vacation insurance and pensions are all examples of
the money received by workers per unit of time (per hour)
goods and services worker can purchase with his nominal wage : purchasing power
what are top reason for high productivity? 4
plentiful capital, access to abundant resources, advanced technology, and labor quality
when producers add more real output per hour then the ________ is available to distribute
over long periods of time productivity and real wages tend to
productivity of US labor has _____ over the long run causing demand to shift ______ more rapidly then increasing the supply of labor.
many firms compete in hiring specific types of labor, numerous equally qualified workers supply that labor and no one controls market wage
purely competitive labor market
supply curve for labor slopes ________ in a purely competitive labor market because as a group must pay higher wage rates to obtain more workers
intersection of labor _______ and ______ determine the equilibrium wage rate and level of employment in a purely competitive labor market.
demand and supply
purely competitive labor markets maximize profits and minimize losses when
marginal revenue product = marginal resource cost
demand curve slopes ______ because of ______
down , law of diminishing returns
tot determine a firms total revenue from employing number of labor units we sum up.....
the MRP's of those units
the top triangle and bottom retangle represent
non labor costs and total wage costs
marginal productivity theory of income distribution
the theory that the distribution of income is determined by the marginal productivity of the factors of production that individuals own
The productivity and real wages of workers in the industrially advanced economies have risen historically partly because:
workers have been able to use larger quantities of capital equipment.
increase in total revenue resulting from the hire of one more unit of labor
marginal revenue product
amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource.
marginal resource cost
the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic if a firm is hiring in a...
purely competitive firm
The labor supply curve for a particular occupation is upsloping because:
higher wages will be needed to attract workers from other occupations.
The market supply curve for labor is upsloping because
of the opportunity cost of labor in housekeeping, leisure, or alternative employments.
A profit-maximizing firm will:
A) expand employment if marginal revenue product exceeds marginal resource cost.
B) reduce employment if marginal revenue product exceeds marginal resource cost.
C) expand employment if marginal revenue product equals marginal resource cost.
D) reduce employment if marginal revenue product equals marginal resource cost.
A firm hiring labor in a perfectly competitive labor market faces a horizontal labor supply curve and
downward sloping labor demand curve.
MRP = Wage Rate.
purely competitive labor market
the outcome in a monopsony labor market is shown by
W<MRP ; W<MRC
The labor supply curve facing a purely competitive employer is __________ whereas the labor supply curve facing a monopsonist is ___________.
horizontal, upwards sloping
In a monopsonistic labor market the employer will maximize profits by employing workers up to that point at which
MRP = MRC
uppose the MRP of a firm's twelfth worker is $22 and the worker's marginal wage cost is $16. We can say with certainty that the firm:
A) is hiring labor in a competitive labor market at a wage rate of $16.
B) is hiring labor in a monopsonistic labor market.
C) will find it profitable to hire fewer workers.
D) will find it profitable to hire more workers.
the wage rate paid by the employer varies directly with the number of workers employed
Which of the following is most likely to be an example of monopsony?
A) the market for fast-food workers in a large summer resort town
B) the market for card dealers in Las Vegas.
C) the market for major league baseball umpires.
D) the market for retail sales clerks in a major city.
(economics) a market in which goods or services are offered by several sellers but there is only one buyer
monopsony is a wage....
T?F monopsony is common in the US
If a firm faces an upsloping labor supply curve (and there is no union or minimum wage), its:
A) MRC curve is also upsloping. C) MRP curve is perfectly inelastic.
B) MRC curve is perfectly elastic. D) MRP curve is also uploping.
A monopsonist's wage cost in hiring an additional worker is the:
A) worker's wage rate.
B) worker's wage rate plus the wage increases paid to all workers already employed.
C) worker's wage rate adjusted for the lower price that must be charged for the extra output.
D) marginal wage cost less the wage rate.
A large hospital in a relatively small city finds that, if its demand for nurses increases, the wages of nurses will rise. We can say that the hospital is
Other things equal, the monopsonistic employer will pay a:
A) lower wage rate and hire fewer workers than will a purely competitive employer.
B) higher wage rate but hire fewer workers than will a purely competitive employer.
C) lower wage rate but hire a larger number of workers than will a purely competitive employer.
D) higher wage rate and hire a larger number of workers than will a purely competitive employer.
Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode, New Mexico. Also, suppose that this labor force is highly immobile. Economists would describe this employer as a:
A) monopolist. B) oligopolist. C) monopsonist. D) monopolistic competitor.
A monopsonistic employer in an unorganized (nonunion) labor market will:
A) pay a wage rate less than labor's MRP.
B) pay the same wage rate but hire fewer workers than if the market was purely competitive.
C) hire the number of workers indicated by the intersection of the MRC and the labor supply curves.
D) pay a wage rate in excess of labor's MRP.
As compared to a purely competitive labor market, in a nonunionized monopsonistic labor market wages:
A) and employment will both be lower. C) will be lower, but employment will be higher.
B) will be higher, but employment will be lower. D) and employment will both be higher.
T/F Other things equal, a monopsonist will pay a lower wage rate than will a firm hiring labor competitively.
T/F A monopsonistic employer will pay workers a wage rate equal to their MRP.
T?F A purely competitive seller will pay workers a wage rate equal to their MRP.
T/F n imperfectly competitive seller will pay workers a wage rate equal to their MRP.
A union may increase the demand for the services of its constituents by all of the tactics below except:
A) successfully increasing labor productivity.
B) lobbying for increases in public expenditures on the product it is producing.
C) successfully advertising the product it is producing to private consumers.
D) increasing the price of products that are complements for the one it is producing.
he United Mine Workers is a good illustration of what type of unionism?
Which of the following unions best represents the exclusive unionism model?
A) the mine workers B) the teamsters C) the carpenters D) the steelworkers
Inclusive unionism is practiced mostly by:
A) professional and semiprofessional employees.
B) small unions comprised of skilled workers, such as the bricklayers.
C) industrial unions.
D) craft unions.
A craft union attempts to increase wage rates by:
A) equating the MRP and the MRC curves. C) shifting the labor supply curve to the right.
B) shifting the labor supply curve to the left. D) shifting the MRP curve to the right.
Occupational licensing has much the same effect as:
The practice of a labor union of including as members all workers employed in an industry
The practice of a labor union of restricting the supply of skilled union labor to increase the wages received by union members; the policies typically employed by a craft union
A) functions essentially the same as inclusive unionism.
B) attracts large numbers of workers and therefore depresses wages.
C) often restricts occupational entry and raises the incomes of licensees.
D) has been declared illegal in the majority of states.
If an industrial union is formed to bargain with a monopsonistic employer, then in this labor market employment may either .... to employment
increase or decrease
Exclusive unionism attempts to increase wage rates by:
decreasing supply of labor
Labor unions may attempt to raise wage rates by:
A) increasing the supply of labor.
B) forcing employers, under the threat of a strike, to pay above-equilibrium wage rates.
C) decreasing the demand for labor.
D) increasing the price of complementary resources.
Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they do this is to increase...
demand of construction workers
craft unions only support workers that
have a particular skill
Labor unions are restrained in their wage demands because the labor demand curve
In a labor market characterized by bilateral monopoly the wage rate will be
If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as:
A) a cartel. B) countervailing power. C) a bilateral monopoly. D) an internal labor market.
Market with only one seller and one buyer
when a monopsonistic employer bargains with an inclusive union.
T/f Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hire of labor.
t/f: The rising general level of real wages in the United States has occurred because growing population has increased the supply of labor relative to the demand for it.
t/f: Advocates of the minimum wage argue that its effects should be analyzed within the context of a dynamic and imperfectly competitive labor market.
t/f : Marginal resource (labor) cost will always exceed the wage rate when the employer is selling its product in an imperfectly competitive market.
t/f :A monopsonistic employer may sell its product in a competitive market.
t/f:ndustrial unions are more likely to increase wage rates by restricting the supply of labor than are craft unions.
t/f:The labor supply curve of a purely competitive firm is perfectly inelastic.
t/f:The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.
t/f: Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers.
t/f:Seniority pay is the same as piece rate pay.
t/f:The principal-agent problem in labor markets arises because of the possibility of shirking by workers.
t/f: Efficiency wages are determined at below-equilibrium levels
t/f:Human capital investment refers to spending on education and worker training.
t/f:Noncompeting groups of workers are the result of geographic immobilities.
t/f:Shirking refers to the behavior of workers who provide less-than-expected effort on the job.
t/f:Piece-rates may not be appropriate pay in some situations because they might reduce product quality.