Labour Relations Development Structure Proces 10th Edition by Fossum Test Bank

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Labour Relations Development Structure Proces 10th Edition by Fossum Test Bank

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8
Student: ___________________________________________________________________________
1. Prior to the passage of the Railway Labor Act and Wagner Act, employers and unions used government mediation to solve labor dispute.
True False
2. Permissive bargaining has no direct impact on management or labor costs. True False
3. Over the past 25 years, Democratic Presidents have been more beneficial for the unions. True False
4. The demand for goods and services in a competitive market is highly elastic. True False
5. Global competition and cheap labor available in other countries have reduced unions bargaining ability.
True False
6. In mature industries, even when the size of labor decreases, per-employee costs will escalate. True False
7. Private sector firms are ultimately answerable to unions. True False
8. When unemployment is low, hiring more employees has little effect on wage rates. True False
9. Employers are likely to be able to pass on the cost of a wage increase if they are in a noncompetitive product market.
True False
10. Marginal revenue product is the value of the output produced by existing workforce. True False
11. The marginal supply curve represents additional cost associated with expanding the workforce. True False
12. Unionization occurs because employees believe they will be able to achieve outcome that they are unable to obtain as individuals.
True False
13. Unions bargaining power increases when employer has monopoly in the product market. True False
14. In an industry where most employers offer essentially similar goods and services, wage increase is difficult to pass on to customers.
True False
15. Industrial-level bargaining can occur when employers are geographically restricted. True False
16. In construction, the bargaining is traditionally conducted nationally. True False
17. A conglomerate has a high bargaining power because it can withstand a long strike. True False
18. As per the Railway Labor Act, bargaining units do not have to be based on craft or noncraft. True False
19. In the airline industry, only ticketing agents have high bargaining power. True False
20. To improve conditions of union workers, union must compete with nonunion workers. True False
21. Wages and benefits in the hotel industry in Las Vegas are up to 40 percent higher than Reno due to unionization.
True False
22. Under the Railway Labor Act, it is not possible for unions to call for a strike. True False
23. Once labor and management are past the representation stage, the parties are free to make the bargaining unit less inclusive in negotiations.
True False
24. In multiemployer bargaining, no party can withdraw from negotiations without the consent of the other party, even if an impasse has been reached.
True False
25. Employers are more likely to grant a demand that will broadly affect the outcomes. True False
26. Why was the FMCS established?
A. To legislate rules that prohibited striking under any circumstances.
B. To empower employers to protect their interests through replacement labor. C. To help parties reach agreement only during national emergency situations. D. To define a set of prohibited unfair labor practices for unions and employers.
27. What does section 8(d) of the Taft-Hartley Act say about collective bargaining? A. To bargain collectively is a liability of the representatives of the employees.
B. Employer and union can bargain collectively only over issues of wages and hours. C. No party can request for a written contract incorporating agreement reached.
D. Neither party is obligated to reach an agreement or make a concession.
28. These bargaining issues do not require a response because they have no direct impact on management or labor costs.
A. Permissive B. Mandatory C. Prohibited D. Legislation
29. Which of the following classify as mandatory bargaining issues? A. Issues that have no direct effect on employees.
B. Internal union affairs.
C. Issues that affect the labor cost.
D. Issues prohibited by law.
30. What is the difference between a mandatory bargaining issue and a permissive bargaining issue? A. Union is prohibited to strike over mandatory bargaining issues.
B. Neither party can go to impasse on permissive bargaining issues.
C. Permissive bargaining issues are statutorily outlawed.
D.Mandatory bargaining issues do not require a response because they have no immediate effect on employment conditions.
31. How did World War II affect labor?
A. All disputes were put on hold until the war was over.
B. Prices were determined by employers and strikes were permitted.
C. All collective bargaining agreements required the approval of the federal government. D. Employers were allowed go on an impasse if disputes were not resolved.
32. Excessive industrial concentration is dealt with by: A. the Federal Mediation and Conciliation Service.
B. the National Mediation Board.
C. the Federal Trade Commission.
D. statutory laws.
33. What happens when an industry matures?
A. Due to growing competition, producers are forced to increase the labor cost.
B. Products become more expensive.
C. Production methods become less standardized forcing employers to hire skilled labor. D. Over time, an industry becomes dominated by relatively few firms.
34. Identify a characteristic of competitive markets.
A. Consumers know very little about product attributes and prices. B. The demand for goods and services is highly inelastic.
C. Producers are compelled to respond to price decreases.
D. There are relatively few producers selling similar products.
35. How does a competitive industry affect unions?
A. Unions can exercise higher monopoly power.
B. Unionization requires a great deal of effort.
C. Unions focus on geographically distributed producers. D. Unions focus on national service providers.
36. Which of the following is an example of a concentrated industry? A. Pharmaceutical industry
B. Insurance
C. Wireless telephone industry
D. Information technology industry
37. How did deregulation affect the airline industry?
A. Mechanics pay was hit the most initially.
B. Pilots salaries increased by 5 percent.
C. Flight attendants salaries dropped to 18 percent.
D. Flight attendants found alternative jobs in their occupation in other industries.
38. How does global competition affect unions?
A. It reduces unions bargaining ability.
B. Unions can bargain for higher wages because of the lack of skilled labor. C. Unions have more power to strike.
D. Unionized employees are protected against offshoring.
39. What causes an increase in the elasticity of demand for a firms product? A. The industry is no longer concentrated.
B. There is increased competition.
C. Nonavailability of labor.
D. Lack of substitute products.
40. All of the following statements about worker productivity and labor costs are true, EXCEPT: A. workers productivity increases over time.
B. experienced workers are more productive.
C. experienced workers have higher pay.
D. employers with more experienced workers have lower labor costs.
41. Health and pension costs are related to: A. skill distribution of the workforce. B. administrative and operational costs. C. ethnicity of the workforce.
D. medical and financial services.

