Question 1

Non-pecuniary factors in union jobs are usually

Accepted Answer

A)   roughly equal to those in non-union jobs.
B)   preferable in union jobs, due to negotiations.
C)   preferable in union jobs, due to threats to strike.
D)   preferable in non-union jobs.

Question 2

Unions usually have which of the following effects?

Accepted Answer

A)   increase the profits of the firms unionized by motivating workers to work harder
B)   increase the growth rate of employment in unionized firms as more workers are attracted to unionized jobs
C)   increase the fraction of total compensation paid in the form of employee benefits
D)   decrease the total compensation of unionized workers

Question 3

Threat effects are

Accepted Answer

A)   increases in union wages from threats to strike.
B)   increases in non-union wages from threats to unionize.
C)   decreases in union wages from management threats to use replacement workers during a strike.
D)   decreases in non-union wages from the threat of replacement by unemployed union members.

Question 4

The ________ Act established the National Labor Relations Board and required employers to bargain with lie-union that represents the majority of their employees.

Accepted Answer

A)   Norris-LaGuardia
B)   Wagner
C)   Taft-Hartley
D)   Landrum-Griffin

Question 5

A union raises the wage of firm X from $10 to $15 an hour. In which of these cases is there a direct reduction in the social welfare?

Accepted Answer

A)   Worker A retains their job at company X, such that company X's profits associated with worker A go down $5 an hour.
B)   Worker B, working for firm Y gets a lower wage due to the spill-over effect.
C)   Worker C, who is getting $7 an hour working for firm Z would have otherwise have gotten a job with firm X at a wage of $8.
D)   Worker D, who is working for firm M, gets a higher wage due to the threat effect.

Question 6

If both parties become more risk averse, then the contract zone will

Accepted Answer

A)   increase in size.
B)   decrease in size.
C)   not change in size.
D)   move to the right along the horizontal axis.

Question 7

Which of the following statements is generally true about unions?

Accepted Answer

A)   Unions raise wages in the range from 30 to 40%.
B)   Public sector unions raise wages more than private sector unions.
C)   The union wage advantage is higher in Europe than it is in the United States.
D)   Unions reduce the dispersion of earnings among workers.

Question 8

Estimating the effect of unions on wages is difficult because

Accepted Answer

A)   data on wages in union and non-union jobs are scarce.
B)   relative wage effects are often indeterminate.
C)   there is no way to estimate what wages would be if unions did not exist.
D)   unions have no effect on the non-union segment of the labor market.

Question 9

Suppose that a union increases wages by 10% but that the impact of this is exactly offset by the union also increasing labor productivity by 10%. Which of the following will occur if the firm can freely set employment levels?

Accepted Answer

A)   Employment will fall by 10%.
B)   The cost of output will go up 10%.
C)   Demand for output will go up by more than 10% if the price elasticity of demand is greater than one.
D)   The firm will substitute labor for capital.

Question 10

A vertical contract curve implies that

Accepted Answer

A)   both firm and workers are receiving economic rents.
B)   union wage increases will cause large losses in employment.
C)   the firm's output will increase when wages rise.
D)   the firm operates in a perfectly competitive product market.

Question 11

Many unions have favored import quotas and tariffs because

Accepted Answer

A)   they want to shift demand towards the goods they produce.
B)   they are trying increase the welfare of all Americans.
C)   they want their employers to substitute labor for capital and other inputs.
D)   All of the above.

Question 12

Increases in the minimum wage can help unions by

Accepted Answer

A)   increasing the welfare of non-union workers.
B)   increasing the demand for labor.
C)   increasing costs faced by employers.
D)   increasing the cost of substituting non-union labor for union labor.

