Clicker Quiz

1. Clicker Quiz

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

3. 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. 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. Wage ū Wu y Wy Wx x π1 π2 D Qx Qu Qy Labor 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: • 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. Wage EC W* UR Expected strike length T* 6 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: • 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. 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. 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. 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. 13 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. 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