42. How do firms deal with low profitability?
A. Increase investment in high-risk area.
B. Spin off part of the organization.
C. Increase skilled labor to improve productivity. D. Maximize profit from declining areas.
43. How did General Motors deal with low profitability? A. Spun off its parts-producing organization.
B. Hired only high-skilled workers.
C. Sold its parts-producing unit to Ford.
D. Diversified into various distinct industries.
44. Unions bargaining power has reduced over the past 20 years because: A. there is consumer demand for mass-produced goods.
B. employers are increasing the production side of their business.
C. there is increased demand for low-skilled labor.
D. a larger of share of jobs have moved into the professional arena.
45. The demand for skilled labor is low in relatively small bargaining units because: A. a certain skilled labor is essential for the production.
B. market demand for the final product is inelastic.
C. substitute or replacement workers are easily available.
D. the cost of labor is lower than production cost.
46. When is an employer forced to keep the labor cost low? A. When the product demand is inelastic.
B. When the employer is in a competitive product market. C. When the rate of unemployment is low.
D. When certain skills are essential for production.
47. The marginal revenue product is:
A. the value of output produced by hiring an additional worker.
B. the amount of product divided by the wages.
C. the price at which the product is allowed to be sold in the retail market. D. the total revenue generated times the labor cost.
48. Which of the following statements about competition and concentration in markets is true? A. In competitive industries, demand for a firms product is inelastic.
B. Concentrated industries are highly price-sensitive.
C. Labor demand in concentrated industries is less elastic.
D. Wage increase can be easily passed on to customers in competitive industries.
49. What would an employer in a competitive market do when the cost of labor increases? A. Reduce cost on capital.
B. Change capital-labor mix.
C. Hire unskilled workers.
D. Increase price of the product.
50. How have technological changes reduced unions bargaining power?
A. If the labor costs increase, investment in technology can make jobs redundant. B. Technological changes have increased the number of low-skill jobs.
C. Employers can easily pass off increased costs to customers.
D. Entry level investments have become very high for new players.

