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23. Refer to Figure 28-3. If the government imposes a minimum wage of $4, how many workers
will be unemployed?
a. 0
b. 3,000
c. 4,000
d. 7,000
24. Refer to Figure 28-3. If the government imposes a minimum wage of $4, how many workers
will be employed?
a. 3,000
b. 4,000
c. 5,000
d. 7,000
6934 Unemployment
25. Refer to Figure 28-3. If the government imposes a minimum wage of $4, then unemployment
will increase by
a. 0 workers.
b. 2,000 workers.
c. 4,000 workers.
d. 5,000 workers.
26. Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment will
decrease by
a. 0 workers.
b. 2,000 workers.
c. 3,000 workers.
d. 4,000 workers.
Unemployment 6935
27. Refer to Figure 28-3. If the government imposes a minimum wage of $8, then how many
workers will be unemployed?
a. 0
b. 3,000
c. 4,000
d. 7,000
28. Refer to Figure 28-3. If the government imposes a minimum wage of $8, then how many
workers will be employed?
a. 3,000
b. 4,000
c. 5,000
d. 7,000
6936 Unemployment
29. Refer to Figure 28-3. If the government imposes a minimum wage of $8, then unemployment
will increase by
a. 0 workers.
b. 2,000 workers.
c. 4,000 workers.
d. 7,000 workers.
30. Refer to Figure 28-3. If the government imposes a minimum wage of $8, then employment will
decrease by
a. 0 workers.
b. 2,000 workers.
c. 3,000 workers.
d. 4,000 workers.
Unemployment 6937
31. Refer to Figure 28-3. If unemployment is 2,000 workers, then the minimum wage must be
a. $4.
b. $5.
c. $7.
d. $8.
Figure 28–4
32. Refer to Figure 28-4. If the government imposes a minimum wage of $2, how many workers
will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 6,000
33. Refer to Figure 28-4. If the government imposes a minimum wage of $3, how many workers
will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 6,000
34. Refer to Figure 28-4. If the government imposes a minimum wage of $4, how many workers
will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 6,000
35. Refer to Figure 28-4. If the government imposes a minimum wage of $5, how many workers
will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 6,000
36. Refer to Figure 28-4. If the government imposes a minimum wage of $6, how many workers
will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 6,000
6940 Unemployment
37. Refer to Figure 28-4. If the government imposes a minimum wage of $7, how many workers
will be unemployed?
a. 0
b. 2,000
c. 4,000
d. 6,000
38. Refer to Figure 28-4. If 2,000 workers are unemployed, then the minimum wage must be
a. $3.
b. $4.
c. $5.
d. $6.
Unemployment 6941
39. Refer to Figure 28-4. If 4,000 workers are unemployed, then the minimum wage must be
a. $2.
b. $4.
c. $5.
d. $6.
40. Refer to Figure 28-4. If 6,000 workers are unemployed, then the minimum wage must be
a. $1.
b. $4.
c. $6.
d. $7.
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Figure 28–5
41. Refer to Figure 28-5. If the minimum wage is set at $125, then
a. the quantity of labor demanded will equal 20.
b. the quantity of labor supplied will equal 35.
c. the surplus of labor will equal 25.
d. unemployment will equal 10.
Unemployment 6943
42. Minimum-wage laws are most likely to affect the wages paid to
a. teenagers.
b. people with advanced technical training.
c. people who are self-employed.
d. union members.
43. Minimum-wage laws are least likely to affect the wages paid to
a. teenagers.
b. low-skill workers.
c. inexperienced workers.
d. highly-educated workers.
6944 Unemployment
44. If the wage is kept above the equilibrium wage for any reason, the result is
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.
45. Wages in excess of their equilibrium level help explain
a. frictional but not structural unemployment.
b. structural but not frictional unemployment.
c. both frictional and structural unemployment.
d. neither frictional nor structural unemployment.
46. Wages in excess of their equilibrium level help explain
a. structural unemployment but not the natural rate of unemployment.
b. the natural rate of unemployment but not structural unemployment.
c. both structural unemployment and the natural rate of unemployment.
d. neither structural unemployment nor the natural rate of unemployment.
Unemployment 6945
47. Other things the same, an increase in wages above their equilibrium level
a. increases frictional unemployment but leaves the natural rate of unemployment unchanged.
b. increases frictional unemployment and increases the natural rate of unemployment.
c. increases structural unemployment but leaves the natural rate of unemployment unchanged.
d. increases structural unemployment and increases the natural rate of unemployment.
