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Test Bank: I
Topic:
Monopsony Model
Type: Graph
78.
Refer to the diagram. The MRC curve lies above the labor supply curve because
A. any number of workers can be hired at the going equilibrium wage rate.
79.
Refer to the diagram. Assuming no union or relevant minimum wage, the firm represented will
hire
A. Q2 workers and pay a W4 wage rate.
80.
Refer to the diagram. An industrial (inclusive) union could increase employment in this labor
market
D. only if it could shift the labor demand curve rightward.
17-44
81.
Refer to the diagram. An industrial union could maximize employment by negotiating a wage
rate of
A. W4.
82. Which of the following tactics is most associated with the demand-enhancement union
model?
A. reducing the price of inputs that are substitutes for union workers
17-45
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B. lobbying for increases in public expenditures on the product it is producing
C. restricting the number of workers allowed to work in the industry
D. increasing the price of products that are complements for the one it is producing
83. Inclusive unionism is practiced mostly by
A. professional and semiprofessional employees.
84.
Refer to the diagram. If this labor market is purely competitive, the wage rate and level of
employment respectively will be
A. D and E.
85.
Refer to the diagram. If this labor market is monopsonistic, the wage rate and level of
employment will be
A. B and E, respectively.
86.
Refer to the diagram. Assume that an inclusive union is formed to bargain with the
monopsonistic employer of the question. To what level can this union increase the wage rate
without causing the number of jobs to decline below that which the monopsonist would
otherwise have provided?
A. D minus A
87.
Refer to the diagram. If an inclusive union seeks to maximize the number of jobs available for
its members, what wage rate will it seek to impose on the monopsonist?
A. D minus A
88. A craft union attempts to increase wage rates by
A. equating the MRP and the MRC curves.
17-50
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written consent of McGraw-Hill Education.
D. shifting the MRP curve to the right.
89. Occupational licensing has much the same effect as
A. inclusive unionism.
90. Occupational licensing
A. functions essentially the same as inclusive unionism.
91. If an exclusive union is successful in restricting the supply of labor, the
D. demand for labor curve will shift leftward.
92. If an industrial union is formed to bargain with a monopsonistic employer, then in this labor
market,
A. the resulting wage rate will always be above the competitive level.
93. The electricians' union is a good example of
D. inclusive unionism.
17-52
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 17-04 Discuss how unions increase wage rates by pursuing the demand-
enhancement model, the craft union model, or the industrial union model.
Test Bank: I
Topic:
Three Union Models
94. Labor unions may attempt to raise wage rates by
A. increasing the supply of labor.
95. Construction workers frequently sponsor political lobbying in support of greater public
spending on highways and public buildings. One reason for this is to
A. restrict the supply of construction workers.
96. Unions often oppose increases in the prices of complementary inputs. (For example, truck
drivers may oppose increases in taxes on diesel fuel.) They do this because increases in the
prices of complementary inputs might
A. increase the supply of competing labor through the output effect.
17-53
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
C. decrease the demand for union labor through the output effect.
D. decrease the demand for union labor through the substitution effect.
97. Craft unions
A. attempt to organize workers at all skill levels in a firm or industry.
98. Labor unions are restrained in their wage demands because
A. legislation limits annual increases in nominal wages to 6 percent.
17-54
99.
A shift in union labor demand from D1 to D2 in the diagram might be the result of
A. a refusal by union members to buy the product they are producing.
100. A union might increase the demand for the labor services of its members by
A. decreasing the demand for the product it is producing.
17-55
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i bi l i t y :
Keyboard Navigation
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 17-04 Discuss how unions increase wage rates by pursuing the demand-
enhancement model, the craft union model, or the industrial union model.
Test Bank: I
Topic:
Three Union Models
101. Authoritative estimates suggest that currently union workers on the average
A. achieve no wage advantage over nonunion workers in the same occupation.
102. In a labor market characterized by bilateral monopoly, the wage rate will
D. always be established at the competitive level.
103. If a single large employer bargains with an inclusive union, the resulting labor market
model can best be described as
A. a cartel.
104. Bilateral monopoly occurs where
D. an industrial union bargains with a purely competitive employer.
105.
Refer to the labor market diagrams. A monopsonistic labor market is represented by Figure
A. 5.
17-58
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic:
Three Union Models
Type: Graph
106.
Refer to the labor market diagrams. The tactics of exclusive unionism are portrayed in Figure
A. 4.
17-59
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 17-04 Discuss how unions increase wage rates by pursuing the demand-
enhancement model, the craft union model, or the industrial union model.
Test Bank: I
Topic:
Three Union Models
Type: Graph
107.
Refer to the labor market diagrams. The tactics of inclusive unionism are shown in Figure(s)
A. 5 only.
17-60
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 17-04 Discuss how unions increase wage rates by pursuing the demand-
enhancement model, the craft union model, or the industrial union model.
Test Bank: I
Topic:
Three Union Models
Type: Graph
108.
Refer to the labor market diagrams. The case of bilateral monopoly is represented by Figure
