1. The introduction of a union into a monopsony labor market will cause employment in this market to
A. Rise
B. Fall
C. Remain constant
D. Change in a manner than cannot be determined without additional info.
2. Unions may attempt to increase the demand for union workers by
A. Advocating boycotts of nonunion products
B. Lobbying for trade restrictions
C. Lobbying for laws that restriuct the availability of substitute labor inputs
D. All of the above
E. None of the above
3. As a result of the scale effect associated with a higher wage, the quantity of labor demanded is expected to
A. Fall
B. Rise
C. Remain unchanged
D. Change in an unpredictable manner
4. If a union successfully urges consumers to boycott products produced by nonunion workers, the own-wage elasticity of demand for union labor is reduced
A. Under no circumstances
B. Because the scale effect resulting from a change in the wage will be smaller in magnitude since the boycott lowers the price elasticity of demand for output
C. Because the substitution effect in the labor market resulting from a change in the wage will be smaller in magnitude since the boycott lowers the price elasticity of demand for output
D. Because labor demand falls in response to the boycott
5. union sponsored boycotts of products produced by nonunion workers will affect the elasticity of demand for union workers by affecting the
A. Substitution effect in the labor market
B. Scale effect in the labor market
C. None of the above
6. In a local labor market
A. There are many employers and employees in most local areas
B. Foreign citizens are not allowed to apply for jobs
C. Most employer and employee search is conducted at the national level
D. There are few potential employers and employees in most local areas
7. Economic theory predicts that the cost of general training will be
A. Borne by workers
B. Borne by firms
C. Shared between workers and firms
D. None of the above
8. During a recession, firms are most likely to layoff workers who possess
A. only firm-specific training
B. only general training
9. Productivity is likely to decline by more during a recession for those labor markets in which workers possess a high level of
A. General training
B. Firm-specific training
C. Either general or firm-specific training
D. None of the above
10. Suppose that some previously discouraged workers start looking for work because they become more optimistic about their prospects. The immediate effect of this is expected to be
A. An increase in the unemployment rate
B. A decrease in the unemployment rate
C. An unchanged unemployment rate
D. A reduction in the labor force participation rate
11. The introduction of government-mandated health insurance for all employees would result in a substitution effect that
A. Raises employment and increases the length of the workweek
B. Lowers employment and reduces the length of the workweek
C. Reduces employment and raises the length of the workweek
D. Increases employment and reduced the length of the workweek
12. As the wage rate increases, the quantity of labor demanded will decrease
A. Under no circumstances
B. Only if the substitution effect exceeds the scale effect
C. Only if the scale effect exceeds the substitution effect
D. As a result of both the substitution and scale effects
