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104. The trend in the United States toward the merger of unions is driven by the labor movement's desire to
accomplish all of the following except
105. One World View table titled "Union Membership" shows the unionization rates for several countries including
the United States. The decline in the U.S. unionization rate is the result of
106. An In the News article titled "A Win for the Graduate(s)" discusses how graduate teaching assistants can now
unionize. Unionization often occurs when employers
107. The In the News article titled "Free Agents in Sports: A Threat to Monopsony" states, "Individual players were
permitted to negotiate with only one team." The reserve clause in player contracts gave franchise owners in
the labor market essentially
108. An In the News article titled "Caterpillar vs. the UAW" describes collective bargaining
109. The In the News article titled "The GM-UAW Deal" states, "After months of negotiations and a 41-hour strike,
GM and the UAW signed a new four-year contract in September 2007." The contract included job
guarantees and back-to-work bonuses, but the primary objective of unions is to
A. Lower the wages of nonunion members.
110. The In the News article titled "The GM-UAW Deal" states, "After months of negotiations and a 41-hour strike,
GM and the UAW signed a new four-year contract in September 2007." What concessions, if any, did the UAW
make?
111. According to the In the News article titled "Free Agents in Sports: A Threat to Monopsony," all of the
following statements about reserve clauses and free agency in sports are true except
A. The reserve clause stated that individual players were permitted to negotiate with only one team, and
112. In the article "Walmart Shutters Quebec Store as Union Closes In," the company argued all of the following
except
113. The willingness of firms to hire labor is represented by the market labor demand curve.
114. The market labor supply curve is downward-sloping.
115. The equilibrium wage rate is the rate at which the quantity of labor demanded equals the quantity supplied.
116. A primary objective of unions is to raise the wages of union members.
117. Unlike most monopolies, unions do not attempt to use their market power to raise the equilibrium wage above
its competitive level.
118. A craft union is a labor organization that represents people with a particular skill.
119. Unions do not need to worry about the effects of greater employment numbers on the wage rate.
120. The distinction between market wages and marginal wages must be made because of the downward slope
of the labor demand curve.
becomes negative at some point, and the union never wants to accept a negative marginal wage.
121. Monopolists in the labor market equate the marginal wage with the marginal revenue product to find the desired
level of employment for a union.
122. A union should calculate the marginal wage to determine how additional labor will change the average wage.
123. The desired level of union employment occurs where the market wage curve intersects the labor supply curve.
124. A union will try to increase employment for its members as long as the marginal wage is positive.
125. A union never wants to accept a negative marginal wage.
126. In a monopoly labor market, the optimal union wage can be read off the marginal revenue product curve.
127. Unions cannot exert market power without exerting control over the market supply curve for labor.
128. Union shops never face competition from substitute labor.
129. From the 1930s until today, unions have experienced particularly fast growth in the United States.
130. The unionized percentage of the labor force in the United States has been increasing steadily since the 1950s.
131. Both the unionization and concentration ratios are measures of market power.
132. Labor markets where power exists on both the demand side and the supply side are rare.
133. A monopsonist must raise the wage rate if it desires to hire additional workers.
134. The marginal factor cost facing each employer in a competitive labor market is greater than the market
wage rate.
FALSE
135. Monopsonists hire the amount of labor that will equate the marginal factor cost with the derived demand
curve for labor.
136. A monopsonist will hire fewer workers at a lower wage rate than would prevail in a competitive market.
137. The intersection of the marginal prices or wage and marginal factor cost determines the wage in
bilateral monopoly.
138. In bilateral monopoly, price and output are determined by the intersection of demand and supply curves.
139. Collective bargaining outcomes depend on the relative strength and tactics of the two parties involved.
140. The collective bargaining process can result in a wage below the supply curve of labor.
141. If a union achieves above-equilibrium wages for its membership, the wages of nonunion workers will generally
suffer.
142. Effective labor unions have an impact on prices of goods their workers produce.
143. Work rules that are designed to protect jobs and maximize employment at any level of output are thought to
lower worker productivity.
144. Increased global competition is one reason why unionization has become more popular.
145. The relative decline in manufacturing in the United States has contributed to the decline in unionization.
146. In order to increase their power, unions have been merging across craft and industry lines.
147. Distinguish between the market wage and the marginal wage. Why is the marginal wage significant to an
employer and to a labor union?
148. What is a union shop, and what is its purpose?
149. Explain the concept of marginal factor cost. Why is the marginal factor cost higher than the wage rate?
150. Discuss the impact of unions on relative wages (that is, compare the wages of union workers with those of
nonunion workers).
151. Discuss how unions affect prices indirectly.
Chapter 17 Test Bank Summary
Category
# of Questions
AACSB: Analytic
38
AACSB: Reflective Thinking
113
Accessibility: Keyboard Navigation
134
Blooms: Analyze
16
Blooms: Apply
22
Blooms: Remember
30
Blooms: Understand
83
Difficulty: 01 Easy
30
Difficulty: 02 Medium
83
Difficulty: 03 Hard
38
Learning Objective: 17-01 How unions secure higher wages.
77
Learning Objective: 17-02 The factors that affect collective bargaining outcomes.
42
Learning Objective: 17-03 How unions affect nonunion wages.
32
Topic: COLLECTIVE BARGAINING
14
Topic: EMPLOYER POWER
26
Topic: IN THE NEWS
6
Topic: LABOR UNIONS
9
Topic: THE ECONOMY TOMORROW
5
Topic: THE EXTENT OF UNION POWER
15
Topic: THE IMPACT OF UNIONS
26
Topic: THE LABOR MARKET
15
Topic: THE POTENTIAL USE OF POWER
33
Topic: WORLD VIEW
2