51. A monopsonist employer is:
A. a single producer of a specific product in a given market. B. the only unionized employer in a given market.
C. a single purchaser of labor in a given market.
D. the most dominating producer in a given market.
52. The marginal supply curve is:
A. the value of output produced by hiring an additional worker. B. the graph of product supply and demand trend.
C. the graph of labor supply and demand trend.
D. the additional cost associated with expanding the workforce.
53. What happens when union bargains for increased wages beyond a point where MS and MRP intersects with a monopsonist employer?
A. Employer will incur unviable labor costs.
B. Employer will be forced to lay off.
C. Employer is able to expand employment. D. Employers profitability will be increased.
54. Employers in the private sector are interested in:
A. maximizing long-term return to the investment in skills. B. maximizing long-term profits.
C. diversifying risk across portfolios.
D. increasing employment wages.
55. According to the text, what are the two major goals of unions? A. Higher wages and more members.
B. Maximizing profit and share value.
C. Reduce risk of investments and diversification.
D. Different wages for similar functions and diversification.
56. Which of the following is most likely to accept a large wage demand? A. An international airline company.
B. A construction company.
C. A lone food store in a remote community.
D. A steel plant.
57. In which of the following conditions will the employer have higher ability to continue operations? A. When the strike is in peak season.
B. When the firm is capital-intensive.
C. When high skilled labor is not easily replaceable.
D. When there are substitutes for employers products.
58. Under which condition is unions wage gains in bargaining higher? A. When new employers can easily enter the market.
B. When industrial concentration is low.
C. When foreign competition is low.
D. When union coverage by dominant union is low.
59. In a multiemployer bargaining unit:
A. a single set of negotiators and negotiated wages applies to all members.
B. companywide national level negotiation takes place.
C. a dominant union chooses a major employer as a bargaining target.
D. bargaining takes place in a business operating in several distinct industries.
60. Unions and employers form multiemployer bargaining units in industries where large numbers of relatively small employers exist because:
A. demand for each employers product is highly inelastic.
B. the employers can cut back on their use of labor and produce less.
C. wage increases can be easily passed on to customers.
D. the employers and unions want to create a varied wage pattern.
61. The most successful multiemployer bargaining occurs when: A. employers have varied nonlabor costs.
B. all employers are unionized.
C. entry costs are low for new firms.
D. negotiated wages do not apply to all.
62. When does industrywide bargaining take place?
A. When two or more national unions represent employees of a single major employer. B. When products or services are essentially commodities.
C. When a dominant union chooses a major employer as a bargaining target.
D. When the bargaining is done in a business operating in several distinct industries.
63. What is pattern bargaining?
A. Union targets one dominant employer in a highly concentrated industry.
B. Bargaining is done with many small employers from a particular geographic area. C. A large employer has many competitors with similar cost structures.
D. Union bargains with a small employer without many competitors.
64. A conglomerate has higher ability to take on a long strike at any subsidiary because: A. a few parts of its business are large relative to others.
B. its components and processes are not dependent on each other.
C. it is more successful than companies in a single industry.
D. it deals with several unions and has different expiration contracts.
65. What is coordinated bargaining?
A. Dominant union chooses a major employer as a bargaining target.
B. Bargaining in a business operating in several distinct industries.
C. Two or more national unions represent employees of a single employer. D. A single set of negotiators speaks for all employers.
66. Why do multinational organizations have higher bargaining power?
A. Multiple unions represent employees, so none of them has any bargaining power. B. Business processes are not interdependent.
C. One union covers all the employees located in various countries.
D. The can offset high bargaining cost by diversifying production across countries.
67. Under which act do bargaining units need to be organized on a craft basis? A. Taft-Hartley Act
B. Norris-LaGuardia Act
C. Railway Labor Act
D. Wagner Act
68. Which of the following can cause heavy losses by striking in the airline industry? A. Ticketing agents
B. Loaders
C. Pilots
D. Maintenance staff

