Explaining the concept of Labor union

13. The proportion of U.S. workers belonging to unions has declined dramatically since the early 1950s. Which could be one of the possible reasons?

a. The shift from manufacturing to service industries

b. A reduced desire for unions because of the workplace protection laws now in place

c. The force of globalization and increased competition from foreign producers

d. all of the above

15. Employment will be lower in a bilateral monopoly than in a competitive labor market, but the equilibrium wage is 

a. more than that in a competitive market

b. less than that in the competitive market

c. indeterminate

d. equal to that in the competitive market

1. Which of the following is not a characteristic of a labor union?

a. Voluntary association

b. Intermediary

c. Common goal

d. Individual action

2. A labor union operates like a __________________________in a labor market.

a. monopsony

b. monopoly

c. perfectly competitive entity

d. oligopoly

3. We sometimes call negotiations between unions and firms 

a. rent seeking.

b. profit seeking.

c. collective bargaining.

d. passive negotiations.

5. The percentage of workers belonging to a union is

a. higher for men than women;

b. higher for blacks than for whites or Hispanics;

c. higher for the 45–64 age range; and higher among workers in government and manufacturing than workers in agriculture or service-oriented jobs.

d. all of the above are true.

6.  Because a union is the sole supplier of labor, it can act like a _____________ and ask for whatever wage rate it can obtain for its workers.

a. monopsony

b. monopoly

c. oligopoly

d. entity in a perfectly competitive market

7. Which of the following condition is most likely to lead to a rise in union bargaining power?

a. Increase in the percentage of the workforce in the union.

b. Increased competition in the product market.

c. Relatively high elasticity of demand for labor

d. Monopoly in the labor market.

8. A union is a _____________ selling labor to firms.

a. monopoly

b. monopsony

c. oligopoly

d. perfectly competitive entity

9. A sensible union must recognize that when it pushes up the wage, it also reduces the firms’ incentive to hire. It implies that

a. this situation does not necessarily mean that union workers are fired.

b. it may be that when union workers move on to other jobs or retire, they are not always replaced, or perhaps when a firm expands production.

c. the firms may expand employment somewhat less with a higher union wage than it would have done with the lower equilibrium wage.

d. all of the above statements are true.

10. If union workers’ higher wages are matched by higher productivity. If so, then the firm can afford to pay the higher union wages and, 

a. the demand curve for “unionized” labor could actually shift to the right.

b. the demand curve for “unionized” labor could actually shift to the left.

c. the demand curve for “unionized” labor remains the same.

d. none of the above

11. Union workers might have higher productivity than nonunion workers. Which of the statements below support this fact?

a. Higher wages may elicit higher productivity.

b. union workers tend to stay longer at a given job, a trend that reduces the employer’s costs for training and hiring and results in workers with more years of experience.

c. both of the above

d. none of the above

12. In some cases union workers may be more willing to accept new technology than nonunion workers, because

a. the union workers believe that the union will negotiate to protect their jobs and wages, whereas nonunion workers may be more concerned that the new technology will replace their jobs.

b. union workers, who typically have higher job market experience and training, are likely to suffer less and benefit more than non-union workers from the introduction of new technology.

c. both of the above statements are true

d. none of the above statements are true

4. Employees join unions to fulfill their _______ needs.

a. social

b. economic

c. esteem

d. all of the above

14. When there is market power on both sides of the labor market, in other words, when a union meets a monopsony? Economists call such a situation a

a. monopoly

b. bilateral monopoly

c. labor market oligopoly

d. labor market competitiveness