Question 1

The major reason that presidents of major corporations receive an average salary of over $1 million a year, while police officers receive an average salary of about $56,000 a year, can best be explained by

Accepted Answer

A)  discrimination.
B)  lack of job information.
C)  compensating differences.
D)  noncompeting labor groups.

Question 2

Which one of the following best exemplifies the principal-agent problem in the employer-employee relationship?

Accepted Answer

A)  A worker takes 20-minute coffee breaks although the employer allots only 15 minutes for this purpose.
B)  A worker is on the job 50 hours per week although only 40 hours are required for promotion.
C)  A worker opts for early retirement in response to the firm's incentive plan.
D)  A worker's productivity is independent of the wage paid.

Question 3

Geographic immobility in the labor force results in

Accepted Answer

A)  homogeneous wage rates.
B)  homogeneous unemployment rates.
C)  local labor markets which reach equilibrium quickly and efficiently.
D)  persistent wage and unemployment differentials among different regions of the country.

Question 4

The monopsonistic power of a firm in a labor market tends to be enhanced by

Accepted Answer

A)  entry of new firms in that market.
B)  higher transferability of workers' skills to other professions.
C)  an increasing immobility of workers to other jobs or locations.
D)  technological advances that make online services easier to provide.

Question 5

If the supply of labor in a purely competitive labor market increases, then the product

Accepted Answer

A)  supply curve for a single employer will shift to the right.
B)  supply curve for a single employer will shift to the left.
C)  demand curve for a single employer will shift to the right.
D)  demand curve for a single employer will shift to the left.

Question 6

Union workers have higher rates of job turnover than do nonunion workers.

Accepted Answer

A) True 
 B)False

Question 7

A monopsonist's wage cost in hiring an additional worker is the

Accepted Answer

A)  worker's wage rate.
B)  worker's wage rate plus the wage increases paid to all workers already employed.
C)  worker's wage rate adjusted for the lower price that must be charged for the extra output.
D)  marginal wage cost less the wage rate.

Question 8

Which of the following is not an example of a market imperfection that might explain persistent wage differentials within an occupation?

Accepted Answer

A)  geographic immobility of workers
B)  discrimination
C)  noncompeting groups
D)  poor information about job opportunities and pay

Question 9

Compensation paid in proportion to the number of units of personal output best describes

Accepted Answer

A)  royalties.
B)  profit sharing.
C)  bonuses.
D)  piece rates.

Question 10

Right-to-work laws prohibit the formation of labor unions.

Accepted Answer

A) True 
 B)False

Question 11

In 2015, there were about million union members in the United States.

Accepted Answer

A)  8.4
B)  11.6
C)  16.4
D)  22.0

Question 12

Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers.

Accepted Answer

A) True 
 B)False

Question 13

There is no evidence that unions are able to increase wage rates above those that the market would otherwise provide.

Accepted Answer

A) True 
 B)False

Question 14

The rate of unionization is substantially higher for protective service workers than for sales workers.

Accepted Answer

A) True 
 B)False

Question 15

The real wage will rise if the nominal wage

Accepted Answer

A)  falls more rapidly than the general price level.
B)  increases at the same rate as labor productivity.
C)  increases more rapidly than the general price level.
D)  falls at the same rate as the general price level.

Question 16

The presence of an agency shop requires all workers to join the union within the first 30 days of employment.

Accepted Answer

A) True 
 B)False

Question 17

Nonmonetary considerations tend to be most important in the allocation of

Accepted Answer

A)  land resources.
B)  capital resources.
C)  labor resources.
D)  natural resources.

Question 18

Suppose in some economy there are 100 million workers; 10 million of those workers work in retail trade, and 1 million of the retail workers belong to unions.Total union membership in this economy is 40 million.The rate of unionization in retail trade is

Accepted Answer

A)  1 percent.
B)  10 percent.
C)  40 percent.
D)  100 percent.

Question 19

A labor union may engage in a lockout if the collective bargaining process breaks down.

Accepted Answer

A) True 
 B)False

Question 20

Since 1980, labor union membership in the United States has been

Accepted Answer

A)  increasing absolutely and as a percentage of the labor force.
B)  increasing absolutely but declining as a percentage of the labor force.
C)  decreasing absolutely and as a percentage of the labor force.
D)  decreasing absolutely but increasing as a percentage of the labor force.

Exam 17: Wage Determination

If the supply of labor in a purely competitive labor market increases, then the product

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Geographic immobility in the labor force results in

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The major reason that presidents of major corporations receive an average salary of over $1 million a year, while police officers receive an average salary of about $56,000 a year, can best be explained by

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Which of the following is not an example of a market imperfection that might explain persistent wage differentials within an occupation?

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A monopsonist's wage cost in hiring an additional worker is the

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Which one of the following best exemplifies the principal-agent problem in the employer-employee relationship?

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The real wage will rise if the nominal wage

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Nonmonetary considerations tend to be most important in the allocation of

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The rate of unionization is substantially higher for protective service workers than for sales workers.

Correct AnswerverifiedShow Answer

The monopsonistic power of a firm in a labor market tends to be enhanced by

Correct AnswerverifiedShow Answer

Compensation paid in proportion to the number of units of personal output best describes

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Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers.

Correct AnswerverifiedShow Answer

There is no evidence that unions are able to increase wage rates above those that the market would otherwise provide.

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In 2015, there were about million union members in the United States.

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Right-to-work laws prohibit the formation of labor unions.

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Suppose in some economy there are 100 million workers; 10 million of those workers work in retail trade, and 1 million of the retail workers belong to unions.Total union membership in this economy is 40 million.The rate of unionization in retail trade is

Correct AnswerverifiedShow Answer

Since 1980, labor union membership in the United States has been

Correct AnswerverifiedShow Answer

Union workers have higher rates of job turnover than do nonunion workers.

Correct AnswerverifiedShow Answer

A labor union may engage in a lockout if the collective bargaining process breaks down.

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The presence of an agency shop requires all workers to join the union within the first 30 days of employment.

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