Figure 19-6

Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The equilibrium market wage is $15. Suppose a labor union forms and subsequently negotiates an hourly wage of $25.00. Which of the following statements is true?

a. Widget workers benefit from having a higher wage.

b. Widget firms benefit from receiving a higher profit.

c. Widget firms will not hire any workers as a result.

d.

There is no impact on the labor market from the higher negotiated wage

2.

According to utilitarians, the ultimate objective of public actions should be to

a. ensure the poor can afford an adequate diet.

b. distribute income uniformly.

c. maximize the sum of individual utility.

d. prevent all people from experiencing diminishing marginal utility.

3.

igure 19-6

Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The equilibrium market wage is $15. Suppose a labor union forms and subsequently negotiates an hourly wage of $25.00. Which of the following statements is true?

a. Widget workers benefit from having a higher wage.

b. Widget firms benefit from receiving a higher profit.

c. Widget firms will not hire any workers as a result.

d.

There is no impact on the labor market from the higher negotiated wage

4,

The normal life cycle pattern of income

a. contributes to more inequality in the distribution of annual income and to more inequality in living standards.

b. contributes to more inequality in the distribution of annual income, but it does not necessarily contribute to more inequality in living standards.

c. contributes to less inequality in the distribution of annual income and to less inequality in living standards.

d.

has no effect on either the distribution of annual income or on living standards

5.

Given that the median male is better paid than the median female, which of the following is a valid explanation for wage differences?

a. compensating differentials

b. differences in human capital

c. discrimination

d.

All of the above can be a partial explanation.

6.

Economists who attempt to explain the increasing earnings gap between skilled and unskilled workers offer two main hypotheses:

a. one hypothesis emphasizes education, and the other emphasizes compensating differentials.

b. one hypothesis emphasizes education, and the other international trade.

c. one hypothesis emphasizes international trade, and the other emphasizes technology.

d. one hypothesis emphasizes technology, and the other emphasizes compensating differentials.