Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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A
worker's labor supply depends on, among other things, his ability, his preference for the task, and
the opportunity cost of his time.
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2.
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Leisure is a. | not subject to the law of diminishing utility because you can
never have enough leisure time | b. | not subject to the law of diminishing utility because you can
derive utility only from goods and services | c. | subject to the
law of diminishing utility, just as the consumption of goods and services
is | d. | subject to the
law of diminishing utility only if it involves the consumption of goods and
services | e. | not considered in maximizing utility | | |
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3.
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Because leisure is a normal good, an increase in income a. | decreases the
demand for leisure time and reduces the amount of time allocated to market
work | b. | decreases the
demand for leisure time and increases the amount of time allocated to market work and/or nonmarket
work | c. | increases the
demand for leisure time and reduces the amount of time allocated to market work and nonmarket
work | d. | increases the
demand for leisure time and increases the amount of time allocated to market work and nonmarket
work | e. | has no impact on
the demand for leisure time | | |
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4.
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The
substitution effect in the labor supply decision refers to a. | substituting
leisure for work as the wage rate rises | b. | substituting market work for nonmarket work as the wage rate
falls | c. | working more hours as the wage rate
falls | d. | working fewer hours as the wage rate
rises | e. | substituting market work for leisure or nonmarket work as the
wage rate rises | | |
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5.
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If my
wage rate increases, utility maximization requires that my quantity of labor
supplied a. | increase | b. | decrease | c. | increase if the
income effect dominates the substitution effect | d. | increase if the
substitution effect dominates the income effect | e. | increase if the
substitution effect equals the income effect | | |
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6.
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In
Exhibit 0186, how much will the employer have to pay per hour to get this worker to work 48 hours per
week? a. | $6 | b. | $7 | c. | $9 | d. | $12 | e. | less than $12 | | |
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7.
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Mitchell and Michelle are both attorneys at a Memphis law firm. Mitchell's salary is
higher than Michelle's, which proves that there is sex discrimination at this firm.
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8.
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Which
of the following could explain a decrease in the demand for labor in a particular
job? a. | additional
training that increases the productivity of each unit of labor in this
market | b. | an increase in the amount of risk associated with this
job | c. | a decrease in
the amount of risk associated with this job | d. | an improvement
in the working conditions associated with this job | e. | a decrease in
the productivity of each unit of labor in this market | | |
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9.
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If
labor were completely mobile, we would expect a. | people to move where doctors are
cheaper | b. | nurses in Toledo to earn the same income (after accounting for
differences in the cost of living) as doctors in Toledo | c. | nurses in Toledo
to earn the same income (after accounting for differences in the cost of living) as nurses in
Nashville | d. | nurses in Toledo to earn the same income (after accounting for
differences in the cost of living) as nurses in Nashville only if there were no differences in
demand | e. | nurses in Toledo to earn the same income (after accounting for
differences in the cost of living) as nurses in Nashville only if there were no differences in
supply | | |
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10.
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In a
winner-take-all labor market, a. | anyone who is hired at any wage is a
winner | b. | any firm that can hire a worker is a
winner | c. | a few key people critical to the overall success of the
enterprise are rewarded with substantial pay | d. | the person most
critical to the overall success of an enterprise is rewarded with substantial pay, and everyone else
is paid the median wage | e. | only one worker is paid | | |
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11.
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Most
collective bargaining agreements in the United States are reached a. | only after
binding arbitration | b. | only after a strike | c. | without a
strike | d. | only after a strike lasting at least three
weeks | e. | only after government intervention to avoid a
strike | | |
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12.
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Which
of the following unions would be most likely to belong to the American Federation of
Labor? a. | a steelworkers'
union | b. | a government employees' union | c. | a union of
agricultural workers | d. | a bricklayers' union | e. | a union of
communications workers | | |
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13.
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Unions organized at different businesses were allowed to join together to try to force
wage increases by the a. | Clayton Act of 1914 | b. | Sherman Act of
1890 | c. | Wagner Act of
1935 | d. | Norris-LaGuardia
Act of 1932 | e. | executive order of President Gompers in
1921 | | |
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14.
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An
impartial observer who attempts to settle disagreements by listening to both sides separately and
making suggestions is called a(n) a. | collective bargaining agent | b. | arbitrageur | c. | mediator | d. | binding
negotiator | e. | judge | | |
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15.
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Unions can increase their wage rates by a. | all of the
following | b. | decreasing the supply of labor | c. | using the threat
of a strike | d. | increasing the proportion of union workers in the
industry | e. | increasing the demand for the product they produce and,
therefore, the demand for their labor services | | |
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16.
