Economic Quiz

Question 1

1.

If a firm is a union shop, then

Answer

a. a worker may elect to either join or not join the union.   b. only workers who have been union members for two years may be employed.   c. only union members may be employed by the firm.   d. a non-union worker may be hired but must join the union within a certain time period.  

5 points    

Question 2

1.

The monopsonistic exploitation of labor refers to

Answer

a. the reduction in total output from monopoly in the product market.   b. the union wage differential.   c. workers being paid a wage less than their marginal revenue product.   d. the reduction in employment resulting from union wage setting.  

5 points    

Question 3

1.

A business enterprise in which employees must belong to the union before they can be hired is called a(n)

Answer

a. craft union.   b. industrial union.   c. closed shop.   d. union shop.  

5 points    

Question 4

1.

Bilateral monopoly exists when

Answer

a. a single buyer confronts a single seller.   b. there are two monopolistic buyers trying to buy resources.   c. two labor unions are trying to represent the same group of workers.   d. a firm is both a monopoly in its output market and a monopsonist in its input market.  

5 points    

Question 5

1.

When a group of workers forms a union, they introduce an element of

Answer

a. pure competition into the labor market.   b. monopoly into the labor market.   c. monopoly into the product market.   d. monopsony into the product market.  

5 points    

Question 6

1.

In the above figure, the monopsonist will employ

Answer

a. L2 at a wage of W2.   b. L2 at a wage of W3.   c. L1 at a wage of W1.   d. L1 at a wage of W3.  

5 points    

Question 7

1.

A union contract requiring elevator operators in a building with automatic elevators is an example of

Answer

a. a closed shop.   b. featherbedding.   c. a lockout.   d. a right-to-work requirement.  

5 points    

Question 8

1.

A right-to-work law makes it illegal for

Answer

a. employers to refuse to hire union workers.   b. union membership to be a requirement for continued employment in any establishment.   c. union membership to be denied on the basis of race, gender, or national origin.   d. a union to exist in a state.  

5 points    

Question 9

1.

A monopsonist firm has an upward-sloping supply curve because

Answer

a. diminishing marginal product to scale never exist in a monopsony.   b. each additional unit of labor costs less.   c. when more units of labor are hired, all laborers must receive the higher wage.   d. when more units of labor are hired, only the new workers receive the higher wage.  

5 points    

Question 10

1.

A monopsonist finds its profit maximizing quantity of labor employed at the point where

Answer

a. marginal revenue product is zero.   b. marginal revenue product equals marginal factor cost.   c. marginal factor cost is zero.   d. total cost equals total revenue.  

5 points    

Question 11

1.

Which of the following correctly describes the trend in U.S. union membership?

Answer

a. Union membership has been decreasing steadily since the 1930s.   b. Union membership decreased from 1930 – 1960, but has been increasing steadily since.   c. Union membership peaked in the 1960s and has been decreasing steadily since.   d. Union membership declined until the 1980s, but has been increasing steadily since.  

5 points    

Question 12

1.

A company can hire non-union workers, but a condition of their employment is that they must join the union within their first 90 days on the job. This is an example of a

Answer

a. right-to-work law.   b. closed-shop.   c. union shop.   d. voluntary craft union.  

5 points    

Question 13

1.

Consider the above figure, which displays the situation faced by a union employed by a firm with the labor demand curve D. This union has total membership of Q3 workers, but its single wage setting goal is to maximize wages for the Q1 members with the most seniority. If the union managers accomplish this goal, what occurs?

Answer

a. All of the union members will be employed at the wage rate W3.   b. All of the union members will be employed at the wage rate W1.   c. The senior members of the union will receive a wage equal to W3, but Q3union members will be unemployed.   d. The select group of senior union members will have work and receive a wage of W3, but Q3 -Q1 union members will not be employed by the firm.  

5 points    

Question 14

1.

Workers in the United States were granted the legal right to engage in collective bargaining by the

Answer

a. National Labor Relations Act.   b. Taft-Hartley Act.   c. Landrun-Griffin Act.   d. Knights of Labor Act.  

5 points    

Question 15

1.

The earliest unions in the United States were

Answer

a. industrial unions.   b. craft unions.   c. public-sector unions.   d. military unions.  

5 points    

Question 16

1.

According to the above table, the marginal factor cost of the fifth worker is

Answer

a. $5.00.   b. $3.00.   c. $4.50.   d. $15.00.  

5 points    

Question 17

1.

Which piece of legislation allowed states to pass right-to-work laws?

Answer

a. Wagner Act   b. Landrum-Griffin Act   c. Taft-Hartley Act   d. National Industrial Recovery Act  

5 points    

Question 18

1.

A firm that is a monopolist in the output market and a monopsonist in the input market

Answer

a. will hire the same amount of labor as if perfect competition prevailed in both markets, but pay a lower wage.   b. will restrict the level of output but not that of employment compared to the perfectly competitive case.   c. will hire less labor but pay the same wage compared to the perfectly competitive case.   d. will hire less labor and pay a lower wage compared to the perfectly competitive case.  

5 points    

Question 19

1.

The United Auto Workers is an example of

Answer

a. a public-sector union.   b. a craft union.   c. an industrial union.   d. a socialist union.  

5 points    

Question 20

1.

A monopsonist is

Answer

a. a single buyer.   b. a single seller.   c. one of a few firms that face a unionized labor market.   d. a non-profit-maximizing firm.  

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