90. The government operates programs for job training and job information intended to reduce unemployment.

C. Some economists claim that the government can do these things no better than firms and individuals could do them for themselves.

A.Almost all economists agree that such programs are of no use.

B.Almost all economists agree that such programs work very well.

D.None of the above are correct.

91. We would predict that the more generous unemployment compensation a country has,

C. the longer the duration of each spell of unemployment, and the higher the unemployment rate.

A.the shorter the duration of each spell of unemployment, and the higher the unemployment rate.

B.the shorter the duration of each spell of unemployment, and the lower the unemployment rate.

D.the longer the duration of each spell of unemployment, and the lower the unemployment rate.

92. Compared to the United States, Germany has higher unemployment rates. The cause of much of this difference seems to be attributable to

C. high unemployment insurance.

B.a government that spends very little.

D.the refusal of German firms to set wages according to efficiency wage theory.

94. Economists have found evidence that receiving unemployment-insurance benefits

A.decreases the job-search effort of the unemployed.

B.has no effect on the job-search effort of the unemployed.

C. increases the job-search effort of the unemployed.

D.has an uncertain affect on the job-search effort of the unemployed.

95. Unemployment insurance

A.reduces search effort and raises unemployment

B.reduces search efforts and lowers unemployment

C. increases search effort and raises unemployment

D.increases search effort and decreases unemployment

96. Most economists agree that eliminating unemployment insurance would

D.reduce unemployment, but they disagree about whether economic well-being would be enhanced by such a change.

A.increase unemployment because people would quit jobs they thought were not secure.

B.increase unemployment because if the government didn’t provide unemployment insurance, private firms would offer superior insurance.

C. reduce unemployment and so improve economic well-being.

97. An increase in the world price of oil would create a sectoral shift that would likely

C. increase unemployment, and the increase would be greater in a country with unemployment insurance than in one without.

A.decrease unemployment, and the decrease would be greater in a country with unemployment insurance than in one without.

B.decrease unemployment, but the decrease would be smaller in a country with unemployment insurance than in one without.

D.increase unemployment, but the increase would be smaller in a country with unemployment insurance than in one without.

98. Consumers decide to buy more computers and fewer typewriters. As a result, computer companies expand production while typewriter companies lay-off workers. This is an example of

C. frictional unemployment created by a sectoral shift in demand.

B.cyclical unemployment created by a recession.

D.None of the above are correct.

99. Which of the following is correct?

C. A typical unemployed worker near the end of the time in which she can receive benefits increases her job search efforts.

A.Unemployment insurance raises structural unemployment because it reduces the job search of the unemployed.

B.Most economists are skeptical of the value of unemployment insurance because they believe that it results in a poorer match between workers and jobs.

100. An increase in the minimum wage would

D.decrease the quantity of labor demanded while increasing the quantity supplied.

A.increase both the quantity demanded and the quantity supplied of labor.

B.decrease both the quantity demanded and the quantity supplied of labor.

C. increase the quantity of labor demanded while decreasing the quantity supplied.

101. If the minimum wage was currently above the equilibrium wage, than a decrease in the minimum wage would

C. increase the quantity of labor demanded and decrease the quantity supplied.

A.increase both the quantity demanded and the quantity supplied of labor.

B.decrease both the quantity demanded and the quantity supplied of labor.

D.decrease the quantity of labor demanded and increase the quantity supplied.

102. There will be structural unemployment if

A.some wages are kept above the equilibrium level.

B.some people choose not to work at the equilibrium wage.

C. some wages are below the equilibrium level.

D.All of the above could be correct.

103. Minimum-wage laws

B.probably reduce teenage employment.

A.are the major cause of natural unemployment.

C. mainly affect skilled workers.

D.None of the above are correct.’

104. Which of the following would be associated with the type of unemployment created by the minimum wage law?

B.Fred decides to close his Thai restaurant because he cannot afford to pay workers the going wage.

A.Greg quits his job as a grocery cashier because he would rather work at the library.

C. In hopes of earning higher income Bruce goes back to trade school to get further training.

D.Liz pays the workers for her plumbing and heating company more than the equilibrium wage because she believes it will make them work harder.

112. Collective bargaining refers to

D.the process by which unions and firms agree on the terms of employment.

A.the process by which the government sets exemptions from the minimum wage law.

B.setting the same wage for all employees to prevent jealousy among workers.

C. firms colluding to set the wages of employees in order to keep them below equilibrium.

115. Which of the following is incorrect?

B.Union workers typically earn 20 to 30 percent more than similar nonunionized workers.

C. The power of a union comes from its ability to strike if its demands are not met.

D.Workers in unions reap the benefits of collective bargaining, while workers not in unions bear some of the cost.

117. When a union bargains successfully with employers, in that industry

C. the quantity of labor supplied increases and the quantity of labor demanded decreases.

A.both the quantity of labor supplied and the quantity of labor demanded increase.

