True/False
Indicate whether the
statement is true or false.
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1.
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Supply and demand usually determine the price of labor.
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2.
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All jobs come with both money benefits and nonmoney benefits.
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3.
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The two factors that make the demand for your labor services high are the demand
for the good you produce and your education.
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4.
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The president of the United States determines the minimum wage.
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5.
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The U.S. Department of Labor predicts that some of the fastest growing
occupations in the future will include medical assistants, physician assistants, and home health
aides.
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6.
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Union shops are legal in all 50 states.
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7.
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The CIO (Congress of Industrial Organizations) was the first national labor
union.
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8.
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The Taft-Hartley Act prohibited the closed shop.
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9.
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At the equilibrium wage rate, the wage doesn’t rise or fall because the
market has no shortage or surplus.
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10.
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Today, 40 percent of all workers are members of unions.
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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11.
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When deciding between jobs, people consider
a. | the salary. | c. | their satisfaction with the work. | b. | vacation
time. | d. | All of the
above |
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12.
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If there were a sharp increase in demand for Hershey’s chocolate bars, we
might expect
a. | an increase in demand for workers. | c. | no change in the demand for
workers. | b. | a decrease in demand for workers. | d. | None of the
above |
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13.
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The demand for labor could decrease if
a. | the products that workers make become popular. | b. | there is a decrease
in the number of foreign workers. | c. | there is a decrease in demand for the products
that workers make. | d. | there is a decrease in the supply of labor
available. |
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14.
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One of the key elements in the productivity of workers is
a. | their age. | c. | their grades from school. | b. | their education and
training. | d. | their previous
job. |
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15.
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Minimum wage is
a. | a government-set wage floor. | c. | an equilibrium
wage. | b. | a government-set wage ceiling. | d. | Both a and c |
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16.
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The first minimum wage law set an hourly rate of
a. | $2. | c. | 50 cents. | b. | $1. | d. | 25 cents. |
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17.
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An economist would explain the huge salaries commanded by entertainers and
professional athletes as
a. | the result of union negotiations. | b. | famous people getting anything they
want. | c. | the result of supply and demand. | d. | a tragedy. |
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18.
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If minimum wage is set above the equilibrium wage rate, it will
a. | shift the demand curve for labor to the right. | b. | result in fewer
workers entering the labor market. | c. | result in employers being willing to hire fewer
workers. | d. | cause a shortage in the labor market. |
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19.
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Another name for money wage is
a. | real wage. | c. | minimal wage. | b. | nominal wage. | d. | Both a and b |
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20.
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Increasing your educational level can
a. | increase your income. | b. | increase your probability of remaining
employed. | c. | increase your lifetime income. | d. | All of the
above |
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21.
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A union is
a. | a worker association limited to professions with similar skills. | b. | the decision of one
business to merge with another. | c. | a group of employers who join together to
bargain with employees. | d. | a worker association that bargains with
employers for wages and working conditions. |
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22.
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If the union and the employer are unable to reach an agreement, the union
may
a. | sue the employer in court. | c. | retreat. | b. | strike. | d. | raise dues. |
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23.
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The National Labor Relations Board
a. | enforces right-to-work laws. | c. | restrains the use of
injunctions. | b. | investigates unfair labor practices. | d. | calculates the employment
rate. |
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24.
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The American Federation of Labor (AFL) and the Congress of Industrial
Organizations (CIO)
a. | consisted of workers with similar skills. | b. | merged in the
1950s. | c. | have developed a strong relationship that continues today. | d. | have doubled their
membership over the years. |
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25.
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Government regulations
a. | protect workers against occupational injuries and illnesses. | b. | specify minimum
standards for potentially unsafe products. | c. | increase costs to
taxpayers. | d. | All of the above |
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26.
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The price of labor is called the
a. | price rate. | c. | equilibrium rate. | b. | wage rate. | d. | cost rate. |
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27.
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The supply curve for labor is
a. | upward sloping, left to right. | c. | downward sloping, left to
right. | b. | upward sloping, right to left. | d. | None of the
above |
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28.
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If the quantity supplied of labor is more than the quantity demanded,
then
a. | the demand for the product increases. | c. | the wage rate
falls. | b. | the demand for the product decreases. | d. | the wage rate
rises. |
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29.
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If the wage rate is at equilibrium, then
a. | wages will rise. | c. | wages will move along the supply curve. | b. | wages will
fall. | d. | wages will stay the
same. |
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30.
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A shortage of workers exists when
a. | the supply of workers exceeds the demand. | b. | the demand for
workers exceeds the supply. | c. | the number of workers supplying their labor
equals the demand for labor. | d. | the supply curve for the product a firm
produces shifts to the left. |
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31.
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Derived demand for labor would exist when
a. | there is an increase in the product price. | b. | consumers select a
substitute product. | c. | there is an increase in demand for the
product. | d. | wages increase. |
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32.
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Differences in wages usually exist because of differences in
a. | worker productivity. | c. | experience. | b. | the demand for the good you
produce. | d. | Both a and
b |
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33.
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The U.S. Congress passed the first minimum wage law in the
a. | 1890s. | c. | 1950s. | b. | 1930s. | d. | 1970s. |
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34.
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In 2005 the hourly federal minimum wage was
a. | $2.15. | c. | $4.15. | b. | $3.25. | d. | $5.15. |
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35.
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A real wage is
a. | a person’s wage rate in terms of what it buys. | b. | a person’s
wage rate in terms of other employees. | c. | a person’s salary divided by the number
of hours they work. | d. | a person’s salary after
taxes. |
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36.
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Which of the following is true regarding unions?
a. | Unions negotiate agreements with employers for the benefit of their
members. | b. | Unions are steadily increasing their membership percentage of the labor
force. | c. | Unions assist members in receiving higher wages and benefits. | d. | Both a and
c |
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37.
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Typically, union members earn more than nonunion workers with similar skills
by
a. | less than 5 percent. | c. | 10 to 15 percent. | b. | 5 to 10 percent. | d. | 15 to 20
percent. |
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38.
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Right-to-work laws
a. | give workers the right to select whether or not to join the
union. | b. | give employers the right to work in place of striking union
workers. | c. | require employers to make union membership a requirement for
employment. | d. | enforces workers’ rights to unionize. |
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39.
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The Wagner Act of 1935
a. | requires employers to bargain with unions in good faith. | b. | enforces antitrust
laws against unions. | c. | made it illegal for employers to interfere with
their employees’ rights to organize or join a union. | d. | Both a and
c |
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40.
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The Knights of Labor
a. | was the first union, organized in 1869. | b. | includes a large
number of skilled workers today. | c. | was formed under the leadership of Samuel
Gompers. | d. | was the first union formed in England. |
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