Labor Market

Collective bargaining:

consists of negotiations between unions and management.

All of the following would explain a change in labor supply, EXCEPT: a decrease in productivity. an increase in population. an increase in job status or prestige. a decrease in immigration.

a decrease in productivity.

Gary Becker's theory of economic discrimination argues that:

employers that discriminate against women will lose profit opportunities.

All of the following would cause a rightward shift in the labor demand curve, EXCEPT: an increase in the demand for Chevrolets. an increase in the use of capital. a decrease in the price of other inputs. an increase in the population of Texas.

an increase in the population of Texas.

An individual's supply of labor is:

backward bending with relation to the wage rate.

Assume that the going wage for a worker at a competitive firm is $50 a day. If the marginal revenue product for the sixth worker is $45 a day, the:

firm should hire fewer than six workers.

A(n) _____ is one where workers must belong to the union before they can be hired.

closed shop

Applegate University announces that its employees can now take college courses free of charge. This change will eventually lead to a(n):

increase in labor supply

Reece Inc. has just discovered that the marginal revenue product generated by the last worker hired was $120, while the marginal factor cost was $90. What should Reece Inc. do?

increase the amount of labor hired

Benefits of union membership include all of the following, EXCEPT: collective bargaining power. flexible job descriptions. greater job security. protection from arbitrary management decisions.

flexible job descriptions

Teacher salaries are 70% of the cost of educating a sixth grader. The demand for teachers is likely to be:

inelastic

Derived demand suggests that

labor demand is derived from demand for the product it produces.

A lower elasticity of demand of a product results in a:

lower elasticity of demand for the labor that produces the product.

An increase in the demand for a firm's product will increase the:

marginal revenue product and the firm's demand for labor.

A perfectly competitive firm will hire workers up to the quantity at which the wage rate equals the:

marginal revenue product of labor.

Free health insurance offered by an employer is referred to as a(n):

nonwage benefit.

As your hourly wages increase, ceteris paribus, your __________ increases.

purchasing power

Suppose that a law passes that causes working conditions throughout the economy to improve. The labor supply curve should shift ____, and the number of workers available at any given wage rate will _____.

right; increase

An increase in the number of immigrants will shift the labor _________ curve to the __________.

supply; right

As a firm hires more workers, holding capital and other factors constant, the marginal physical product of labor declines because:

the amount of other inputs each worker has to work with declines as the number of workers increases.

If a firm employs an extra unit of labor, the additional product generated by employing the extra unit of labor can be described as:

the marginal physical product of labor.

Successful collective bargaining in the union sector causes wages:

to be lower but employment to be higher in the nonunion sector.

Competition in labor markets may fail to eliminate wage differentials because:

women continue to opt for occupations with more flexible career paths.

A firm's demand for labor is derived from the worker's demand for wages. (T/F)

False

A union raises wages for nonunion members as well as for their members within an economy. (T/F)

False

For an individual supply curve, the slope is always positive. (T/F)

False

The backward-bending supply curve is a phenomenon that describes the market, not the individual labor supply. (T/F)

False

A decrease in the price of capital will cause a decrease in the demand for labor. (T/F)

True

According to the income effect, if an employee receives higher wages, ceteris paribus, it leads to fewer hours worked. (T/F)

True

Becker believes that nondiscriminating firms will attract the best employees and earn higher profits than firms that do discriminate. (T/F)

True

When looking at the concepts of marginal revenue product (MRP) and the value of marginal product (VMP) we see that

VMP = MRP in perfectly competitive markets.

A(n) _____ is one where employees are not required to join the union, but must pay dues to compensate the union for its services.

agency shop

Factors that affect the elasticity of demand for labor include all of the following, EXCEPT:

demographics

Robotic manufacturing has made labor demand for factory workers:

more elastic.

A right-to-work state is one in which:

new employees hired by a company with union representation do not have to join the union.