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17-81
Topic:
Wage Differentials
154. (Consider This) The story about artist Pablo Picasso illustrates the point that
A. the demand for labor is a derived demand.
155. (Consider This) Which of the following statements is true about the relationship between
take-home pay and fringe benefits for U.S. middle-class workers over the past several decades?
A. The ratio of take-home pay to fringe benefits has remained relatively constant.
156. (Consider This) Which of the following best explains why total compensation for U.S.
workers has increased significantly over the past several decades, but take-home pay by U.S.
workers has increased by much less?
D. Workers are receiving a much larger share of total compensation in the form of goods and
services produced by the firms that employ them.
157. (Last Word) Which of the following statements is true about occupational licensing in the
United States?
D. Occupational licensing enhances employment opportunities for poorer workers.
158. (Last Word) Occupational licensing in the United States
A. is required for a majority of jobs.
17-83
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
159. (Last Word) Regardless of the motives or public benefits of occupational licensing, the
primary effect it has on labor markets is to
A. limit or reduce the demand for labor in an industry.
160. (Last Word) Despite the fact that occupational licensing in many industries is unnecessary
for the protection of consumers, these licensing requirements are implemented or increased
because of
A. the principal-agent problem.
True / False Questions
161. Marginal resource (labor) cost will exceed the wage rate when there is imperfect
competition in the hiring of labor.
162. The rising general level of real wages in the United States has occurred because the
growing population has increased the supply of labor relative to the demand for it.
163. Marginal resource (labor) cost will always exceed the wage rate when the employer is
selling its product in an imperfectly competitive market.
164. A monopsonistic employer may sell its product in a competitive market.
165. Industrial unions are more likely to increase wage rates by restricting the supply of labor
than are craft unions.
166. The labor supply curve facing a purely competitive firm is perfectly inelastic.
167. The monopsonist in a nonunionized labor market pays a wage rate below the MRP of
labor.
17-86
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 17-03 Demonstrate how monopsony a market with a single employer can
reduce wages below competitive levels.
Test Bank: I
Topic:
Monopsony Model
168. Inclusive unions restrict the number of jobs directly by shifting the labor supply curve to
the left; exclusive unions restrict the number of jobs by imposing above-equilibrium wage rates
on the employer.
169. Critics of the minimum wage contend that higher minimums cause employers to move up
their labor demand curves, reducing employment of low-wage workers.
170. The principal-agent problem in labor markets arises because of the possibility of shirking
by workers.
17-87
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 17-08 Identify the types, benefits, and costs of pay-for-performance
plans.
Test Bank: I
Topic:
Pay for Performance
171. Efficiency wages are established at below-equilibrium levels.
172. Human capital investment refers to spending on education and worker training.
173. Noncompeting groups of workers are the result of geographic immobility.
174. Shirking refers to the behavior of workers who provide less-than-expected effort on the
job.
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175. Piece-rates may not be appropriate pay in some situations because they might reduce
product quality.
Multiple Choice Questions
176. In 2015, there were about million union members in the United States.
A. 8.4
177. In 2015, about percent of employed wage and salary workers belonged to unions.
A. 25.0
178. In 2015, the U.S. unionization rate was
A. 5.5 percent, down by nearly one-half from the rate in the mid-1950s.
179. The majority of union members in the United States belong to unions that are
A. affiliated with the United Workers of America (UWA).
17-90
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: I
Topic:
Labor Unions and Their Impacts
180. Independent unions
A. have greater combined membership than the AFL-CIO.
181. AFL-CIO stands for
D. Assembly of Factory Laborers–Committee for Industrial Opportunity.
182. Suppose in some economy there are 100 million workers; 10 million of those workers
work in retail trade, and 1 million of the retail workers belong to unions. Total union
membership in this economy is 40 million. The rate of unionization in retail trade is
D. 100 percent.
17-91
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 b i l i t y :
Keyboard Navigation
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 17-09 (Appendix) Relate who belongs to U.S. unions, the basics of
collective bargaining, and the economic effects of unions.
