Economics A100 Lecture Notes - Lecture 22: Market Power, National Labor Relations Board, National Labor Relations Act

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28 Dec 2020

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When a minimum wage is placed above equilibrium in a market of labor supply and demand, it causes a surplus of labor. Minimum wage laws most affect the least skilled and least experienced. Basic rule= when wage is kept above equilibrium, it results in unemployment. The structural unemployment that comes from an above equilibrium wage is different from the frictional unemployment that comes from the process of job search. When job search is causing unemployment, workers are searching. When wage is above equilibrium, their labor supplied> labor demanded, so they are. Union: a worker association that bargains with employers over wages, benefits, and working conditions. In some countries today, workers have wages set by collective bargaining by law, in which case, wages aren"t determined by equilibrium in supply and demand labor markets. A union is a type of cartel, so it is a group of sellers acting together in the hope of exerting their joint market power.

Related Questions

Question 1 (1 point) Right-to-work laws in individual states:

make it illegal to require union membership as a condition for continued employment.

were allowed by the Taft-Hartley Act of 1947.

make it illegal to run a "closed shop" in that state.

all of the above.

Question 2 (1 point) In the figure to the right, the wage rate that maximizes the total union member income earned is:

W2.

W1.

W3.

uncertain without more information.

Question 4 (1 point) An example of featherbedding would be:

a union trying to increase worker productivity.

a union trying to increase demand for union labor.

a union trying to increase demand for union-made products.

an act banned by the Taft-Hartley Act.

Question 5 (1 point) The Taft-Hartley Act of 1947 (the Labor Management Relations Act):

is the key legislative act that requires management to bargain with unions.

made certain union practices such as closed-shops illegal.

is the key legislative act that permits unions to organize and to strike.

is perceived by union leaders as the most important legislation enabling unions to improve the wages of their members.

Question 8 (1 point) In order to raise wages above the market level for its workers, a union must:

have monopsony power.

recruit better workers.

have the support of the government.

limit the supply of labor in an industry.

Question 9 (1 point) What are the effects of labor unions on wages and productivity?

Wages are lower for union members than non-union members because union dues are so high.

Productivity increases because the marginal factor cost is equated to the marginal revenue product of labor.

Wages are the same for union members and non-union members.

Productivity does not increase or decrease as the result of unions.

Wages are higher for union members than non-union members.

Productivity may decrease because of the way some collective bargaining rules specify how jobs should be done or productivity may increase due to reduced turnover.

Productivity increases due to reduced turnover or because of the way some collective bargaining rules specify how jobs should be done.

Question 10 (1 point) Under bilateral monopoly, the wage rate is:

indeterminate.

higher than the competitive wage rate.

equal to the competitive wage rate.

lower than the competitive wage rate.

The first federal legislation to exempt unions from the antitrust laws was the

Select one:

a. Clayton Antitrust Act.

b. Sherman Antitrust Act.

c. Taft-Hartley Act.

d. Interstate Commerce Act.

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The National Labor Relations Act

Select one:

a. established the right of unions to collective bargaining.

b. prevented courts from issuing injunctions against unions engaged in peaceful strikes.

c. established a federal minimum wage.

d. made it illegal to prosecute unions under the Sherman Antitrust Act.

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The theory that wages are based on the supply and demand for a workers skills is the

Select one:

a. theory of negotiated wages.

b. market theory of wage determination.

c. seniority theory.

d. signaling theory.

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When labor and management ask a third party to collect information about a dispute and present nonbinding recommendations, they are using

Select one:

a. collective bargaining.

b. mediation.

c. fact-finding.

d. arbitration.

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Which of the following prohibits wage and salary discrimination for jobs that require equivalent skills and responsibilities?

Select one:

a. Sherman Antitrust Act

b. Equal Pay Act

c. Taft-Hartley Act

d. Fair Labor Standards Act

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Which of the following statements about the minimum wage is accurate?

Select one:

a. The first minimum wage was set at $0.50/hour in 1950.

b. The minimum wage remained the same from 1998 through 2006.

c. When adjusted for inflation, the minimum wage had the most purchasing power in 1988.

d. When expressed as a percentage of the average manufacturing wage, the minimum wage reached its peak in 1988.

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1- When a price ceiling is imposed, long lines are likely to follow. The value of the time wasted waiting in these lines should be equal to the difference between the market equilibrium price and the imposed price ceiling.

Suppose that demand for a good is given by Q = 122 - 3P, while supply for the good is given by Q = 1P - 20. The average person values their time at $12.29/hour. If a price ceiling of $11.04 is imposed, how many hours will the average person have to wait in line?

2- Suppose that demand for a good is given by Q = 132 - 3P, while supply for the good is given by Q = 2P - 5. If a price ceiling of $11.96 is imposed, what will be the area of the deadweight loss?

The unemployment rate is the percentage of workers who are seeking a job at the prevailing wage, but who are unable to get one. When a minimum wage is imposed, it creates some unemployment among minimum wage workers.

Suppose that the demand for labor is given by Q = 56 - 1W, where 'W' is the hourly wage rate, and the supply of labor is given by Q = 5W - 5. Imagine that a minimum wage of $22.68/hour is imposed by law.

What will be the unemployment rate for workers in this market?

Economics A100 Lecture Notes - Lecture 22: Market Power, National Labor Relations Board, National Labor Relations Act

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