Quantity Hourly Total Marginal
of Labor Wage Rate Wage Bill Factor Cost
0– – –
1$10
212
3 14
416
518
620
215)
In the above table, if the marginal revenue product is $18, how many workers will the profit
maximizing monopsonist hire and what wage will they pay each worker?
215)
A)
3; $18
B)
4; $16
C)
5; $18
D)
3; $14
216)
The U.S. labor movement started
216)
A)
with the Knights of Labor, an organized group of both skilled and unskilled workers.
B)
during the Civil War.
C)
with local craft unions composed of workers who engaged in a particular trade or skill, such
as baking, carpentry or plumbing.
D)
after World War I.
217)
Suppose that under its collective bargaining agreement the XYZ Corp. can hire nonunion workers,
but these workers must join the union within 60 days. This agreement is an example of
217)
A)
a union shop.
B)
an open shop.
C)
a closed shop.
D)
a company union.
218)
A boycott of products sold by companies that are dealing with a company whose workers are on
strike is a
218)
A)
secondary boycott.
B)
sympathy strike.
C)
jurisdictional dispute.
D)
right–to–boycott law.
219)
A monopsonist is
219)
A)
a firm that has a unionized labor force.
B)
a single buyer of an input.
C)
a firm with monopoly power in the local area.
D)
a single seller of an input.
220)
In the above figure, what is the quantity of workers that would be hired by a monopsonist?
220)
A)
Q1
B)
Q2
C)
Q3
D)
Q4
Quantity Hourly Total Marginal
of Labor Wage Rate Wage Bill Factor Cost
0– – –
1$10
212
3 14
416
518
620
221)
In the above table, what is the marginal factor cost of the 6th worker?
221)
A)
$30
B)
$20
C)
$18
D)
$120
222)
A monopsonist finds its profit maximizing quantity of labor employed at the point at which
222)
A)
marginal revenue product equals marginal factor cost.
B)
marginal factor cost is zero.
C)
marginal revenue product is zero.
D)
total cost equals total revenue.
223)
All of the following are true regarding the current status of labor unions EXCEPT
223)
A)
recent labor laws have diminished worker’s rights.
B)
organized labor’s heyday occurred from the 1940s through the 1970s.
C)
part of the explanation for the decline in union membership has to do with the shift away
from manufacturing.
D)
the deregulation of certain industries has also contributed to a decline in unionism.
224)
The United Auto Worker (UAW) would best be classified as
224)
A)
an industrial union.
B)
a guild.
C)
a craft union.
D)
closed shop union.
E)
none of the above
225)
If a union limits its size to the number of employed members it had when the union was first
formed, over time there will be
225)
A)
falling wages as demand for workers increases.
B)
an increase in the supply of union labor.
C)
rising wages as demand for workers increases and the supply increases proportionally.
D)
rising wages as demand for workers increases but some potential workers are denied a place
in the union.
226)
If you get a job and are never required to join the union, this is known as a(n)
226)
A)
closed shop.
B)
open shop.
C)
agency shop.
D)
union shop.
227)
Suppose a union successfully negotiates for its members a wage rate that is above the competitive
wage rate, then
227)
A)
antitrust laws become effective.
B)
there will be downward pressure on the wage rate until equilibrium is established.
C)
there will be an excess supply of labor.
D)
there will be a surplus of jobs.
228)
The Knights of Labor was
228)
A)
an organization of both unskilled and skilled workers that pushed for an eight–hour workday
and equal pay for men and women.
B)
a craft union that tried to restrict immigration into the United States.
C)
an industrial union composed of military personnel that tried to improve military life.
D)
an organization of skilled labor that tried to increase technical training after the German
model.
229)
Labor unions composed of workers who engage in a particular trade or skill, such as carpentry, are
called
229)
A)
closed unions.
B)
collective unions.
C)
industrial unions.
D)
craft unions.
230)
If a firm is a union shop, then
230)
A)
only workers who have been union members for two years may be employed.
B)
only union members may be employed by the firm.
