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

a.
a closed shop.
 
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