1. How do a strike and a boycott differ?
A strike is a walk out by employees. Boycotts involve the public refusing to buy a product made by the firm to force the company to negotiate with workers.

2. In what ways might a modified union shop weaken the bargaining power that workers have in a union shop?
If too few workers join the union, the modified union shop (workers have a choice to join after being hired) has less clout in its negotiations. In a union shop, all workers join the union and so have more power in negotiating with the employer.

3. For what purpose did early unions form?
Most early unions formed to press for better pay and safer working conditions.

4. Have labor laws since the 1930’s strengthened or weakened the union movement? Explain.
Labor laws strengthened the union movement from the 1930’s through World War II. After WWII there was a backlash with several states enacting right to work laws.

5. What was the Sherman Antitrust Act of 1890 and what did it do?
The Sherman Antitrust Act of 1890 was a regulation that kept the establishment of businesses from creating monopoly in the market.

6. How does the market theory of wage determination explain the difference in pay rates?
Wages are determined by the supply and demand for workers in particular jobs.

7. Under what circumstances might management and labor turn to arbitration to settle a dispute?
Management and labor might use arbitration when they are unable to reach a compromise by themselves and are willing to let an outside arbitrator make the decision.

8. What would be the most preferable way for both labor and management to resolve a labor dispute? What would be the last resort for solving a dispute? Explain your answer
Collective bargaining would be the preferred method of resolving a dispute because the two parties would negotiate and reach a compromise they are both willing to accept. Presidential intervention would the least preferred method because both parties would lose control of the situation and would be coerced into accepting the president’s decision.

9. Why do different people earn different wages? Explain
Four theories explain why people earn different wages: Theory of non-competing categories of labor-highest pay to those more qualified and lowest pay to less qualified. Workers in one category do not compete with workers in the other category. Market theory of wage determination-supply and demand for a worker’s skills and services determine the wage or salary. Theory of negotiated wages-bargaining strength or organized labor is a factor that helps determine wages. Signaling theory-employers are willing to pay more for people with credentials.

10. What options are available for solving labor disputes?
Labor disputes can be settled by collective bargaining, mediation, arbitration, fact-finding, injunction, seizure, and presidential intervention.

11. How and why would set-aside contracts affect the glass ceiling?
Set-aside contracts (guaranteed contract or portion of a contract reserved for a targeted group, usually a minority) would remove the glass ceiling because they would provide women opportunities for economic growth.

12. Why do women face an income gap?
Differences in skills and experiences; fewer women in higher-paying jobs and more in low-paying jobs, discrimination and the glass ceiling are all reasons why the income gap exists.

13. What are the causes of pay discrimination in the labor market?
Race, gender related occupational education, and skill variable.

14. What would happen if there were no minimum wage?
Wages could decrease, employment levels could be affected by higher unemployment rates, poverty rates could increase with people earning less per hour and thus lower pay checks. Free-market forces would set wages.