Mary’s employer is considering her for a firm-specific training program that will cost $3
per hour. Her current marginal revenue product is $15 per hour and will rise to $20
upon completion of the program. Of the following, Mary’s training and post-training
wage, respectively, will most likely be:
a. $15; $20
b. $15; $17
c. $12; $15
d. $12; $20
Which of the following is not a major responsibility of a national union?
a.organizing workers in its craft or industry
b.negotiating collective bargaining agreements
c.handling grievance procedures
d.settling jurisdictional disputes
The Equal Pay Act of 1963 was of little help to many women because:
a. it did not address occupational segregation
b. male employers ignored the act because it provided no enforcement power
c. the act addressed only racial discrimination, not discrimination based on gender
d. it was declared unconstitutional and later replaced by the Civil Rights Act
Francine Blau and Lawrence Kahn have reported that the gender pay gap is larger in the
United States than in countries such as Sweden, Belgium and Australia because:
a. American women tend to have less education than women in other countries
b. The U.S. has not been as committed to equal pay for women as other countries
c. There is a relatively small gap in pay between low- and high-skilled workers in the
U.S. and women are disproportionately represented in lower-skilled jobs
d. There is a relatively large gap in pay between low- and high-skilled workers in the
U.S. and women are disproportionately represented in low-skilled jobs
A firm that provides specific training to its workers:
a. must reduce the wage during the training period, effectively forcing the worker to pay
for the training
b. may be prevented by the minimum wage from paying a wage above marginal
revenue product during the posttraining period
c. will likely provide more training to those who have less formal education
d. has a stronger incentive to reduce employee turnover than firms that provide only
general training
Pattern bargaining is widely used in which industry?
a.Farming
b.Construction
c.Trucking
d.Automotive
The trend of fringe benefits as a percentage of total compensation can be partially
explained by the fact that:
a. tax reform has rendered many types of fringe benefits fully taxable
b. “in-kind” benefits restrict workers’ consumption choices
c. the firm may be able to purchase fringe benefits more cheaply than workers
d. many types of fringe benefits are income inelastic
As a percent of total employment, government employment in the U.S. is currently
about:
a.4%
b.16%
c.22%
d.34%
The provision of a public good that is complementary to leisure will:
a.necessarily decrease labor demand in the private sector
b.necessarily increase labor demand in the private sector
c.likely reduce wage rates of government workers
d.likely reduce work effort
An individual wage-fringe isoprofit line shows:
a. combinations of wages and fringe benefits that result in constant dollar values of total
compensation
b. combinations of wages and fringe benefits that result in the same profit to the firm
c. the greatest possible profit attainable from a given level of fringe benefits
d. the greatest possible profit attainable from a given level of wages
Refer to the diagram. Which one of the following will shift the supply of investment
funds curve downward?
a. A reduction in the availability of student loans
b. Greater ability to transform schooling into earnings
c. An increase in expected work life
d. An increase in grants and scholarships
“As the domestic price level rises, consumers world-wide shift their purchases away
from the U.S.” This describes the:
a.domestic purchases effect
b.interest rate effect
c.real balances effect
d.foreign purchases effect
The measured union wage advantage will understate the pure advantage because of the:
a.spillover effect
b.superior-worker effect
c.product market effect
d.compensating wage differential effect
Which of the following is one of the reasons typically given for the relatively high
secular growth rate of productivity for the period 1959 ” 2006?
a.A three-fold increase in the capital stock
b.An increase in service sector output relative to the manufacturing sector
c.An increase in the average length of the workweek
d.An increase in the use of quotas and tariffs to protect domestic industries
Which of the following increased management’s bargaining power?
a.Limiting the use of injunctions to enjoin a strike
b.Limiting the use of “hot-cargo” clauses
c.Limiting the use of “yellow-dog” contracts
d.Creation of the National Labor Relations Review Board
Since 1950, the labor force participation rate of white women has:
a. increased until it nearly equals that of African-American women
b. fallen until it nearly equals that of African-American women
c. increased and now significantly exceeds that of African-American women
d. been steady since World War II
Empirical estimates of the extent of discrimination may be upwardly biased if:
a. certain variables which have a positive effect on productivity are omitted from the
study
b. certain variables which have a negative effect on productivity are omitted from the
study
c. many variables (such as education or occupation) reflect discriminatory decisions
d. all of the above
Migration causes the value of output in Country U to: .( Initially, wage rates are WM in
Country M and WU in Country U. Subsequent migration results in an equalization of
wage rates.)