C)
a worker may elect to either join or not join the union.
D)
a non–union worker may be hired but must join the union within a certain time period.
231)
Unions can increase labor productivity by
231)
A)
reducing the quantity of poorly made imports into the country.
B)
reducing the supply of workers over time.
C)
reducing conflicts between workers and management.
D)
maximizing the number of workers in the union.
232)
A union–sponsored television campaign urging U.S. consumers to “Look for the union label” is
designed to
232)
A)
raise wages by restricting the supply of union workers.
B)
increase the derived demand for union labor by shifting consumer preferences in favor of
union–made goods.
C)
remind consumers that if they do not buy union–made goods, unions will strike.
D)
increase the productivity of union labor.
233)
The 1935 Act granting workers the right to form unions and bargain collectively is known as
233)
A)
the Taft–Hartley Act.
B)
the National Labor Relations Act or Wagner Act.
C)
the Wheeler Act.
D)
the Modernization Act.
234)
A union shop is a
234)
A)
strike by a union in sympathy with another union’s strike or cause.
B)
business enterprise in which employees must belong to the union before they can be hired
and must remain in the union after they are hired.
C)
dispute involving two or more unions over which should have control of a particular
jurisdiction.
D)
business which may hire nonunion members conditional on their joining the union by some
specified date after employment begins.
235)
The leadership of unions must recognize that they face
235)
A)
a fundamental trade–off between higher wages for members and fewer jobs for members.
B)
a fundamental trade–off between higher wages for members and higher taxes for members.
C)
an economic system that is hostile to the interests of workers.
D)
a no–win situation whenever they think a strike is necessary.
236)
In the above figure, what is the wage rate the monopsonist will pay?
236)
A)
W1
B)
W2
C)
W3
D)
W4
237)
The United Steel Workers Union is an example of
237)
A)
a blue collar union.
B)
an industrial union.
C)
a craft union.
D)
an auto union.
238)
Laws that outlaw union shops and which may be passed (or not) by individual states are called
238)
A)
pro–scab laws.
B)
free–rider laws.
C)
Smoot–Hawley laws.
D)
right–to–work laws.
B
239)
If a union sets the wage rate to maximize the total wage receipts of its members, the price elasticity
of demand for labor would be
239)
A)
positive, but less than 1.
B)
finite, but greater than –1.
C)
numerically equal to 1.
D)
zero.
240)
A company can hire non–union workers, but a condition of their employment is that they must join
the union within their first 90 days on the job. This is an example of a
240)
A)
voluntary craft union.
B)
right–to–work law.
C)
closed–shop.
D)
union shop.
241)
The Taft–Hartley Act of 1947 made
241)
A)
sympathy strikes legal.
B)
closed shops illegal.
C)
secondary boycotts legal.
D)
union shops illegal.
242)
Today, the share of union membership among public sector workers in the United States is
242)
A)
zero.
B)
more than twice the share of union membership among private sector workers.
C)
the same as the share of union membership among private sector workers.
D)
less than half of the share of union membership among private sector workers.
C
243)
Refer to the above figure. The monopsonistic exploitation is
243)
A)
W1 –W5.
B)
W2 –W4.
C)
W2 –W5.
D)
W2 –W3.
244)
If you get a job and are required to join the union within a month, this is known as a(n)
244)
A)
closed shop.
B)
open shop.
C)
agency shop.
D)
union shop.
245)
The union wage differential
245)
A)
is greater for private sector employees than for government sector workers.
B)
varies substantially across employment sectors.
C)
has remained fairly constant over the past 30 years.
D)
increases during expansions.
C
246)
For a monopsonist, the marginal factor cost curve will be above the supply of labor curve. The
marginal factor cost curve is above the supply curve because
246)
A)
in order for the monopsonist to sell an additional unit of the good, the price of the good must
be lowered.
B)
in order for the monopsonist to hire more labor the monopsonist must also purchase more
capital.
C)
the monopsonist will take advantage of labor and offer them lower wages.