Question 13

The potential gains to a union in terms of wages and employment will be greatest if the firm's demand for labor is

Accepted Answer

A)   elastic.
B)   inelastic.
C)   of unit elasticity.
D)   horizontal. B

Question 14

Suppose a study found that union wages were 10% higher than nonunion wages. Unions will have actually raised wages by more than 10% when

Accepted Answer

A)   union workers who lost their jobs found work in the nonunion sector.
B)   consumers shifted their demand to the lower priced nonunion goods.
C)   nonunion employers raised their wages in response to the threat of being unionized.
D)   union workers are more productive workers than nonunion workers.

Question 15

If attitudes change and unions are perceived as dangerous to American companies' ability to compete in the world market, then

Accepted Answer

A)   the demand curve for union services will shift to the left.
B)   the demand curve for union services will shift to the right.
C)   we will move to the left along the demand curve for union services.
D)   we will move to the right along the demand curve for union services. A

Question 16

Which of the following best describes the economic nature of a union?

Accepted Answer

A)   a monopoly
B)   a monopsonist
C)   a producer of public goods
D)   an agency assuring workers get wage reflecting their supply price of labor. A

Question 17

Unions tend to

Accepted Answer

A)   increase wages for white-collar and blue-collar members by roughly the same amount relative to non-union workers.
B)   increase relative wages more for blue-collar workers.
C)   increase relative wages more for white-collar workers.
D)   encourage high levels of education and training for their members.

Question 18

In the imperfect information model, employers who provide better information about their profitability to their employees

Accepted Answer

A)   should see a decrease in frequency of strikes, but an increase in duration.
B)   should see an increase in frequency of strikes, but a decrease in duration.
C)   should see an increase in both frequency and duration of strikes.
D)   should see a decrease in both frequency and duration of strikes.

Question 19

Unionization rates in the United States are highest

Accepted Answer

A)   among white workers.
B)   among young workers.
C)   in the government sector.
D)   in the manufacturing sector.

Question 20

The relative union wage advantage is generally

Accepted Answer

A)   about 50% in the United States.
B)   smaller in the United States than in Europe.
C)   larger in the public sector than in the private sector.
D)   larger during recessions.

Exam 13: Unions and the Labor Market

Non-pecuniary factors in union jobs are usually

Correct AnswerverifiedShow Answer

Unions usually have which of the following effects?

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Threat effects are

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The ________ Act established the National Labor Relations Board and required employers to bargain with lie-union that represents the majority of their employees.

Correct AnswerverifiedShow Answer

A union raises the wage of firm X from $10 to $15 an hour. In which of these cases is there a direct reduction in the social welfare?

Correct AnswerverifiedShow Answer

If both parties become more risk averse, then the contract zone will

Correct AnswerverifiedShow Answer

Which of the following statements is generally true about unions?

Correct AnswerverifiedShow Answer

Estimating the effect of unions on wages is difficult because

Correct AnswerverifiedShow Answer

Suppose that a union increases wages by 10% but that the impact of this is exactly offset by the union also increasing labor productivity by 10%. Which of the following will occur if the firm can freely set employment levels?

Correct AnswerverifiedShow Answer

A vertical contract curve implies that

Correct AnswerverifiedShow Answer

Many unions have favored import quotas and tariffs because

Correct AnswerverifiedShow Answer

Increases in the minimum wage can help unions by

Correct AnswerverifiedShow Answer

The potential gains to a union in terms of wages and employment will be greatest if the firm's demand for labor is

Correct AnswerverifiedB

Suppose a study found that union wages were 10% higher than nonunion wages. Unions will have actually raised wages by more than 10% when

Correct AnswerverifiedShow Answer

If attitudes change and unions are perceived as dangerous to American companies' ability to compete in the world market, then

Correct AnswerverifiedA

Which of the following best describes the economic nature of a union?

Correct AnswerverifiedA

Unions tend to

Correct AnswerverifiedShow Answer

In the imperfect information model, employers who provide better information about their profitability to their employees

Correct AnswerverifiedShow Answer

Unionization rates in the United States are highest

Correct AnswerverifiedShow Answer

The relative union wage advantage is generally

Correct AnswerverifiedShow Answer

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A

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