a.rise by area imj
b.rise by area kijl
c.rise by area WUijWe
d.fall by WU ” We
With respect to Major League Baseball, studies by Scully and others found that:
a. players were paid substantially less than their marginal revenue products prior to free
agency
b. players were paid their marginal revenue products even before free agency, which is
consistent with the competitive nature of the baseball business
c. players were paid their marginal revenue products prior to free agency. Since that
time, salaries have fallen below marginal revenue products
d. salaries far exceed marginal revenue products since the advent of free agency
All else equal, large firms tend to pay higher wages. This may be explained by all of the
following, except:
a. large firms may be more bureaucratic and a less pleasant place to work
b. large firms are more likely to be unionized
c. workers at large firms are more highly specialized, requiring more on-the-job training
d. large firms are more likely to discriminate against women and minorities
An increase of 500 illegal alien workers would most likely:
a.increase domestic unemployment by 500
b.increase wages paid to native workers in industries which typically hire illegal aliens,
attracting less than 500 native workers into these jobs
c.reduce wages paid to native workers in industries which typically hire illegal aliens,
displacing more than 500 native workers from these jobs
d.reduce wages paid to native workers in industries which typically hire illegal aliens,
displacing less than 500 native workers from these jobs
The demand for human capital curves slope downward and to the right because:
a. education is a screening device
b. as the interest rate rises, the net present value of education rises
c. the benefits of increased education diminish as schooling continues
d. investment in education is subject to increasing marginal returns
If nominal wages rose 1.5% and productivity increased 3% in a given year, we should
expect:
a.an increase in unit labor costs and upward pressure on prices
b.an increase in unit labor costs and downward pressure on prices
c.a decrease in unit labor costs and upward pressure on prices
d.a decrease in unit labor costs and downward pressure on prices
Suppose a proposed law will expand migration into the U.S.. Economic theory suggests
that there will be a net gain accruing to U.S. workers who are:
a.gross substitutes with new immigrants
b.gross complements with new immigrants
c.employed in the same market as new immigrants
d.employed in exporting industries
The measured union wage advantage may overstate the pure union wage advantage
because:
a.workers who lose their jobs in the union sector may seek and obtain jobs in the
nonunion sector, reducing wage rates in the latter
b.nonunion employers may increase the wages they pay their workers to reduce the
likelihood their firms will become unionized
c.workers who lose their jobs in the union sector may prefer to remain in the union
sector, hoping to be recalled rather than accepting lower-paying nonunion wages
d.unionized plants tend to be less efficient, resulting in lower marginal products of
union workers
What is the marginal revenue product of the third worker? (the following table that
shows the short-run production relationship and the product demand schedule for a
firm.)
a. $18
b. $57
c. $72
d. $342
Since the mid 1980s, the labor force participation rate of women has _____ and the
participation rate of men has _____.
a. risen; been unchanged
b. risen; fallen
c. fallen; risen
d. risen; risen
By reducing labor turnover, unions may increase productivity because a lower turnover
rate:
a.results in a less-experienced workforce
b.increases the incentive for firms to provide specific training to their workers
c.allows firms to employ a greater number of younger, more energetic workers
d.increases the incentive for firms to substitute labor for capital in the production
process
The critical determinants of productivity growth include all of the following except:
a.the average quality of the labor force
b.the amount of capital goods employed with each worker hour of labor
c.the efficiency with which inputs are combined
d.the extent of import restrictions
People who receive relatively high pay also tend to work in a relatively desirable work
environment. This is probably because:
a. employers have imperfect information
b. highly paid and poorly paid workers are in noncompeting groups
c. firms with desirable working conditions are operating off their normal isoprofit
curves
d. the differential required to compensate for high skill more than offsets the differential
required for poor working conditions
An increase in unemployment compensation is predicted to:
a.reduce unemployment by raising acceptance wage rates
b.reduce unemployment by reducing acceptance wage rates
c.increase unemployment by reducing acceptance wage rates
d.increase unemployment by raising acceptance wage rates
According to the textbook, each of the following factors may have contributed to
increased female labor force participation except:
a. rising divorce rates
b. expanding job accessibility
c. fewer educational opportunities
d. a desire to maintain household living standards
The type of unemployment commonly associated with displaced workers is:
a.search unemployment
b.structural unemployment
c.wait unemployment
d.demand-deficient unemployment
Over the last few decades, the composition of the labor force has changed to include a
greater proportion of women and younger workers. This fact is most consistent with
the:
a.managerial-opposition hypothesis
b.union-growth hypothesis
c.structural-change hypothesis
d.substitution hypothesis