48. When the wage is above the equilibrium level,
a. the labor market is functioning more efficiently than it otherwise would function.
b. there is a shortage of labor.
c. the quantity of labor supplied exceeds the quantity of labor demanded.
d. job search is the primary explanation for the unemployment that is observed.
49. Workers searching for jobs that best suit them is most closely associated with
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.
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50. Workers waiting for jobs to open up is most closely associated with
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.
Multiple Choice – Section 04: Unions and Collective Bargaining
1. Which of the following is not correct?
a. A union is a worker association that bargains with employers over wages, benefits, and working
conditions.
b. Unions play a much larger role in the U.S. labor market now than they did in the past.
c. Unions play a large role in many European countries.
d. A union is a type of cartel.
Unemployment 6947
2. Which of the following is correct?
a. Union membership in the United States peaked in the 1940s and 1950s.
b. Unions play a larger role in the United States than in European countries such as Belgium,
France, and Germany.
c. Because of the popularity of unions, most workers in the United States discuss their wages,
benefits, and working conditions with their employers as a group.
d. Collective bargaining is the process by which unions negotiate membership dues with the
National Labor Relations Board.
3. In Belgium, Norway, and Sweden, the percentage of workers who belong to unions is
a. almost zero.
b. less than it is in the United States.
c. about the same as it is in the United States.
d. greater than it is in the United States.
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4. Since the 1940’s U.S. union membership has
a. fallen. This decline should have reduced structural unemployment.
b. fallen. This decline should not have reduced structural unemployment.
c. risen. This increase should have raised structural unemployment.
d. risen. This increase should not have raised structural unemployment.
5. Labor unions
a. raise wages in unionized industries.
b. create labor shortages in non-unionized industries.
c. play a larger role in the current U.S. economy than in European countries such as Norway and
Sweden.
d. prefer to operate in states with right–to-work laws.
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6. Labor unions
a. prefer to operate in states with right-to-work laws.
b. are similar to cartels.
c. play a larger role in the current U.S. economy than in European countries such as Norway and
Sweden.
d. attract a membership of about 25 percent of current U.S. workers.
7. Sam has no job but keeps applying to get a job with a business that is unionized. He is qualified and
he finds the pay attractive, but the firm is not hiring. Sam is
a. structurally unemployed. Structural unemployment exists even in the long run.
b. structurally unemployed. Structural unemployment does not exist in the long run.
c. frictionally unemployed. Frictional unemployment exists even in the long run.
d. frictionally unemployed. Frictional unemployment does not exist in the long run.
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8. Which of the following is not correct?
a. When a union is present in a labor market, wages are not determined by the equilibrium of supply
and demand.
b. Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint
market power.
c. The process by which unions and firms agree on the terms of employment is called a strike.
d. Most workers in the U.S. economy are not members of a union.
9. Which of the following is not correct?
a. When a union is present in a labor market, wages are determined by the equilibrium of supply
and demand.
b. Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint
market power.
c. The process by which unions and firms agree on the terms of employment is called collective
bargaining.
d. Most workers in the U.S. economy are not members of a union.
Unemployment 6951
10. Which of the following is not correct?
a. When a union is present in a labor market, wages may not be determined by the equilibrium of
supply and demand.
b. Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint
market power.
c. When unions raise wages above equilibrium, the quantity of labor supplied decreases, and the
quantity of labor demanded increases.
d. Most workers in the U.S. economy are not members of a union.
11. Collective bargaining refers to
a. the process by which the government sets exemptions from the minimum wage law.
b. setting the same wage for all employees to prevent conflict among workers.
c. firms colluding to set the wages of employees below equilibrium.
d. the process by which unions and firms agree on the terms of employment.
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12. Which of the following is not correct?
a. An organized withdrawal of labor from a firm by a union is called a strike.
b. The power of a union comes from its ability to strike if the union and the firm do not agree on
the terms of employment.
c. Economists who study the effects of unions typically find that union workers earn about 25 to
35 percent more than similar workers who do not belong to unions.
d. Workers in unions reap the benefit of collective bargaining, while workers not in unions bear
some of the cost.
13. Economists have found that union workers earn what percent more than similar nonunion
workers?
a. 0 to 5
b. 5 to 10
c. 10 to 20
d. 20 to 30