If unions are successful at increasing union wages, it will
a. increase wages and employment in the union sector.
b. increase wages and decrease employment in the union sector.
c. increase wages and employment in the non-union sector.
d. increase wages and decrease employment in the non-union sector.
QUESTION 2Which of the following exemplifies an opportunistic behavior by a franchisor arising out of incompleteness or ambiguity in a contract?
a. Providing inferior service in an attempt to cut operating costs.
b. Terminating a well-operated franchisee and converting the establishment into a profitable company-owned outlet.
c. Fixing exorbitant prices for products having relatively elastic demand.
d. Terminating a franchisee who had been using the company brand name to endorse products that the agreement says it cannot.
QUESTION 3Entrepreneurs serve a different purpose compared to a manager.
Indicate whether the statement is true or false
QUESTION 4Labor unions:
a. increase employment in the non-union sector.
b. decrease employment in the union sector.
c. decrease non-union wages.
d. do all of the above.
QUESTION 5Which of the following exemplifies a vertical restraint imposed by a franchisor in a contract?
a. A clause prohibiting a franchisee from using the company trademark to support a political candidate.
b. A clause prohibiting a franchisee from announcing special offers during Christmas to attract customers.
c. A clause prohibiting a franchisee from bundling two products of the same company.
d. A clause stating the target sales to be achieved by the company during an accounting year.
QUESTION 6If economic profits are zero, then the entrepreneur can go elsewhere and do better.
Indicate whether the statement is true or false
QUESTION 7Labor unions
a. are formed to increase members' wages and improve working conditions.
b. have represented a declining share of the workforce in the past 50 years.
c. have traditionally found it difficult to organize workers in white-collar jobs.
d. are characterized by all of the above.
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