1. Unions can increase their wages by a. all of the following b. decreasing supp
ID: 1120962 • Letter: 1
Question
1. Unions can increase their wages by
a. all of the following
b. decreasing supply of labor
c. using the threat of a strike
d. increasing the proportion of union workers in the industry
e. increasing the demand for the product they produce, and, therefore the demand for their labor services
2. People who are more productive in market work
a. produce less for themselves
b. spend more time engaged in nonmarket work
c. work fewer hours in market work and enjoy more leisure
d. are more likely to acquire skills and education through nonmarket work
e. are attracted to market work at lower wages
3. The union participation rate in the United States is
a. lowest among service workers in the private sector
b. highest among service workers in the private sector
c. lowest among service workers in the public sector
d. highest in heavy industry
e. highest in high-technology industries
4. All types of capital
a. are forms of resources that can be used in future production
b. require a physical existance
c. earn and economic rent
d. yield profits for their owners
e. require obtaining more education and job skills
5. As defined by economists, interest is
a. only the amount earned by productive capital as a resource
b. only the amount earned by land as a resource
c. only the amount earned by lending money
d. both the amount earned by productive capital as a resource and the amount earned by lending money
e. both the amount earned by land as a resource and the amount earned by lending money
6. Which of the following affects interest rate on a loan?
a. all of the following
b. duration of loan
c. tax treatment of loan
d. administrative cost of a loan
e. risk of default on a loan
7. One problem associated with intellectual property is that
a. only one person can use it at a time
b. the patent system reduces incentives to create new intellectual property
c. the cost of producing it usually exceeds the benefit
d. encryption software creates monopoly power
e. the original producer has difficulty preventing non-paying beneficiaries from consuming the property
Explanation / Answer
1. The right answer is option a. all of the following
Explanation: When the supply of labor is decreased, there will be a scarcity of workers and this will increase the price of labor i.e. the wage of workers. Also, the management can increase wage if there is a credible threat of a strike. Increasing the proportion of union workers in the industry will increase the influence and the bargaining power of the unions, which can help the union pressurize the management to increase wage. Lastly, if the demand for the goods produced increase, firms will have to increase production and demand more labor, which will increase wage rate if the labor supply does not increase proportionately.
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