An industry with a strong union (e.g., UAW)
a. will increase wages in the nonunion sector of the industry
b. will increase employment for union workers when wages increase
c. can force employers to hire all unions members regardless of the wage
d. can increase the demand for union workers by increasing turnover and reducing productivity
e. can bargain for wages that are greater than the market's equilibrium wage
QUESTION 2International trade does all the following except
a. allow a country to specialize in producing certain goods and services
b. reduce world output
c. allow a country to move to a higher consumption possibilities frontier
d. allow a country's consumption possibilities frontier to lie outside its production possibilities frontier
e. increase world output
QUESTION 3If union demands result in a surplus of labor in some industries, the resulting
a. increased demand for labor in the nonunion sector drives nonunion wages up
b. decreased demand for labor in the nonunion sector drives nonunion wages down
c. increased supply of labor in the nonunion sector drives nonunion wages down
d. increased supply of labor in the nonunion sector drives nonunion wages up
e. decreased supply of labor in the nonunion sector drives nonunion wages up
QUESTION 4Which of the following is true?
a. International trade makes it possible for a country's consumption possibilities to exceed its production possibilities.
b. International trade requires that a country's production possibilities exceed its consumption possibilities.
c. A country's production possibilities always equal its consumption possibilities.
d. A country's consumption possibilities can never equal its production possibilities because of leakages in the system.
e. As long as there is full employment of resources, a country's production possibilities will exceed its consumption possibilities even with trade.
QUESTION 5If the United Auto Workers successfully negotiates a wage that is higher than the competitive wage,
a. there is no excess supply of labor because everyone who wants to work at the union wage can get a job
b. there is no excess demand for labor because everyone who wants to work at the union wage can get a job
c. the union must ration the available jobs
d. all workers are better off
e. more workers are employed than at the competitive wage
QUESTION 6The rate at which two countries trade one good for another
a. is known as the foreign exchange rate
b. is known as the terms of trade
c. is known as the export line
d. equals the slope of the import line
e. equals the common slope of the countries' production possibilities frontiers
QUESTION 7If the United Mine Workers successfully negotiates a wage that is higher than the competitive wage,
a. an excess demand for labor is created
b. a surplus of labor is created
c. the demand for labor increases
d. the supply of labor decreases
e. the quantity of labor demanded increases
QUESTION 8Which of the following is not true of the terms of trade?
a. They are determined by supply and demand factors.
b. They lie somewhere between the opportunity costs of the trading partners.
c. GATT begins negotiations on the terms of trade.
d. They depend on negotiations between trade partners.
e. They often favor one partner more than the other.
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