also been falling

If the price of gold balls increase, what will likely happen to the demand for golf club manufacturing employees?

It will increase

Evidence in the support of the hypothesis that unions increase the productivity of union worker is

that unionized firms face lower turnover rates than nonunion firms do.

Recently, two construction industry unions also left the AFL-CIO and joined with ironworkers and bricklayers union to form

the National Construction Alliance.

Marginal factor cost is

the change in total costs due to a one-unit increase in the variable input.

When is comes to productivity, some economists argue that

unions have caused a decrease in productivity by excessive staffing and make work requirements

The supply of labor to an industry will decrease when

workers receive better employment opportunities in other industries.

If a union sets the wage rate to maximize the total wage receipts of its member, the marginal revenue would be

zero

We assume that when a firm hires additional workers, the marginal physical product of labor will

decrease because each worker now has less capital and other resources to work with.

To reduce labor surplus above the equilibrium union wage level, a union may do all of the following EXCEPT a. lengthen apprenticeship period. b. assign jobs based on seniority. c. limit the number of new members accepted. d. encourage nonunion members to join the union.

encourage nonunion members to join the union.

The attempt to force employers to use more labor than they otherwise would, of to force employers to use labor inefficiently, is known as

featherbedding

Unions face a trade-off between higher wages and

fewer available positions.

Suppose at the current level of labor used, MRP=$100 and MFC=$50. To maximize profits, the firm should

hire more labor

A decrease in the supply of labor could be caused by

increase wage rate in another industry

When a group of workers forms a union, they introduce an element of

monopoly into the labor market.

What is it called when than price paid for a variable input is less than its marginal revenue product?

monopsonistic exploitation

When there is only one buyer of labor in a community, we talk of a

monopsony

At the profit-maximizing level of employment, the monopsonist

pays a wage less than MRP

Featherbedding is the term for

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

The ultimate bargaining tool for unions is

"labor's Magna Carta"

Which of the following is NOT one of the reasons for declining union membership in the United Staes? a. The economy has shifted away from manufacturing. b. The AFL-CIO merger and creation of the Change to Win Federation reduced competition among unions. c. Some industries have been deregulated. d. Labor force participation by women has increased

The AFL-CIO merger and creation of the Change to Win Federation reduced competition among unions

Which of the following will NOT shift MRP curve for labor?

a change in the wage rate in the market

Coal and iron ore are complements in the manufacture of steel. An increase in the price of coal would lead to

a decrease in the demand for iron ore as steel manufactures reduce production of steel.

A disagreement involving two or more unions over which should have control over a particular firm of industry is

a jurisdictional dispute.

A fall in the price of the final product produced by a firm will cause

a reduction in demand for an input used to produce the final product.

An industrial union is

a union composed of worker who are employed in a particular industry.