Question 1

​People make mistakes in allocating their time:

Accepted Answer

A)  only when leisure time is an inferior good.
B)  because the future is uncertain.
C)  more often when the cost of making a mistake is high.
D)  only when economists remove the assumption that individuals are rational.
E)  because information is free and readily available.F) A) and B)
G) All of the above

Question 2

Who is likely to earn a higher income, dentists or dental hygienists, and why?​

Accepted Answer

A)  Dental hygienists, because their education is less expensive.
B)  Dentists, because their education is less expensive.
C)  Dental hygienists, because their education is more expensive.
D)  Dentists, because their education is more expensive.
E)  Neither, because they usually earn the same wage rate.F) B) and C)
G) A) and B)

Question 3

Which of the following could explain why some professional basketball players earn a much higher income than their teammates?​

Accepted Answer

A)  There is discrimination among professional basketball players within the same team.
B)  Some professional basketball players are more talented than others.
C)  Not too many people can play basketball professionally.
D)  Many people want to become professional basketball players.
E)  The threat of injury makes the job more exciting than other jobs.F) B) and E)
G) D) and E)

Question 4

As the wage rate increases, the substitution effect causes workers to supply more time to market work and the income effect causes them to supply less time to market work.​

Accepted Answer

A) True 
 B)False

Question 5

The amount of time an individual is willing to sell on the labor market varies positively with the value of leisure time.​

Accepted Answer

A) True 
 B)False

Question 6

Because leisure is a normal good, an increase in income:​

Accepted Answer

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 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.F) B) and C)
G) B) and E)

Question 7

If a union negotiates a wage above the market equilibrium, each firm's:​

Accepted Answer

A)  supply of labor is greater than its marginal resource cost.
B)  supply of labor is less than its marginal resource cost.
C)  supply of labor is equal to its marginal resource cost.
D)  demand for labor is less than its marginal resource cost.
E)  demand for labor is greater than its marginal resource cost.F) B) and E)
G) None of the above

Question 8

​Unions can increase their wage rates by:

Accepted Answer

A)  increasing the supply of union labor.
B)  decreasing the demand of union labor.
C)  using the threat of a strike.
D)  decreasing the proportion of union workers in the industry.
E)  decreasing the demand for the product they produce.F) A) and B)
G) None of the above

Question 9

If an industrial union is able to negotiate a wage above the competitive market-clearing wage, employment in the industry will increase.​

Accepted Answer

A) True 
 B)False

Question 10

​Which of the following explains an increase in demand for labor?

Accepted Answer

A)  Additional training that increases the productivity of each unit of labor in a market
B)  An increase in the amount of risk associated with a job
C)  A decrease in the amount of risk associated with a job
D)  An improvement in the working conditions associated with a job
E)  A decline in the working conditions associated with a jobF) A) and E)
G) A) and D)

Question 11

​An industry with a strong union:

Accepted Answer

A)  will increase wages in the nonunion sector of the industry.
B)  will increase employment for union workers when wages increase.
C)  can force employers to hire all union members regardless of the wage.
D)  can increase the demand for union workers by increasing turnover and reducing productivity.
E)  can bargain for wages that are greater than the market's equilibrium wage.F) B) and C)
G) A) and E)

Question 12

​If an electricians' union is successful in its attempts to restrict entry into that craft, it will shift:

Accepted Answer

A)  the supply curve of electricians to the right.
B)  the supply curve of electricians to the left.
C)  the demand curve of electricians to the right.
D)  the demand curve of electricians to the left.
E)  both the supply and the demand curves for electricians.F) A) and C)
G) A) and B)

Question 13

Abby maximizes utility by allocating her time among leisure, market work, and nonmarket work so that the:​

Accepted Answer

A)  total utility of each is equal.
B)  average utility of each is equal.
C)  total utility per hour of each is equal.
D)  marginal utility per hour of each is equal.
E)  maximum amount of goods and services can be acquired.F) B) and C)
G) All of the above

Question 14

Along a backward-bending labor supply curve, the:​

Accepted Answer

A)  income effect always dominates the substitution effect.
B)  substitution effect always dominates the income effect.
C)  substitution effect is always equal to the income effect.
D)  substitution effect dominates the income effect at high wage rates.
E)  substitution effect dominates the income effect at low wage rates.F) C) and D)
G) C) and E)

Question 15

The figure given below shows a backward-bending labor supply curve for an individual. Along which part of the labor supply curve in the figure below does the income effect of a wage change outweigh the substitution effect? ​
Figure 12.1
​
​

Accepted Answer

A)  Between points a and b
B)  Between points a and c
C)  Between points b and c
D)  Between points b and d
E)  Between points c and dF) B) and C)
G) B) and E)

Question 16

Which of the following is not a form of nonmarket work?​

Accepted Answer

A)  Working on your car at home
B)  Doing your laundry in a laundromat
C)  Making bread for a dinner party at your sister's house
D)  Caring for your sister's children as a favor
E)  Babysitting for a feeF) A) and D)
G) A) and C)

Question 17

​Most collective bargaining agreements in the United States are reached:

Accepted Answer

A)  only after binding arbitration.
B)  only after a strike lasting at least a year.
C)  without a strike.
D)  only after a strike lasting at least three weeks.
E)  only after government intervention to avoid a strike.F) A) and C)
G) None of the above

