Which of the following do unions not cause?

the wage to rise above the equilibrium level

conflict between insiders who benefit from high union wages and outsiders who do not get the union jobs

reduced wages in industries without unions

If outsiders had more say in union contracts then it is likely that union wages would be

lower so unemployment would be lower.

higher so unemployment would be higher.

higher so unemployment would be lower.

lower so unemployment would be higher.

both structural unemployment and the natural rate of unemployment.

structural unemployment but not the natural rate of unemployment.

the natural rate of unemployment but not structural unemployment.

neither structural unemployment nor the natural rate of unemployment.

lower the wages of workers in industries without unions.

do not affect the natural rate of unemployment.

lower the wages of unionized workers.

raise the profits of unionized firms.

If unions were formed in more industries, the supply of labor in other industries would

increase, causing employment in other industries to rise.

increase, causing employment in other industries to fall.

decrease, causing employment in other industries to rise.

decrease, causing employment in other industries to fall.

Suppose that neither food-service workers nor retail salespeople are unionized. If food-service workers unionize, then the supply of retail salespeople will

rise, and the wages of retail salespeople will fall.

rise, as will the wages of retail salespeople.

fall, as will the wages of retail salespeople.

fall, and the wages of retail salespeople will rise.

Consider two labor markets in which jobs are equally attractive in all respects other than the wage rate. All workers are equally able to do either job. Initially, both labor markets are perfectly competitive. If a union organizes workers in one of the markets, then the wage rates will tend to

rise for the union jobs and fall for the nonunion jobs.

rise for the union jobs, but remain unchanged for the nonunion jobs.

give workers in a unionized firm the right to choose whether to join the union.

guarantee workers the right to form unions.

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

prevent workers from being fired because of increases in wages brought about by collective bargaining.

Which of the following is correct?

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

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

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

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

Which of the following is not a contention of advocates of unions?

The introduction of a union benefits all workers in a firm.

Unions are a necessary antidote to the market power of the firms that hire workers.

In the case of a "company town," a union may balance the firm's market power and protect the workers from being at the mercy of the firm's owners.

Unions are important for helping firms respond efficiently to workers' concerns.

The theory of efficiency wages explains why

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

setting wages at the equilibrium level may increase unemployment.

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

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

Paying efficiency wages means that wages are

above equilibrium, and profits are higher than otherwise.

above equilibrium, and profits are lower than otherwise.

below equilibrium, and profits are higher than otherwise.

below equilibrium, and profits are lower than otherwise.

Efficiency wages create a labor

surplus and so increase unemployment.

surplus and so decrease unemployment.

shortage and so increase unemployment.

shortage and so decrease unemployment.

increase structural unemployment by keeping wages above equilibrium.

increase frictional unemployment by keeping wages above equilibrium.

decrease frictional unemployment by keeping wages at equilibrium.

decrease structural unemployment by keeping wages at equilibrium.

Efficiency-wage theory suggests that paying

high wages might be profitable because they raise the efficiency of a firm's workers.

low wages might be profitable because they raise the efficiency of a firm's workers.

low wages might be profitable because they lower the efficiency of a firm's workers.

high wages might be profitable because they lower the efficiency of a firm's workers.

Susan is a plant manager in charge of a factory in a relatively poor country. Even though market wages are low, she decides to raise the wages of her workers. Her decision

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.

will help eliminate the excess supply of labor.

may cause her workers to reduce the effort they expend at their jobs.

Which of the following is an example of an efficiency wage?

an above-equilibrium wage paid by a firm to reduce turnover costs

a higher wage paid to a more experienced worker

a below-equilibrium wage paid by a small business exempt from minimum-wage laws

a wage tied to participation in a government-sponsored job training program

The efficiency-wage theory of worker turnover suggests that firms with higher turnover will have

higher production costs and lower profits.

higher production costs and higher profits.

lower production costs and higher profits.

lower production costs and lower profits.

Which of the following is an example of an efficiency wage?

an above-equilibrium wage offered by a firm to attract a more talented pool of job applicants

a high wage paid to compensate for dangerous work such as coal mining

a wage below the minimum wage but supplemented by customer tips

a high wage paid to a college graduate for a high-skill job such as electrical engineering

Michael decides to hire some additional workers for his roofing company. The equilibrium wage is $17 per hour. Efficiency wage theory suggests that it is reasonable for Michael to offer

more than $17 per hour in order to attract a better pool of applicants.

less than $17 per hour because some people would be willing to work for less.

less than $17 an hour to prevent shirking.

Rafael is the newly-appointed plant manager for a company that manufactures head phones. Rafael's senior supervisors told him 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 he do?

pay all workers more than the equilibrium wage rate

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

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

fire the workers with the most seniority

Which of the following is not a reason that paying efficiency wages may increase a firm's profit?

Efficiency wages are below the equilibrium wage rate but still attract a sufficient number of workers.

Efficiency wages increase worker health and therefore increase worker productivity.

Efficiency wages decrease worker turnover and therefore decrease hiring and training costs.