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If
the United Auto Workers successfully negotiates a wage that is higher than the competitive
wage, a. | there is no
excess supply of labor because everyone who wants to work at the union wage can get a
job | b. | there is no
excess demand for labor because everyone who wants to work at the union wage can get a
job | c. | the union must
ration the available jobs | d. | all workers are better off | e. | more workers are
employed than at the competitive wage | | |
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17.
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In
Exhibit 0188, if a union raises the market wage to $4, total employment by the firm (in the
right-hand panel) will be a. | 10 workers | b. | 12
workers | c. | 600 workers | d. | 720
workers | e. | 800 workers | | |
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18.
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Assume an industrial union is formed and establishes the wage rate at $4 in Exhibit
0188. The reason the wage rate will not fall to the competitive equilibrium level is
that a. | all workers are
wealthier in disequilibrium | b. | nonunion workers are poorer than union
workers | c. | there is excess demand for labor at
equilibrium | d. | there is excess supply of labor at
equilibrium | e. | wages are determined by collective negotiation, not individual
negotiation | | |
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19.
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If an
industrial union is able to negotiate a wage above the market-clearing wage, the non-union wage in
other industries will a. | increase | b. | decrease | c. | increase, if the union can restrict the supply of
labor | d. | increase, if the union can increase the supply of
labor | e. | decrease due to the strike-breaking activity of the
firm | | |
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20.
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A
craft union is a union of workers in a. | the same firm | b. | the same
industry | c. | the same skilled profession | d. | different
skilled professions | e. | different trades | | |
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21.
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The
situation represented in Exhibit 0189 reflects all of the following employment conditions
except one. Which is the exception? a. | collective bargaining by an industrial union for higher wages
and benefits | b. | high union membership fees | c. | imposition of
qualifying exams for prospective workers | d. | imposition of long apprenticeship
periods | e. | restriction of employment to union
members | | |
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22.
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Exhibit 0189 reflects which of the following? a. | A union that is
restricting the supply of labor. | b. | A firm that is restricting the number of job
openings. | c. | The price of the good produced by this labor is
rising. | d. | The price of the good produced by this labor is
falling. | e. | The union that is creating an excess supply of
labor. | | |
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23.
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Craft
unions typically attempt to increase wages by a. | setting a wage floor | b. | reducing labor
supply | c. | increasing labor demand | d. | reducing
initiation fees | e. | expanding new union memberships | | |
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24.
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In
order to reduce labor supply, a union must be able to a. | do all of the
following | b. | force all employers in the industry to hire only union
members | c. | set wages | d. | agree to wage
concessions | e. | increase union membership | | |
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25.
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Of
the several ways that the United Auto Workers can increase the wages of its members, a. | none can also
increase employment | b. | only direct negotiation of a wage above the competitive level
can also increase employment | c. | only restricting the supply of labor can also increase
employment | d. | only increasing the demand for labor can also increase
employment | e. | only binding arbitration can also increase
employment | | |
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26.
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An
appeal to consumers to purchase union-made products represents an attempt to a. | increase the
supply of union labor | b. | increase the demand for union labor | c. | decrease the
supply of union labor | d. | decrease the quantity demanded of union
labor | e. | decrease the demand for union labor | | |
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27.
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It
may be that unions increase worker productivity by a. | minimizing
conflicts, resolving differences, and reducing job turnover | b. | using seniority
rules to keep the most experienced workers employed | c. | increasing job
turnover so that the least experienced workers quit | d. | allowing workers
to goof off, which improves morale | e. | increasing the number of workers required to perform each
task | | |
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28.
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The
union technique of creating unnecessary jobs is called a. | craft-based
negotiation | b. | an unfair labor practice | c. | an
injunction | d. | featherbedding | e. | a sit-down
strike | | |
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29.
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Which
of the following explains the recent decline in union membership in the United
States? a. | smaller
government safety nets | b. | slower technological change | c. | the change from
a manufacturing to a service-based economy | d. | increasing market concentration | e. | none of the
above | | |
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30.
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Unions are less likely to strike today than in the past because a. | real wages have
increased over the last 20 years | b. | employers are less willing to hire strike
breakers | c. | most workers in the U.S. are already union
members | d. | more workers, both union and nonunion, are willing to cross
picket lines | e. | many high-profile strikes (e.g., Caterpillar) have succeeded in
winning job security | | |
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