1. Clicker Quiz

2. 1
Approximately what percentage of U.S. workers were union members in 2010? 6%
12%
22%
34%

3. Women are much less likely to be union members than men. This is:2
Women are much less likely to be union members than men. This is:
because women have fundamentally different attitudes about unions
because women are more likely to be in less-unionized industries and occupations
because unions are legally allowed to discriminate against women
not true

4. 3
Over the last few decades, industrial production has shifted from the Northeast and Midwest to the South and Southwest regions of the U.S. This fact is most consistent with the:
managerial-opposition hypothesis
union-growth hypothesis
substitution hypothesis
structural-change hypothesis

5. The “monopoly union” model assumes that the union:4
The “monopoly union” model assumes that the union:
faces a wage-employment tradeoff, given as the firm’s demand for labor curve
will be able to increase both the wages and employment of its members
will attempt to negotiate an “efficient contract” with the firm
attempts to maximize the wage rate

6. Wx and employs Qx workers, its profit will be lower than at ū 5
π1 and π2 are firm isoprofit curves. The monopoly union outcome is given by point ū. Which of the following is a true statement? If the firm pays:
Labor
Wage D Wu Wy Qy Qu Qx π1 π2 x y Wx ū
Wx and employs Qx workers, its profit will be lower than at ū
Wx and employs Qx workers, its profit will be higher than at ū
Wy and employs Qy workers, its profit will be lower than at ū
Wx and employs Qx workers, its profit will be lower than if it pays Wy and employs Qy workers

7. In the diagram below, EC is the employer concession curve and UR is the union resistance curve. The UR curve will shift up if the expected costs of a strike to the: 6 EC UR W*
Wage
Expected strike length T*
union are reduced
union are increased
firm are reduced
firm are increased

8. 7
If nonunion workers in a given occupation are paid $16 per hour while union workers receive $20 per hour, the pure union wage advantage is:
20%
25%
80%
more information is required

9. 7
If nonunion workers in a given occupation are paid $16 per hour while union workers receive $20 per hour, the pure union wage advantage is:
20%
25%
80%
more information is required

10. 8
The nonunion wage rate may rise as the result of a union wage increase because of the:
spillover effect
superior-worker effect
threat effect
compensating wage differential effect

11. 9
The measured union wage advantage may overstate the pure union wage advantage because:
workers who lose their jobs in the union sector may seek and obtain jobs in the nonunion sector, reducing wage rates in the latter
nonunion employers may increase the wages they pay their workers to reduce the likelihood their firms will become unionized
workers who lose their jobs in the union sector may prefer to remain in the union sector, hoping to be recalled rather than accepting lower-paying nonunion wages
unionized plants tend to be less efficient, resulting in lower marginal products of union workers

12. Unions may reduce economic efficiency by:10
Unions may reduce economic efficiency by:
providing an “exit” mechanism
insisting promotions be based on ability rather than seniority
imposing restrictive work rules
reducing worker turnover

13. The allocative efficiency loss associated with unions arises because:11
The allocative efficiency loss associated with unions arises because:
job losers in the union sector take away jobs from more productive workers in the nonunion sector
the value of lost output in the union sector is greater than the value of any additional output in the nonunion sector
the union wage rises above the value of marginal product while the nonunion wage falls below it
job losers in the union sector are unqualified to work in the nonunion sector, so society loses their potential output

14. Empirical estimates generally show that unions reduce:12
Empirical estimates generally show that unions reduce:
both firm profitability and economic efficiency
firm profitability but improve economic efficiency
economic efficiency but there is no consensus regarding their effects on firm profitability
firm profitability but there is no consensus regarding their effects on economic efficiency

15. In 2008 the ratio of female to male hourly wages was approximately13
In 2008 the ratio of female to male hourly wages was approximately
45%-55%
60%-70%
75%-85%
90%-100%

16. 14
Comparing the experiences of African Americans and women, evidence suggests that African Americans are more likely to be subject to
employment discrimination, while women are more likely to be subject to human capital discrimination
occupational discrimination, while women are more likely to be subject to wage discrimination
wage discrimination, while women are more likely to be subject to employment discrimination
employment discrimination, while women are more likely to be subject to occupational discrimination

17. 15
Assume that all workers are equally productive, but that male wages are $14 and female wages are $10. An employer who employs only male workers has a discrimination coefficient of:
at most 0.4
at least $4
at most $4
at least 10/14

18. According to Becker’s “taste-for-discrimination” model:16
According to Becker’s “taste-for-discrimination” model:
a person is judged on the basis of the average characteristics of her or his demographic group
the process of competition will cause discrimination-based wage differentials to persist over long periods of time
there will be discrimination-based wage differentials because a firm with market power distinguishes between different groups with different elasticities of labor supply
the process of competition should put discriminating employers at a competitive disadvantage

19. 17
According to the “demand and supply” interpretation of Becker’s model, which one of the following will tend to reduce the male-female wage gap?
An increase in the supply of female labor
An increase in the discrimination coefficients of some employers
An increase in the number of nondiscriminating firms
An overall increase in the demand for labor

20. 18
The statistical discrimination model and Becker’s “taste-for-discrimination” model:
are alike in that both predict discriminating firms will have higher profits
are alike in that both predict discriminating firms will have lower profits
differ in that the former results in potentially increased profits; firms with a taste for discrimination will have lower profits
differ in that the former results in lower profits; firms with a taste for discrimination will have higher profits

21. 19
Empirical estimates of the extent of discrimination may be upwardly biased if:
certain variables which have a positive effect on productivity are omitted from the study
certain variables which have a negative effect on productivity are omitted from the study
many variables (such as education or occupation) reflect discriminatory decisions
all of the above