D)
the monopsonist will have to pay all workers a higher wage rate than the current wage rate if
it wants to hire more workers.
247)
Labor unions that consist of workers from a particular industry, such as automobile manufacturing,
are called
247)
A)
industrial unions.
B)
collective unions.
C)
craft unions.
D)
closed unions.
248)
In recent decades, the union–nonunion hourly wage differential has
248)
A)
fallen significantly.
B)
increased substantially.
C)
increased slightly.
D)
stayed the same.
249)
The earliest unions in the United States were
249)
A)
craft unions.
B)
industrial unions.
C)
military unions.
D)
public–sector unions.
D
250)
In the United States the differential between union and non–union wages
250)
A)
has been narrowing.
B)
currently averages about 50–60 percent.
C)
does not exist.
D)
tends to fall during a recession because union members typically have shorter–term contracts
than do nonunion employees.
251)
Which of the following is legal under the Taft–Hartley Act?
251)
A)
secondary boycotts
B)
collective bargaining
C)
sympathy strikes
D)
closed shops
252)
When there is only one buyer in the market
252)
A)
the supply curve for the good will be perfectly elastic.
B)
a monopsony exists.
C)
a closed shop exists.
D)
then the market will be perfectly competitive.
253)
A bilateral monopoly means
253)
A)
that a monopsonistic employer bargains with both an industrial and a craft union.
B)
that a monopsonistic employer bargains with two unions.
C)
that an industrial union bargains with a two–firm oligopoly.
D)
that a monopsonistic employer bargains with a monopoly.
254)
In an analytical sense, unions can be thought of as
254)
A)
monopoly buyers of workers.
B)
setters of minimum wages.
C)
monopsonies.
D)
generators of inflation.
255)
The monopsonistic exploitation of labor refers to
255)
A)
workers being paid a wage less than their marginal revenue product.
B)
the reduction in total output from monopoly in the product market.
C)
the reduction in employment resulting from union wage setting.
D)
the union wage differential.
256)
The Wagner Act
256)
A)
restricted activities of heads of unions that were not beneficial to union members.
B)
permitted states to pass right–to–work laws.
C)
permitted unions to engage in collective bargaining.
D)
mandates compulsory arbitration in some key industries.
257)
When there is only one buyer in a market, there is a
257)
A)
monopoly.
B)
monopsony.
C)
buyer’s monopoly.
D)
buyer’s cooperative.
258)
A right–to–work law makes it illegal
258)
A)
to fire a worker who has joined a union or who tries to organize a union at any firm.
B)
for union membership to be a requirement for continued employment in any firm.
C)
to inquire whether a prospective employee is a member of a union or not.
D)
to prevent union members from working in any firm.
A
259)
Which of the following is one of the reasons for declining union membership in the United States?
259)
A)
The AFL–CIO merger and creation of the Change to Win Federation reduced competition
among unions.
B)
Labor force participation by women has decreased.
C)
the repeal of the Taft–Hartley Act
D)
Much of the unskilled, nonunionized work in the United States is done by immigrant workers
who are undocumented.
Quantity of
Wage Rate Labor Supplied
$10 1
$15 2
$20 3
$25 4
260)
Use the above table. If the marginal revenue product is $30, how many workers will the profit
maximizing monopsonist hire and what wage will they pay each worker?
260)
A)
4; $25
B)
3; $20
C)
1; $10
D)
2; $15
261)
A monopsonist in the labor market has
261)
A)
a decreasing average variable cost.
B)
an upward sloping labor supply curve.
C)
a perfectly elastic labor supply.
D)
a downward sloping marginal revenue product curve.
262)
Which of the following has been the largest organized group of U.S. unions during the past 50
years?
262)
A)
AFL–CIO
B)
CIO
C)
Change to Win
D)
AFL
263)
The National Labor Relations Act (Wagner Act)
263)
A)
set the length of the workweek at 40 hours.
B)
guaranteed workers the right to organize.
C)
set the minimum wage at $5.15 an hour.
D)
prohibited the creation of company unions.