B.both the quantity of labor supplied and the quantity of labor demanded decrease.

D.the quantity of labor supplied increases the quantity of labor demanded decreases.

118. When a union bargains successfully with an employer, in that industry

A.unemployment and wages increase.

B.unemployment and wages decrease.

C. unemployment decreases and wages increase.

D.unemployment increases and wages decrease.

119. Unemployment insurance

C. creates frictional unemployment and unions create structural unemployment.

A.and unions both create structural unemployment.

B.and unions both create frictional unemployment.

D.creates structural unemployment and unions create frictional unemployment.

120. When unions raise wages in some sectors of the economy, the supply of labor in other sectors of the economy

D.increases, reducing wages in industries that are not unionized.

A.decreases, raising wages in industries that are not unionized.

B.decreases, reducing wages in industries that are not unionized.

C. increases, raising wages in industries that are not unionized.

121. Suppose that in some country neither textile workers nor shoemakers are unionized. If textile workers unionize and so are able to raise their wages, then

C. the supply of shoemakers will rise, and their wages will fall.

A.the demand for shoemakers will rise, and their wages will rise.

B.the demand for shoemakers will fall, and their wages will fall.

D.the supply of shoemakers will fall, and their wages will rise.

123. The National Labor Relations Board

B.enforces workers' rights to unionize.

A.enforces antitrust laws against unions.

C. for a fee will act as a union’s representative in collective bargaining.

D.is required to approve all collective bargaining agreements before they can be enforce.

124. Right-to-work laws

B.give workers in a unionized firm the right to choose whether or not to join the union.

A.guarantee workers the right to form unions.

C. prevent employers from hiring permanent replacements for workers who are on strike.

D.say that workers can not be fired because of increases in wages brought about by collective bargaining.

125. In the absence of right-to-work laws, workers

B.would have to join the union if they worked for a unionized firm.

A.that went on strike could not be permanently replaceD.

C. would not be able to unionize.

126. Which of the following is an example of a violation of right-to-work laws?

A.Musicians agree to join a union. Even though he voted against the union, Ricky must join it.

B.Lucy is willing to work at the candy factory while the other workers are on strike, but the union does not permit it.

C. Fred and his co-workers are not allowed by their firm to form a union.

D.Because Ethel belongs to a union she can’t bargain for her own salary increases; she must bargain with the rest of the union.

127. Which of the following is correct?

B.Unions raise wages above the competitive equilibrium level.

A.All economists believe that unions are bad for the economy as a whole.

C. Unions increase the level of employment in unionized firms.

D.Unions decrease the level of employment in nonunionized firms.

D.cause wages of nonunionized workers to fall.

A.do not increase the natural rate of unemployment.

B.do not raise the wages of workers in the union.

C. raise the profits of firms they work for.

129. If U.S. antitrust laws were applied to unions,

B.the natural rate of unemployment rate would decrease, ceteris paribus.

A.the natural rate of unemployment rate would increase, ceteris paribus.

C. the natural rate of unemployment rate would not change.

D.the effect on the natural rate of unemployment rate is uncertain.

130. Which of the following is correct?

D.There is no consensus among economists about whether unions are good or bad for the economy.

A.There is consensus among economists that unions are good for the economy.

B.There is consensus among economists that unions are bad for the economy.

C. There is consensus among economists that, on net, unions have almost no impact on macroeconomic variables.

131. The theory of efficiency wages explains why

B.it may be in the best interest of firms to offer wages that are above the equilibrium level.

A.setting wages at the equilibrium level may increase unemployment.

C. the most efficient way to pay workers is to pay them according to their skills.

D.it is efficient for firms to set wages at the equilibrium level.

132. Sarah is the CEO of a corporation that hires nonunion labor. According to the theory of efficiency wages, if she decides to pay her workers more than the competitive equilibrium wage,

A.the profits of her firm may increase.

B.the higher wages will induce her workers to shirk.

C. the turnover of her workers may increase.

D.she will face a shortage of labor.

133. Samantha, the CEO of a corporation operating in Uganda, decides to raise the wages of her workers even though she faces an excess supply of labor. Her decision

A.might increase profits if it means that the wage is high enough for her workers to eat a nutritious diet that makes them more productive.

B.will help eliminate the excess supply of labor if she raises it sufficiently.

C. will cause unemployment to fall.

134. Arnie is the owner of a firm that produces bottled water in Washington state. There are many such firms in the area. Arnie decides that if he pays his workers a wage higher than the going market wage, his profits will increase. Which of the following is a likely explanation for his decision?

A.The higher the wage, the less often his workers will choose to leave his firm.

B.The higher the wage, the lower will be the cost of obtaining needed supplies.

