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GWU / Economics / ECON 1101 / irene foster gwu

irene foster gwu

irene foster gwu

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If (union) collective bargaining with the monopsony guarantees the wage rate that workers will be paid is W2, then how many more workers will the monopsony hire than it would hire if it could pay its chosen (or preferred) wage?




In the absence of collective bargaining, what quantity of labor does the profit-maximizing monopsonist hire?




In the absence of collective bargaining, what wage rate would the profit-maximizing monoposonist pay?



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t of 2 points  Among the stated objectives of the National Collegiate Athletic Association  (NCAA) regulations is to Answer  Selected Answer:  maintain the amateur standing of college athletes.  Correct Answer:  all of the above  • Question 2  0 out of 2 points  A possible objective of labor unions is Answer  Selected Answer:  all of the above  Correct Answer:  employment for all their members.  • Question 3  0 out of 2 points  Exhibit 28-8 Refer to Exhibit 28-8. In the absence of collective bargaining, what wage rate  would the profit-maximizing monoposonist pay? Answer Selected Answer:  W1  Correct Answer:  W5  • Question 4  0 out of 2 points  If a union seeks to maximize the total wage bill received by its members, then  it Answer  Selected Answer:  should seek to establish the highest possible wage rate.  Correct Answer:  none of the above  • Question 5  2 out of 2 points  Which of the following statements is true? Answer  Selected Answer:  The more the substitute factors for union labor, the higher the elasticity of  demand for union labor, and the larger the cutback in union labor for any  given wage increase.  Correct Answer:  The more the substitute factors for union labor, the higher the elasticity of  demand for union labor, and the larger the cutback in union labor for any  given wage increase. • Question 6  0 out of 2 points  Which of the following will make the cutback in union labor for a given wage  increase smaller? Answer  Selected Answer:  an increase in the number of substitutes for union labor  Correct Answer:  a decrease in the elasticity of demand for the product that labor produces  • Question 7  2 out of 2 points  An American labor union worker has a picket sign that reads "Say No to  Tokyo, Buy American." Most likely, the worker is trying to Answer  Selected Answer:  increase demand for the product he or she produces.  Correct Answer:  increase demand for the product he or she produces.  • Question 8  2 out of 2 points  Exhibit 28-3 Refer to Exhibit 28-3. Consider the monopsony setting. In the absence of  collective bargaining, what quantity of labor does the profit-maximizing  monopsonist hire? Answer  Selected Answer:  Q1  Correct Answer:  Q1 • Question 9  0 out of 2 points  Exhibit 28-9 Refer to Exhibit 28-9. Let DA and DB represent demand for labor curves  facing unions A and B, respectively. As a result of their efforts, both unions  succeed in increasing the wage rate from W1 to W2. In terms of the wage employment trade-off, the wage increase Answer Selected Answer:  had a larger impact on employment for union B than for union A.  Correct Answer:  had a larger impact on employment for union A than for union B.  • Question 10  0 out of 2 points  Exhibit 28-5 Refer to Exhibit 28-5. In which of the following cases has the increase in the  wage from W1 to W2 been brought about by a prolonged successful training  program undertaken by the union for the benefit of its members? Answer Selected Answer:  (1)  Correct Answer:  (2)  • Question 11  2 out of 2 points  Exhibit 28-12 (1) (2) (3)  Number of Workers Wage Rate Marginal Revenue Product  1 $20 $45  2 $21 $37  3 $22 $33  4 $23 $30  5 $24 $28  6 $25 $19    Refer to Exhibit 28-12. As the firm increases employment from 3 to 4  workers, its marginal factor cost (MFC) is Answer  Selected Answer:  $26.  Correct Answer:  $26.  • Question 12  0 out of 2 points  Sometimes labor unions try to increase the demand for the product they  produce. They do so because the demand for labor is derived; and the  __________ the demand for the product labor produces, the __________labor  and the __________ wages will be, ceteris paribus. Answer  Selected Answer:  higher; lower the demand for; higher  Correct Answer:  higher; higher the demand for; higher • Question 13  2 out of 2 points  A "closed shop" is Answer  Selected Answer:  an organization in which an employee must belong to the union before he or  she can be hired.  