Labor and Wages

According to the chart, most workers are...

• not part of a union

• part of a union

• represented by a union

• looking to join a union

The study of labor is part of the branch of economics called...

• Macroeconomics

• Microeconomics

• Civilian Labor Force

• the Right-to-Work

Answer explanation

The study of labor is part of macroeconomics. Macroeconomics is the branch of economics that deals with the economy as a whole.

One of the jobs of the union is to bargain with management for wage rates and benefits. This system is known as...

• the traditional theory of wage determination

• equilibrium wage rate

• the theory of negotiated wages

• the signaling theory

Answer explanation

The theory of negotiated wages states that organized labor’s bargaining strength is a factor that helps determines wages.

Your health, skills, education and abilities are just some of the things that make up your...

• human capital

• wage

• category of labor

• labor mobility

Answer explanation

One of the main contributions to productivity comes from investments in human capital, the sum of the skills, abilities, health, and motivation

of people.

Sam has recently graduated from college and has earned a degree. This degree shows the employers that Sam has acquired professional skills and should be paid more for them. This is known as...

• the traditional theory of wage determination

• equilibrium wage rate

• the theory of negotiated wages

• the signaling theory

Answer explanation

Signaling theory: This theory states that employers are willing to pay more for people with certificates, diplomas, degrees, and other indicators or “signals” of superior ability.

Which category of labor requires workers to operate complex equipment and machinery?

• Unskilled

• Semi skilled

• Skilled

• Professional

Answer explanation

Skilled labor includes workers who are able to operate complex equipment and can perform their tasks with little supervision. These workers represent a higher investment of human capital, especially in the areas of experience and training.

If a worker's skills are needed, they will be offered more money by an employer. This idea is known as...

• the traditional theory of wage determination

• equilibrium wage rate

• the theory of negotiated wages

• the signaling theory

Answer explanation

Traditional theory of wage determination: The theory states that the supply and demand for a worker’s skills and services determine the wage or salary.

A worker who has specialized training and a very high level of human capital.

• skilled worker

• professional worker

• semiskilled worker

• skilled worker

Answer explanation

Professional labor, or those individuals with the highest level of knowledge-based education and managerial skills.

Picking fruit requires no skills or training. This type of job falls under the category of...

• unskilled labor

• semi-skilled labor

• skilled labor

• professional labor

Answer explanation

Those who work primarily with their hands because they lack the training and skills required for other tasks make up the category.

Which category of labor usually receives the lowest wages?

• Unskilled

• Semi skilled

• Skilled

• Professional

Answer explanation

Unskilled workers are likely to have the least amount of human capital invested in them—and therefore they often earn the lowest wages.