If, beginning from a competitive labor market, some workers form a union and negotiate a higher rate for themselves, which of the following is likely to happen?
a. Competition will force the wage rate in the non-union sector to increase to the level of the union wage.
b. The marginal product of labor curve will increase in the unionized sector.
c. Employment will move from the union to the non-union sector over time.
d. Employment will increase in the union sector because workers will be attracted by the higher union wage.
QUESTION 2Which of the following observations about outsourcing is true for the U.S. economy?
a. The U.S. is the smallest international outsourcer in terms of dollar value.
b. About 30 percent of U.S. manufacturing costs were outsourced in 2003.
c. The highest percentage of outsourcing by U.S. businesses in 2003 was to other firms located in the United States.
d. Imports of business services by the U.S. made up around 2.5 percent of gross domestic product in 2003.
QUESTION 3Generally, microeconomics
A) has little to say about the entrepreneur
B) says a good bit about the entrepreneur.
C) equates the entrepreneur and the manager.
D) equates management and shareholders.
QUESTION 4Unions tend to:
a. shift labor from the union sector to the non-union sector of the economy.
b. shift labor from the non-union sector to the union sector of the economy.
c. decrease wages in the union sector.
d. increase wages in the non-union sector.
QUESTION 5Which of the following transactions can be categorized as outsourcing?
a. A U.S. furniture manufacturer buying a lumber facility.
b. A U.S. firm transferring some of its operations to its new subsidiary in India.
c. Nike selling its sportswear to customers through its franchisees across the world.
d. A U.S. cosmetics firm using an advertising agency to market its products.
QUESTION 6The market process is
A) governmental.
B) institutional.
C) dynamic.
D) all of these choices.
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