Correct Answer:  an organization in which an employee must belong to the union before he or  she can be hired.  • Question 14  2 out of 2 points  Exhibit 28-11 Refer to Exhibit 28-11. The firm in the exhibit is a monopsony. We have  deliberately not identified the three curves in the exhibit. They are simply  curves 1, 2, and 3. If (union) collective bargaining with the monopsony  guarantees the wage rate that workers will be paid is W2, then how many  more workers will the monopsony hire than it would hire if it could pay its  chosen (or preferred) wage? Answer Selected Answer:  Q2 - Q1 more workers  Correct Answer:  Q2 - Q1 more workers  • Question 15  2 out of 2 points  In a perfectly competitive industry, do higher wages for labor union members  diminish profits? Answer  Selected Answer:  Yes, in the short run, but not in the long run, in which some firms exit the  industry because of higher costs.  Correct Answer:  Yes, in the short run, but not in the long run, in which some firms exit the  industry because of higher costs.  • Question 16  0 out of 2 points  Exhibit 28-3 Refer to Exhibit 28-3. Consider the monopsony setting. In the absence of  collective bargaining, what wage rate does the profit-maximizing  monopsonist pay? Answer  Selected Answer:  W2  Correct Answer:  W1 • Question 17  0 out of 2 points  Labor unions have caused Answer  Selected Answer:  the fraction of national income that goes to labor (union and nonunion,  combined) to decrease.  Correct Answer:  almost no change in the fraction of national income that goes to labor (union  and nonunion, combined).  • Question 18  2 out of 2 points  If a labor union specifies that certain jobs can only be done by certain people  (for example, only electricians can do electrical work), it is likely trying to Answer  Selected Answer:  a and b  Correct Answer:  a and b  • Question 19  2 out of 2 points  The Taft-Hartley Act allowed states the right to Answer  Selected Answer:  pass right-to-work laws.  Correct Answer:  pass right-to-work laws. • Question 20  0 out of 2 points  As long as there are advancements in technology, some workers will be  temporarily displaced. Answer  Selected Answer: False  Correct Answer: True  • Question 21  2 out of 2 points  If union action leads to a rise in the relative price of factors that are substitutes  for union labor, Answer  Selected Answer:  the demand for union labor rises.  Correct Answer:  the demand for union labor rises.  • Question 22  2 out of 2 points  A profit-maximizing monopsonist will pay a wage rate that is less than the  marginal factor cost. Answer  Selected Answer: True  Correct Answer: True • Question 23  2 out of 2 points  Exhibit 28-7 (1) Quantity of (2) (3) Marginal Revenue  Labor Wage per worker Product of Labor  10 $10 $25  20 11 22  30 12 18  40 13 16  50 14 12  60 15 8    Refer to Exhibit 28-7. For each quantity of labor hired (after the first worker),  marginal factor cost (MFC) will Answer  Selected Answer:  exceed column (2).  Correct Answer:  exceed column (2).  • Question 24  2 out of 2 points  If a firm is a monopsonist, then it faces Answer  Selected Answer:  an upward sloping factor supply curve, and its marginal factor cost curve will  lie above the factor supply curve.  Correct Answer:  an upward sloping factor supply curve, and its marginal factor cost curve will  lie above the factor supply curve. • Question 25  0 out of 2 points  Exhibit 28-12 (1) (2) (3)  Number of Workers Wage Rate Marginal Revenue Product  1 $20 $45  2 $21 $37  3 $22 $33  4 $23 $30  5 $24 $28  6 $25 $19    Refer to Exhibit 28-12. The profit-maximizing number of workers to hire for  this firm is Answer  Selected Answer:  3.  Correct Answer:  5.  • Question 1  1 out of 1 points  Which of the following statements is true?Selected Answer: c.  The lower the elasticity of demand for cars, the lower the elasticity of demand for the  workers that produce cars.  Answers: a.  The lower the elasticity of demand for cars, the higher the elasticity of demand for the  workers that produce cars.  b.  The higher the elasticity of demand for cars, the lower the elasticity of demand for the  workers that produce cars.  c.  The lower the elasticity of demand for cars, the lower the elasticity of demand for the  workers that produce cars.  d.  The fewer the substitute factors for union labor, the higher the elasticity of demand for union  labor.  e.  c and d  • Question 2  0 out of 1 points  In your textbook there is an exhibit that shows (for selected industries) the median weekly  earnings of workers represented by labor unions and the median weekly earnings of workers  not represented by labor unions. The point to be made by this comparison is that in some  cases,Selected Answer: c.  union workers earn more than nonunion workers.  