264)
A labor union composed of workers in the same industry is called
264)
A)
an industrial union.
B)
a company shop.
C)
a guild.
D)
a craft union.
Explanation:
265)
Right–to–work laws
265)
A)
make it illegal to require a union member to work abroad.
B)
make it illegal to require union membership as a condition of continuing employment in a
particular firm.
C)
make it illegal for a state to pass any laws regarding union membership.
D)
make a closed shop arrangement a legal condition that allows employees to obtain a
particular job.
Explanation:
266)
Which of the following is the largest union in the United States?
266)
A)
National Education Association
B)
International Brotherhood of Teamsters
C)
International Brotherhood of Electrical Workers
D)
American Federation of State, County, and Municipal Employees
Explanation:
B
Explanation:
267)
To reduce labor surplus above the equilibrium union wage level, a union may do all of the
following EXCEPT
267)
A)
assign jobs based on seniority.
B)
lengthen apprenticeship period.
C)
limit the number of new members accepted.
D)
encourage nonunion members to join the union.
268)
The American Federation of Labor was formed in 1886 as a dissident group from the
268)
A)
Masonic Lodge.
B)
Knights of Labor.
C)
Knights of Pythias.
D)
Knights of Columbus.
269)
A situation in which a worker can be hired without being in a union but has to join a union after a
specified period of time is a
269)
A)
restricted shop.
B)
open shop.
C)
closed shop.
D)
union shop.
270)
A monopsonist that wants to hire more labor must pay more for the new labor than it is currently
paying and increase the wage rate of all existing employees because
270)
A)
the demand curve for labor is inelastic.
B)
of competition in the labor market.
C)
of labor unions.
D)
the supply of labor is upward sloping.
Quantity Hourly Total Marginal
of Labor Wage Rate Wage Bill Factor Cost
0– – –
1$10
212
3 14
416
518
620
271)
In the above table, if the marginal revenue product is $14, how many workers will the profit
maximizing monopsonist hire?
271)
A)
2
B)
3
C)
4
D)
5
272)
The U.S. labor movement started with
272)
A)
depression unions.
B)
aerospace workers unions.
C)
craft unions.
D)
industrial unions.
273)
The figure supports all of the following statements regarding the marginal factor cost curve for a
monopsonist EXCEPT
273)
A)
the intersection of MFC with MRP, at point E, determines the number of workers hired.
B)
the marginal benefit of hiring additional workers is given by the firm’s MRP curve.
C)
a monopsonist cannot find the profit–maximizing quantity of labor demanded at E.
D)
the monopsonist firm looks at a marginal cost curve, MFC, which slopes upward and is above
its labor supply curve.
274)
The marginal factor cost of a monopsonist is
274)
A)
upward sloping and rises faster than the supply curve.
B)
horizontal.
C)
upward sloping and the same as the supply curve.
D)
downward sloping when the supply curve of labor is upward sloping.
275)
The CIO was formed as a(n)
275)
A)
union shop.
B)
association of industrial unions.
C)
closed shop.
D)
bilateral monopoly.
C
276)
The other name for the National Labor Relations Act of 1935 is
276)
A)
the Taft–Hartley Act.
B)
the Wheeler–Lea Act.
C)
the Clayton Act.
D)
the Wagner Act.
Quantity of Required
Labor Supplied Wage Rate
1$6.00
2 9.00
3 12.00
415.00
5 18.00
6 21.00
7 24.00
8 27.00
930.00
10 33.00
277)
According to the above table, the marginal factor cost of the seventh worker is
277)
A)
$42.00.
B)
$168.00.
C)
$24.00.
D)
$126.00.
278)
If the union wants to follow the strategy of maximizing member’s income, wages should be set
278)
A)
such that all that wanted to work could work.
B)
at the point at which the price elasticity of demand equals 1.
C)
above the market clearing wage rate.
D)
at the market clearing wage rate.
279)
A monopsonist is
279)
A)
a non–profit–maximizing firm.
B)
a single seller.
C)
a single buyer.
D)
one of a few firms that face a unionized labor market.