1.
Unions are expected to:
A) attempt to reduce labor's share of total costs.
B) try to reduce the price elasticity of demand for the final product.
C) increase the price elasticity of supply for other factors of production.
D) increase the availability of substitutes for union labor.
2.
Unions are likely to be less successful in negotiating higher wages in those labor markets in which:
A) the demand for the final product is more elastic.
B) there are few close substitutes for union workers.
C) the price elasticity of supply for other factors of production is relatively high.
D) labor costs comprise a small share of total costs.
3.
Economic theory unambiguously predicts that total employment will be reduced when an effective minimum wage law is introduced:
A) in a monopsony labor market.
B) in a perfectly competitive labor market if all workers in this market are covered by the minimum wage law.
C) in a perfectly competitive market, even if some workers and firms are not covered by the minimum wage law.
D) under no circumstances
4.
An effective minimum wage law introduced into a monopsony labor market is expected to cause employment to:
A) rise.
B) fall.
C) remain unchanged.
D) change in an unpredictable manner.
5.
Suppose that an effective minimum wage law is introduced into some, but not all, firms in a perfectly competitive market. It is expected that employment in the covered sector will:
A) rise.
B) fall.
C) remain unchanged.
D) change in an unpredictable manner.