C. The higher the wage, the more he can charge for his water.

D.All of the above are likely explanations for Arnie's decision.

135. Mary Sue is the newly appointed CEO of a company that manufactures CD drives on an assembly line. Her staff has told her that the output the firm produces, given the number of workers employed, indicates that some workers may be shirking. According to efficiency wage theory, what should she do?

A.pay all workers more than the equilibrium wage rate

B.pay all workers below the equilibrium wage rate to make up for the loss from shirking

C. make sure that workers are getting paid exactly the equilibrium wage rate

136. According to efficiency wage theory, a new and less costly way to monitor employees’ work effort would be to

D.reduce structural unemployment.

C. increase labor-force participation rates.

137. efficiency wages

C. reduce the incentive to shirk.

A.reduce labor-force participation rates.

B.reduce the natural rate of unemployment.

138. An efficient wage

B.may decrease the cost of production.

C. helps to reduce the level of unemployment.

139. Sectoral changes

A.create frictional unemployment. Firms paying wages above equilibrium to attract a better pool of candidates create structural unemployment.

B.create structural unemployment. Firms paying wages above equilibrium to attract a better pool of candidates create frictional unemployment.

C. and firms paying wages above equilibrium to attract a better pool of candidates both create structural unemployment.

D.and firms paying wages above equilibrium to attract a better pool of candidates both create frictional unemployment.

140. The minimum wage

C. and firms paying wages above equilibrium to attract a better pool of candidates both create structural unemployment.

A.creates frictional unemployment. Firms paying wages above equilibrium to attract a better pool of candidates create structural unemployment.

B.creates structural unemployment. Firms paying wages above equilibrium to attract a better pool of candidates create frictional unemployment.

D.and firms paying wages above equilibrium to attract a better pool of candidates both create frictional unemployment.

141. Dan decides to hire some additional workers for his golf-ball factory. The equilibrium wage is $12 per hour. efficiency wage theory suggests that it is reasonable for Dan to offer

D.more than $12 per hour, so as to attract a better pool of applicants.

B.less than $12 per hour, since some people would be willing to work for less.

C. enough to attract the number of applicants necessary to fifill the jobs available.

142. Four employers have justified their actions as follows. Whose logic is inconsistent with the logic of efficiency wage theory?

B.Kay pays her workers less than the equilibrium wage so they won’t have the time or money to look for work somewhere else.

A.Jay develops a new assembly line technology that limits the amount of shirking workers may do, so he reduces what he pays his employees so as to make it closer to the equilibrium wage.

C. Ray pays his workers in a developing country more than the going wage hoping that they will get a better diet and so be more productive.

D.All of the above are inconsistent with the logic of efficiency wage theory.

143. Anything that makes the efficiency wage rise relative to the market-clearing wage will

D.decrease the quantity demanded and increase the quantity supplied of labor.

A.increase both the quantity demanded and the quantity supplied of labor.

B.decrease both the quantity demanded and the quantity supplied of labor.

C. increase the quantity demanded and decrease the quantity supplied of labor.

Chapter 28 (B)

Authored by Hằng Nguyễn

Education

University

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55 questions

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MULTIPLE CHOICE QUESTION

2 mins • 1 pt

83. People who are unemployed because of job search are best classifified as

A.cyclically unemployed.

B.structurally unemployed.

C. frictionally unemployed.

D.discouraged workers.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

84. Sectoral shifts in the economy

A.create structural unemployment.

B.immediately reduce unemployment.

C. increase unemployment due to job search.

D.on net leave unemployment unchanged.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

85. From time to time the demand for workers has risen in one region of the United States and fallen in another. This illustrates

A.frictional unemployment created by efficiency wages.

B.structural unemployment created by efficiency wages.

C. frictional unemployment created by sectoral shifts.

D.structural unemployment created by sectoral shifts.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

86. In 2002, the demand for construction workers increased and the demands for textile and steel workers diminished. This illustrates

A.frictional unemployment created by a sectoral shift.

B.structural unemployment created by a sectoral shift.

C. frictional unemployment created by efficiency wages.

D.structural unemployment created by efficiency wages.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

87. Frictional unemployment can be the consequence of

A.workers leaving existing jobs to find ones they like better.

B.an industry declining while another is growing.

C. changes in the working conditions offered by competing firms.

D.All of the above are correct.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

88. Which of the following is a cause of frictional unemployment?

A.the minimum wage

B.a worker leaving a job to find one with better benefits

C. labor unions

D.All of the above are correct.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

89. Which of the following is incorrect?

A.Frictional unemployment is inevitable in a dynamic economy.

B.Although the unemployment created by sectoral shifts is unfortunate, in the long run such changes lead to higher productivity and higher living standards.

C. At least 10 percent of U.S. manufacturing jobs are destroyed every year.

D.In a typical month more than 5 percent of workers leave their jobs.

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