Answers: a.  nonunion workers earn more than union workers (which is different from what most people  expect).  b.  nonunion workers and union workers earn the same.  c.  union workers earn more than nonunion workers.  d.  the number of union workers is greater than the number of nonunion workers.  e.  a and c  • Question 3  1 out of 1 points  Labor unions tend to favor strictly enforced immigration laws with the intention of lowering  the elasticity of demand for union labor. Selected Answer: True  Answers: True   False • Question 4  1 out of 1 points  Exhibit 28-5 Refer to Exhibit 28-5. In which case or cases does the increase in the wage rate from W1 to  W2 definitely cause the total wage bill to rise?Selected Answer: d.  (2)  Answers: a.  (1) and (3)  b.  (1) and (2)  c.  (1)  d.  (2)  e.  (3)  • Question 5  1 out of 1 points  Exhibit 28-1 Refer to Exhibit 28-l. Four demand curves for labor are displayed: D1, D2, D3, and  D4. Which provides the least pronounced wage-employment tradeoff? Selected Answer: a.  D1  Answers: a.  D1  b.  D2  c.  D3  d.  D4  • Question 6  1 out of 1 points  Which of the following is not consistent with the view of labor unions as a collective voice?1 out of 1 points  Selected Answer: a.  Labor productivity declines as a result of labor unions  Answers: a.  Labor productivity declines as a result of labor unions  b.  The worker turnover rate is reduced by labor unions.  c.  Workers feel more secure in their jobs as a result of labor unions.  d.  Unions reduce job exiting.  • Question 7  Exhibit 28-10 Refer to Exhibit 28-10. If the firm in the exhibit is a monopsony, it will hire __________  quantity of labor and pay its workers the wage rate of __________.Selected Answer: b.  Q2; W1  Answers: a.  Q2; W3  b.  Q2; W1  c.  Q1; W2  d.  Q1; W4  e.  none of the above  • Question 8  1 out of 1 points  "Collective bargaining" refers to Selected Answer: a.  negotiations between labor unions and management about wage rates and other issues.  Answers: a.  negotiations between labor unions and management about wage rates and other issues.  b.  negotiations among labor unions over jurisdictional control.  c.  negotiations between labor, management, and government over the drafting of labor laws.  d.  b and c  e.  none of the above • Question 9  0 out of 1 points  Exhibit 28-8 Refer to Exhibit 28-8. What is the total wage bill of the profit- maximizing monoposonist?Selected Answer: d.  W4 x Q5  Answers: a.  W2 x Q3  b.  W3 x Q2  c.  W5 x Q3  d.  W4 x Q5  • Question 10  1 out of 1 points  Exhibit 28-12 (1) (2) (3)  Number of Workers Wage Rate Marginal Revenue Product  1 $20 $45  2 $21 $37  3 $22 $33  4 $23 $30  5 $24 $28  6 $25 $19  Refer to Exhibit 28-12. The profit-maximizing number of workers to hire for this firm is Selected Answer: d.  5.  Answers: a.  2.  b.  3.  c.  4.  d.  5.  e.  6.  • Question 11  0 out of 1 points  Unions generally call for __________ the barriers against foreign trade, as a way of  __________ the elasticity of demand for union labor.0 out of 1 points  Selected Answer: c.  raising; increasing  Answers: a.  lowering; increasing  b.  raising; decreasing  c.  raising; increasing  d.  lowering; decreasing  • Question 12  Exhibit 28-8 Refer to Exhibit 28-8. An effective price floor set at W3 wouldSelected Answer: a.  decrease employment from Q5 to Q4.  Answers: a.  decrease employment from Q5 to Q4.  b.  increase employment from Q3 to Q4.  c.  increase employment from Q1 to Q2.  d.  decrease employment from Q5 to Q2.  • Question 13  0 out of 1 points  Successful collective bargaining (on the part of a labor union) will Selected Answer: b.  decrease the demand for labor.  Answers: a.  increase the demand for labor.  b.  decrease the demand for labor.  c.  change the marginal physical product of labor.  d.  a and c  e.  none of the above  • Question 14  1 out of 1 points  It is unlikely that very many (pure) monopsony firms exist today, given that workers are  increasingly mobile.1 out of 1 points  Selected Answer: True  Answers: True   False  • Question 15  Exhibit 28-2 Refer to Exhibit 28-2. One of the things that the labor union probably can do to convince  management that the supply curve is S'S instead of SS isSelected Answer: a.  make a credible threat of a strike.  Answers: a.  make a credible threat of a strike.  b.  ask workers to take a cut in fringe benefits.  c.  try to maximize the wage bill to the union.  d.  try to maximize membership in the union.  • Question 16  1 out of 1 points  Exhibit 28-10 Refer to Exhibit 28-10. If the firm in the exhibit is a monopsony, then the difference  between its marginal factor cost and the wage rate it pays is equal toSelected Answer: a.  W3 - W1.  Answers: a.  W3 - W1.  b.  There is no difference between the marginal factor cost and the wage rate a monopsony  pays.  c.  W3 - W2.  d.  W4 - W2.  e.  W4 - W1.  • Question 17  1 out of 1 points  A "closed shop" is Selected Answer: b.  an organization in which an employee must belong to the union before he or she can be  hired.  Answers: a.  an organization in which a worker is not required to be a member of the union to be hired,  but must become a member within a certain period of time after being employed.  b.  an organization in which an employee must belong to the union before he or she can be  hired.  c.  an organization of domestic firms that is closed to foreign firms.  d.  a political organization that seeks to raise tariffs on foreign-produced goods imported into  the United States.  e.  none of the above  • Question 18  1 out of 1 points  In collective bargaining,0 out of 1 points  Selected Answer: d.  a and c  Answers: a.  union members act together as a single unit.  b.  each union member represents herself in labor-management negotiations.  c.  the objective of the union is to increase its bargaining power with management.  d.  a and c  e.  b and c  • Question 19  Which of the following statements is true? Selected Answer: d.  b and c  Answers: a.  The union-as-collective-voice view of the labor union holds that labor unions have a  negative impact on productivity and efficiency.  b.  The traditional view of the labor union is that the union acts as a collective voice for  workers and probably leads to lower quit rates (among employees).  c.  The union-as-collective-voice view of the labor union holds that labor unions often have  unnecessary staffing requirements, which means that they insist that only certain persons be  allowed to do certain jobs.  d.  b and c  e.  none of the above • Question 20  1 out of 1 points  As long as there are advancements in technology, some workers will be temporarily  displaced. Selected Answer: True  Answers: True   False  • Question 21  1 out of 1 points  Exhibit 28-12 (1) (2) (3)  Number of Workers Wage Rate Marginal Revenue Product  1 $20 $45  2 $21 $37  3 $22 $33  4 $23 $30  5 $24 $28  6 $25 $19  Refer to Exhibit 28-12. As the firm increases employment from 4 to 5 workers, its marginal  factor cost (MFC) isSelected Answer: d.  $28.  Answers: a.  $13.  b.  $15.  c.  $5.60.  d.  $28.  • Question 22  1 out of 1 points  Some economists refer to a monopsony as a Selected Answer: e.  buyer's monopoly.  Answers: a.  Economists don't refer to a monopsony as anything other than a monopsony.  b.  factor buyer.  c.  single-price monopolist.  d.  factor price taker.  e.  buyer's monopoly.  • Question 23  1 out of 1 points  Research by H. Gregg Lewis shows that over the period 1929-1979,Selected Answer: a.  the average wage of union members was 10 to 15 percent higher than that of comparable  nonunion labor.  Answers: a.  the average wage of union members was 10 to 15 percent higher than that of comparable  nonunion labor.  b.  the average wage of union members was 10 to 15 percent lower than that of comparable  nonunion labor.  c.  labor unions increased productivity.  d.  labor unions decreased productivity.  e.  none of the above  • Question 24  1 out of 1 points  Exhibit 28-12 (1) (2) (3)  Number of Workers Wage Rate Marginal Revenue Product  1 $20 $45  2 $21 $37  3 $22 $33  4 $23 $30  5 $24 $28  6 $25 $19  Refer to Exhibit 28-12. As the firm increases employment from 3 to 4 workers, its marginal  factor cost (MFC) isSelected Answer: b.  $26.  Answers: a.  $7.50.  b.  $26.  c.  $48.  d.  $13.  • Question 25  1 out of 1 points  Labor union A faces a greater cutback in labor for a given wage increase than does labor  union B. It follows that the Selected Answer: d.  elasticity of demand for workers in labor union A is greater than the elasticity of demand for  workers in labor union B.  Answers: a.  demand for workers in labor union A is greater than the demand for workers in labor union  B.  b.  elasticity of demand for workers in labor union B is greater than the elasticity of demand for  workers in labor union A.  c.  demand for workers in labor union B is greater than the demand for workers in labor union  A.  d.  elasticity of demand for workers in labor union A is greater than the elasticity of demand for  workers in labor union B.  e.  a and d

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