Test Bank: I
Topic:
Labor Unions and Their Impacts
183. Suppose in some economy there are 100 million workers; 8 million of those workers work
in retail trade, and 2 million of the retail workers belong to unions. Total union membership in
this economy is 30 million. The rate of unionization in the economy is
A. 30 percent, and the rate of unionization in retail trade in 20 percent.
184. In the United States, the rate of unionization is
A. higher in mining than in government.
185. In which of the following U.S. industries is the rate of unionization the lowest?
A. transportation
186. In which of the following U.S. industries is the rate of unionization the highest?
A. construction
187. In the United States, the rate of unionization is
A. higher for sales workers than for transportation workers.
17-93
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: I
Topic:
Labor Unions and Their Impacts
188. In which of the following U.S. occupations is the rate of unionization the highest?
D. transportation workers
189. In which of the following U.S. occupations is the rate of unionization the lowest?
A. transportation workers
190. In the United States,
A. whites have higher unionization rates than African Americans.
17-94
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 17-09 (Appendix) Relate who belongs to U.S. unions, the basics of
collective bargaining, and the economic effects of unions.
Test Bank: I
Topic:
Labor Unions and Their Impacts
191. In the United States,
D. workers in mining have higher unionization rates than workers in government.
192. Who is the most likely to be a union member in the United States?
A. a female retail trade worker
193. Since 1980, labor union membership in the United States has been
A. increasing absolutely and as a percentage of the labor force.
17-95
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D. decreasing absolutely but increasing as a percentage of the labor force.
194. U.S. union membership has declined substantially in recent years. Which of the following
is not usually cited as a causal factor?
D. Managerial opposition to unions has intensified.
195. Which of the following might be expected to increase union membership?
A. increased labor force participation by women and young people
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196. Suppose that under its collective bargaining agreement, the ABC Corporation can hire
nonunion workers, but such workers must join the union within 30 days. This agreement
embodies
A. an open shop.
197. The XYZ Corporation's collective bargaining agreement indicates that it may hire either
union or nonunion workers and that the latter are under no obligation to join the union. This
agreement embodies
D. an agency shop.
198. State right-to-work laws
A. permit employers to hire nonunion workers only if union labor is unavailable.
17-97
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 b i l i t y :
Keyboard Navigation
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 17-09 (Appendix) Relate who belongs to U.S. unions, the basics of
collective bargaining, and the economic effects of unions.
Test Bank: I
Topic:
Labor Unions and Their Impacts
199. The Overnight Construction Company has just signed a collective bargaining contract in
which it agrees that all workers it hires must be union members in good standing at the time
they are hired. This provision reflects
A. preferential hiring.
200. State right-to-work laws
A. have been enacted by over one-half of the states in the nation.
201. Under an agency shop agreement, firms can hire
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A. only union workers.
202. Suppose Steve Stone takes a job with Zemo Manufacturing, whose labor contract with its
unions has an agency shop clause (30 days). Steve
A. must join the union within 30 days.
203. Unions prefer
A. open shops to agency shops.
17-99
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Understand
Difficulty:
02 Medium
Learning Objective: 17-09 (Appendix) Relate who belongs to U.S. unions, the basics of
collective bargaining, and the economic effects of unions.
Test Bank: I
Topic:
Labor Unions and Their Impacts
204. Which of the following is illegal under federal labor law?
D. state right-to-work laws
205. In a labor dispute in which the existing contract has expired, a
A. firm can legally lock up unruly workers.
206. Which of the following bargaining tactics is illegal?
A. a lockout
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written consent of McGraw-Hill Education.
C. refusal to meet with union representatives
D. hiring strikebreakers
207. Private-sector strikes and lockouts typically end because
A. the federal government intervenes with a back-to-work order.
208. Collective bargaining occurs under a framework of rules established in the
A. Sherman Act.