Question 18

​Other things equal, the supply of labor will be lower to a job that:

Accepted Answer

A)  is prestigious.
B)  offers valuable on-the-job training.
C)  requires advanced skills or education.
D)  provides a climate-controlled work environment.
E)  allows for flexible work schedules.F) A) and E)
G) A) and D)

Question 19

​The threat of a strike:

Accepted Answer

A)  can serve as an incentive for labor and management to reach an agreement.
B)  destroys incentives for labor and management to reach an agreement.
C)  is usually not taken seriously because employers know the workers will suffer during a strike.
D)  is not taken seriously unless management expects to suffer.
E)  is not taken seriously even if public safety is at risk.F) C) and D)
G) A) and D)

Question 20

​If a teachers' union negotiates a wage for all college professors above the equilibrium wage rate, the market supply curve of college professors becomes _____.

Accepted Answer

A)  perfectly elastic everywhere
B)  perfectly inelastic everywhere
C)  horizontal, and then it slopes upward
D)  vertical, and it slopes upward
E)  upward sloping and then becomes horizontalF) None of the above
G) B) and C)

Exam 12: Labor Markets and Labor Unions

​Other things equal, the supply of labor will be lower to a job that:

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If an industrial union is able to negotiate a wage above the competitive market-clearing wage, employment in the industry will increase.​

Correct AnswerverifiedShow Answer

​Unions can increase their wage rates by:

Correct AnswerverifiedShow Answer

​If a teachers' union negotiates a wage for all college professors above the equilibrium wage rate, the market supply curve of college professors becomes _____.

Correct AnswerverifiedShow Answer

The figure given below shows a backward-bending labor supply curve for an individual. Along which part of the labor supply curve in the figure below does the income effect of a wage change outweigh the substitution effect? ​ Figure 12.1 ​ ​

Correct AnswerverifiedShow Answer

Which of the following is not a form of nonmarket work?​

Correct AnswerverifiedShow Answer

​Most collective bargaining agreements in the United States are reached:

Correct AnswerverifiedShow Answer

Abby maximizes utility by allocating her time among leisure, market work, and nonmarket work so that the:​

Correct AnswerverifiedShow Answer

Which of the following could explain why some professional basketball players earn a much higher income than their teammates?​

Correct AnswerverifiedShow Answer

Along a backward-bending labor supply curve, the:​

Correct AnswerverifiedShow Answer

As the wage rate increases, the substitution effect causes workers to supply more time to market work and the income effect causes them to supply less time to market work.​

Correct AnswerverifiedShow Answer

​If an electricians' union is successful in its attempts to restrict entry into that craft, it will shift:

Correct AnswerverifiedShow Answer

​People make mistakes in allocating their time:

Correct AnswerverifiedShow Answer

Because leisure is a normal good, an increase in income:​

Correct AnswerverifiedShow Answer

​The threat of a strike:

Correct AnswerverifiedShow Answer

​An industry with a strong union:

Correct AnswerverifiedShow Answer

​Which of the following explains an increase in demand for labor?

Correct AnswerverifiedShow Answer

If a union negotiates a wage above the market equilibrium, each firm's:​

Correct AnswerverifiedShow Answer

The amount of time an individual is willing to sell on the labor market varies positively with the value of leisure time.​

Correct AnswerverifiedShow Answer

Who is likely to earn a higher income, dentists or dental hygienists, and why?​

Correct AnswerverifiedShow Answer

Other things equal, the supply of labor will be lower to a job that:

Correct Answer
verified

If an industrial union is able to negotiate a wage above the competitive market-clearing wage, employment in the industry will increase.

Correct Answer
verified

Unions can increase their wage rates by:

Correct Answer
verified

If a teachers' union negotiates a wage for all college professors above the equilibrium wage rate, the market supply curve of college professors becomes _____.

Correct Answer
verified

The figure given below shows a backward-bending labor supply curve for an individual. Along which part of the labor supply curve in the figure below does the income effect of a wage change outweigh the substitution effect? Figure 12.1

Correct Answer
verified

Which of the following is not a form of nonmarket work?

Correct Answer
verified

Most collective bargaining agreements in the United States are reached:

Correct Answer
verified

Abby maximizes utility by allocating her time among leisure, market work, and nonmarket work so that the:

Correct Answer
verified

Which of the following could explain why some professional basketball players earn a much higher income than their teammates?

Correct Answer
verified

Along a backward-bending labor supply curve, the:

Correct Answer
verified

As the wage rate increases, the substitution effect causes workers to supply more time to market work and the income effect causes them to supply less time to market work.

Correct Answer
verified

If an electricians' union is successful in its attempts to restrict entry into that craft, it will shift:

Correct Answer
verified

People make mistakes in allocating their time:

Correct Answer
verified

Because leisure is a normal good, an increase in income:

Correct Answer
verified

The threat of a strike:

Correct Answer
verified

An industry with a strong union:

Correct Answer
verified

Which of the following explains an increase in demand for labor?

Correct Answer
verified

If a union negotiates a wage above the market equilibrium, each firm's:

Correct Answer
verified

The amount of time an individual is willing to sell on the labor market varies positively with the value of leisure time.

Correct Answer
verified

Who is likely to earn a higher income, dentists or dental hygienists, and why?

Correct Answer
verified