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Questions for Review: 1,2,3,4,6,7,9 and 13 Pag 287

1. Uses of Time Describe the three possible uses of an individu- 5. Substitution and Income Effects Suppose that the cost of al's time, and give an example of each. living increases, thereby reducing the purchasing power of your 2. Work and Utility Explain the concept of the "net utility income. If your money wage doesn't increase, you may work of work." How is it useful in developing the labor supply more hours because of this cost-of-living increase. Is this response curve? predominantly an income effect or a substitution effect? Explain. 3. Utility Maximization How does a rational consumer allocate 6. Nonwage Determinants of Labor Supply Suppose that two time among competing uses? jobs are exactly the same except that one is performed in an 4. Substitution and Income Effects Suppose that the substitu air-conditioned workplace. How could you measure the value tion effect of an increase in the wage rate exactly offsets the workers attach to such a job amenity? income effect as the hourly wage increases from $12 to $13. 7. Why Wages Differ Why might permanent wage differences What would the supply of labor curve look like over this range occur between different markets for labor or within the same of wages? Why? labor market?8. Case Study: Winner-Take-All Labor Markets What characterizes 11. Industrial Unions Why are unions more effective at raising a winner-take-all labor market? Offer some reasons why wages in oligopolistic industries than in competitive industries? corporate heads now earn relatively more than they did in 1980. 12. Craft Unions Both industrial unions and craft unions 9. Mediation and Arbitration Distinguish between mediation attempt to raise their members' wages, but each goes about it and binding arbitration. Under what circumstances do firms differently. Explain the difference in approaches and describe and unions use these tools? What is the role of a strike in the the impact these differences have on excess quantity of labor bargaining process? supplied. 10. The Strike Why might firms in industries with high fixed costs 13. Increasing Demand for Union Labor Identify four ways that be inclined to prevent strikes or end strikes quickly? unions try to increase the demand for unionized workers. D