Unemployment 7053
190.
It is only among the least skilled and least experienced members of the labor force that
minimum-wage laws cause
unemployment.
a.
True
b.
False
191.
U.S. Department of Labor data show that minimum-wage workers tend to be young, less
educated, more likely to
be working part time, and concentrated in the leisure and hospitality
industry.
a.
True
b.
False
192.
If the wage is kept above the equilibrium level for any reason, the result is unemployment.
a.
True
b.
False
193.
If the wage is kept above the equilibrium wage for any reason, the result is structural
unemployment.
a.
True
b.
False
194.
If the wage is kept above the equilibrium level because of minimum-wage laws, then the result is
unemployment; if
the wage is kept above the equilibrium level for some other reason, the result
need not be unemployment.
a.
True
b.
False
195.
When job search is the explanation for unemployment, workers are searching for the jobs that
best suit their tastes
and skills, but when the wage is above the equilibrium level, the quantity of
labor supplied exceeds the quantity of
labor demanded, and workers are unemployed because
they are waiting for jobs to open up.
a.
True
b.
False
196.
A union is an employer association that bargains with workers over wages, benefits, and
working conditions.
a.
True
b.
False
197.
In the 1940s and 1950s, about one-third of U.S. workers belonged to unions, but today, only
about one-fifth of U.S.
workers belong to unions.
a.
True
b.
False
198.
Today, unions play a larger role in Europe than they do in the U.S.
a.
True
b.
False
199.
When a union is present in a labor market, wages are not determined by the equilibrium of
supply and demand.
a.
True
b.
False
200.
A union is a type of cartel.
a.
True
b.
False
201.
Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint
market power.
a.
True
b.
False
202.
The process by which unions and firms agree on the terms of employment is called collective
bargaining.
a.
True
b.
False
203.
If a union and a firm cannot reach an agreement on the terms of employment, then the union can
organize a
withdrawal of labor from the firm, called a strike.
a.
True
b.
False
204.
Economists have found that union workers earn about 30 to 40 percent more than similar
workers who do not
belong to unions.
a.
True
b.
False
205.
When a union raises the wage above the equilibrium level, it reduces the quantity of labor
supplied and raises the
quantity of labor demanded, resulting in unemployment.
a.
True
b.
False
206.
The introduction of a union into a firm benefits all of that firm’s workers.
a.
True
b.
False
207.
Some of a firm’s workers are made worse off by the introduction of a union.
a.
True
b.
False
208.
Unions are often thought to cause conflict between different groups of workers — between the
insiders who benefit
from high union wages and the outsiders who do not get the union jobs.
a.
True
b.
False
209.
Unemployment generated by the existence of labor unions is structural unemployment and so
contributes to the
natural rate of unemployment.
a.
True
b.
False
210.
When unions raise wages in one part of the economy, the supply of labor increases in other parts
of the economy,
which reduces wages in industries that are not unionized.
a.
True
b.
False
211.
Workers in unions reap the benefit of collective bargaining, while workers not in unions bear
some of the cost.
a.
True
b.
False
212.
Unions are exempt from U.S. antitrust laws.
a.
True
b.
False
213.
In the U.S., it is illegal for employers to interfere when workers try to organize unions.
a.
True
b.
False
214.
In the U.S., the National Labor Relations Board is the government agency that enforces workers’
right to unionize.
a.
True
b.
False
215.
Right–to-work laws give workers in a unionized firm the right to choose whether to join the union.
a.
True
b.
False
216.
Right–to-work laws allow striking union members to be permanently replaced.
a.
True
b.
False
217.
Most economists believe unions are bad for the economy as a whole.
a.
True
b.
False
218.
Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable.
a.
True
b.
False
219.
Advocates of unions contend that unions are a necessary antidote to the market power of the
firms that hire workers and that unions are important for helping firms respond efficiently to
workers’ concerns.
a.
True
b.
False
220.
According to the theory of efficiency wages, firms operate more efficiently if wages are above
the equilibrium
level.
a.
True
b.
False
221.
According to the theory of efficiency wages, firms operate more efficiently if wages are below
the equilibrium
level.
a.
True
b.
False
222.
According to the theory of efficiency wages, it may be profitable for firms to keep wages high
even in the presence
of a surplus of labor.
a.
True
b.
False
223.
Efficiency wages create structural unemployment.
a.
True
b.
False
224.
A firm might offer efficiency wages so its workers will eat a more nutritious diet and therefore
be healthier and
more productive.
a.
True
b.
False
225.
The efficiency-wage theory of worker health is more relevant for explaining unemployment in
less developed
countries than in rich countries.
a.
True
b.
False
226.
A firm might offer efficiency wages to reduce worker turnover and thereby reduce production
costs.
a.
True
b.
False
227.
A firm might offer efficiency wages in order to attract a better pool of applicants.
a.
True
b.
False
228.
A firm might offer efficiency wages in order to reduce shirking.
a.
True
b.
False
229.
In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a
result, turnover and
absenteeism fell and productivity and profits rose.
a.
True
b.
False
230.
The table below uses data for the year 2003 provided by the Bureau of Labor Statistics and
adjusted to be
comparable to U.S. data. All values are in thousands. Fill in the blank entries in
the table.
Country
Labor
Force
Employed
Unemployed
Unemployment
Rate
Labor-Force
Participation
Rate
Japan
62,510
3,500
France
26,870
2,577
57.41
Germany
39,591
9.69
231.
Following the recession of 2001, there was a month in which employment and the unemployment
rate both rose. Assuming the computations were correct, how is it possible for both to have
increased?
232.
Why have labor-force participation rates for women in the United States increased since World
War II while labor-
force participation rates for men have decreased?
233.
Most spells of unemployment are short, and most unemployment observed at any given time is
long term. How can
this be?
234.
Why might a favorable change in the economy, such as technological improvement or a decrease
in the price of
imported oil, be associated with an increase in frictional unemployment?
235.
Teenage unemployment is higher than unemployment of people ages 20 and over. Explain why
economists would
attribute at least part of this difference to minimum-wage laws.
236.
Since unemployment rates are consistently higher in Canada and some Western European
countries than in the
United States, it appears that the natural rate of unemployment is lower in
the United States. What might explain
this difference?
237.
Suppose that there is an excess supply of economics professors. Should universities necessarily
reduce salaries? What does standard economic theory suggest? What does efficiency-wage
theory suggest?
238.
What is the theory of efficiency wages? Provide four reasons that employers might pay
efficiency wages.