Efficiency wages decrease worker shirking and therefore increase worker productivity.

In which of the following situations should a firm pay efficiency wages?

A hiring manager cannot easily judge the quality of applicants, and after workers have worked for the firm a while, they tend to look for other jobs.

A hiring manager can easily judge the quality of applicants, and after workers have worked for the firm a while, they tend not to look for other jobs.

A hiring manager can easily judge the quality of applicants, and after workers have worked for the firm a while, they tend to look for other jobs.

A hiring manager cannot easily judge the quality of applicants, and after workers have worked for the firm a while, they tend not to look for other jobs.

Sectoral changes in demand

create frictional unemployment, while firms paying wages above equilibrium to attract a better pool of candidates creates structural unemployment.

create structural unemployment, while firms paying wages above equilibrium to attract a better pool of candidates creates frictional unemployment.

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

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

creates frictional unemployment, while firms paying wages above equilibrium to improve worker health creates structural unemployment.

and firms paying wages above equilibrium to improve worker health both create frictional unemployment.

creates structural unemployment, while firms paying wages above equilibrium to improve worker health creates frictional unemployment.

and firms paying wages above equilibrium to improve worker health both create structural unemployment.

Minimum-wage laws, unions, and efficiency wages contribute to

both structural unemployment and the natural rate of unemployment.

neither structural unemployment nor the natural rate of unemployment.

structural unemployment, but not the natural rate of unemployment.

the natural rate of unemployment, but not structural unemployment.

Minimum-wage laws and unions are similar to each other but different from efficiency wages in that minimum-wage law and unions

prevent firms from lowering wages in the presence of a surplus of workers.

cause unemployment, but efficiency wages do not.

cause the quantity of labor supplied to exceed the quantity of labor demanded, but efficiency wages do not.

cause wages to be above the equilibrium level.

and firms paying wages above equilibrium to improve worker effort both create structural unemployment.

and firms paying wages above equilibrium to improve worker effort both create frictional unemployment.

create frictional unemployment, while firms paying wages above equilibrium to improve worker effort create structural unemployment.

create structural unemployment, while firms paying wages above equilibrium to improve worker effort create frictional unemployment.

In the early 1900s, Henry Ford introduced a

high-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory.

high-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.

low-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory.

low-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.

raise the productivity of a firm's workers, so the firm hires fewer workers.

raise the productivity of a firm's workers, so the firm hires more workers.

reduce the productivity of a firms' workers, so the firm hires more workers.

reduce the productivity of a firm's workers, so the firm hires fewer workers.

Which of the following is an example of an efficiency wage?

an above equilibrium wage paid to workers to reduce shirking

an addition the government makes to some workers' wages in order to reduce poverty

an equilibrium wage paid to workers who work part time and so are exempt from the minimum wage

paying higher wages to workers doing dangerous tasks

chap 28 (2)

Authored by Sumu Tuong

English

University

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39 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Workers waiting for jobs to open up is most closely associated with

cyclical unemployment.

frictional unemployment.

seasonal unemployment.

structural unemployment.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In Belgium, Norway, and Sweden, the percentage of workers who belong to unions is

almost zero.

less than it is in the United States.

about the same as it is in the United States.

greater than it is in the United States.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Labor unions

raise wages in unionized industries.

create labor shortages in non-unionized industries.

play a larger role in the current U.S. economy than in European countries such as Norway and Sweden.

prefer to operate in states with right-to-work laws.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Sam has no job but keeps applying to get a job with a business that is unionized. He is qualified and he finds the pay attractive, but the firm is not hiring. Sam is

structurally unemployed. Structural unemployment exists even in the long run.

structurally unemployed. Structural unemployment does not exist in the long run.

frictionally unemployed. Frictional unemployment exists even in the long run.

frictionally unemployed. Frictional unemployment does not exist in the long run.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is not correct?

When a union is present in a labor market, wages are determined by the equilibrium of supply and demand.

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

The process by which unions and firms agree on the terms of employment is called collective bargaining.

Most workers in the U.S. economy are not members of a union.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is not correct?

An organized withdrawal of labor from a firm by a union is called a strike.

The power of a union comes from its ability to strike if the union and the firm do not agree on the terms of employment.

Economists who study the effects of unions typically find that union workers earn about 25 to 35 percent more than similar workers who do not belong to unions.

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

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

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

both wages and unemployment increase.

wages increase and unemployment decreases.

wages decrease and unemployment increases.

both wages and unemployment decrease.

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chap 28 (2)

Workers waiting for jobs to open up is most closely associated with

In Belgium, Norway, and Sweden, the percentage of workers who belong to unions is

Labor unions

Sam has no job but keeps applying to get a job with a business that is unionized. He is qualified and he finds the pay attractive, but the firm is not hiring. Sam is

Which of the following is not correct?

Which of the following is not correct?

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

Which of the following do unions not cause?

If outsiders had more say in union contracts then it is likely that union wages would be

Unions contribute to

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