Final Exam Review 2156

Assuming consumption and leisure are both normal goods, hours of work will increase when the wage increases if the income effect dominates the substitution effect.

• TRUE

• FALSE

When a person is a non-participant in the labour market, the person's budget line ....... his/her/their indifference curve.

• is steeper than

• is flatter than

• has the same slope as the slope of

The primary reason why workers in the fast-food industry are paid less is that the demand for the product that they produce is quite elastic, making the demand for labour elastic.

• TRUE

• FALSE

In the short run, the demand for labour for a competitive firm in a perfectly competitive labour market is:

• the marginal product of labour curve

• the value of the marginal product curve

• the downward sloping portion of the value of the marginal product curve

To recruit another worker, a monopsonist incurs a smaller increase in labour costs than a firm which operates in a perfectly competitive labour market.

• TRUE

• FALSE

The marginal cost of labour is lower than the average cost of labour in the case of a monopsonist.

• TRUE

• FALSE

In conventional arbitration, arbitrators do not have the freedom to decide on any wage settlement of their choice.

• TRUE

• FALSE

The wage distribution among non-unionized workers is more dispersed than the distribution of wages among unionized workers.

• TRUE

• FALSE

Of all types of dispute resolution procedures, only arbitration is binding.

• TRUE

• FALSE

When the unemployment rate is high, union resistance schedules shift upward.

• TRUE

• FALSE