Economists would describe a labor union as a
A. trade organization.
B. necessity for competitive labor markets.
C. labor monopoly.
D. monopsony.
Answer: C
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Suppose Amber Crombie and her husband Fitch spend $1400 this year on healthcare and medicines for the chronic nasal congestion they suffer living next to smelly Lake Lillypad. How does their expenditure affect GDP?
A) It doesn't affect GDP at all. B) GDP would decrease by $1400. C) GDP would increase by $1400. D) GDP would increase by $1400 only if the healthcare and medicines cured their chronic nasal congestion; if it remains uncured, then GDP would remain unchanged.
When the marginal product of labor is greater than the average product of labor, the
A) marginal product of labor must be increasing as labor increases. B) average product of labor must be increasing as labor increases. C) total product must be increasing at an increasing rate as labor increases. D) None of the above answers is correct.
The profit-maximizing employment level for a monopsonist occurs where:
a. wage = MFC. b. wage = MRP. c. price = wage. d. wage = TWC. e. MRP = MFC
A disadvantage of options as instruments of performance-related rewards is:
a. that it exposes the executives to market volatility. b. that it increases opportunistic behavior on the part of the employees who expect to earn these incentives. c. that the actual monetary gains from such incentives are usually lower than other performance-related incentives provided by organizations. d. that once an option has been exercised and the executive has sold her shares it will have no continuing effect on her incentives to make better future decisions.