69. How can unions reduce competition with nonunion members? A. Acquiring equivalent pattern agreements.
B. Covering only unskilled labor.
C. Extending organizing activity.
D. Unionizing only the dominant producer.
70. In terms of public policy and court decisions, which of the following statements is true? A. Under Railway Labor Act unions can call for a strike before negotiation starts.
B. Unions can strike once NMB declares an impasse.
C. President cannot prohibit strike if and impasse is declared by NMB.
D. During the period between 1982 and 2002, strikes occurred in only 3 percent cases.
71. What are the changes that occur from the time of infancy to maturity of an industry?

72. Describe the characteristics of a competitive industry.

73. How does the composition of the workforce affect productivity and labor costs of employers?

74. List some of the steps that a firm can take to increase profitability.

75. How is the marginal supply curve calculated?

76. How do unions demonstrate their effectiveness?

77. How do integrated facilities affect an employers ability to take on strikes?

78. Write a short note on industrywide bargaining.

79. What are the plausible reasons for a decline in pattern bargaining?

80. How does the Railway Labor Act affect unions ability to strike?

8 Key
1. Prior to the passage of the Railway Labor Act and Wagner Act, employers and unions used
(p. 216)
government mediation to solve labor dispute. FALSE
2. Permissive bargaining has no direct impact on management or labor costs.
(p. 217)
TRUE
4. The demand for goods and services in a competitive market is highly elastic.
(p. 221)
TRUE
Fossum Chapter 08 #1
Fossum Chapter 08 #2 3. Over the past 25 years, Democratic Presidents have been more beneficial for the unions.
(p. 220)
FALSE
Fossum Chapter 08 #3
Fossum Chapter 08 #4 5. Global competition and cheap labor available in other countries have reduced unions bargaining
(p. 225)
ability. TRUE
Fossum Chapter 08 #5 6. In mature industries, even when the size of labor decreases, per-employee costs will escalate.
(p. 226)
TRUE
7. Private sector firms are ultimately answerable to unions.
(p. 227)
FALSE
Fossum Chapter 08 #6
Fossum Chapter 08 #7 8. When unemployment is low, hiring more employees has little effect on wage rates.
(p. 228)
FALSE
Fossum Chapter 08 #8 9. Employers are likely to be able to pass on the cost of a wage increase if they are in a noncompetitive
(p. 228)
product market. TRUE
Fossum Chapter 08 #9 10. Marginal revenue product is the value of the output produced by existing workforce.
(p. 229)
FALSE
Fossum Chapter 08 #10 11. The marginal supply curve represents additional cost associated with expanding the workforce.
(p. 232)
TRUE
Fossum Chapter 08 #11 12. Unionization occurs because employees believe they will be able to achieve outcome that they are
(p. 234)
unable to obtain as individuals. TRUE
Fossum Chapter 08 #12 13. Unions bargaining power increases when employer has monopoly in the product market.
(p. 235)
TRUE
14. In an industry where most employers offer essentially similar goods and services, wage increase is
(p. 239)
difficult to pass on to customers. TRUE
Fossum Chapter 08 #13
Fossum Chapter 08 #14
15. Industrial-level bargaining can occur when employers are geographically restricted.
(p. 241)
FALSE
16. In construction, the bargaining is traditionally conducted nationally.
(p. 241)
FALSE
Fossum Chapter 08 #15
Fossum Chapter 08 #16 17. A conglomerate has a high bargaining power because it can withstand a long strike.
(p. 243- 244)
TRUE
Fossum Chapter 08 #17 18. As per the Railway Labor Act, bargaining units do not have to be based on craft or noncraft.
(p. 245)
FALSE
19. In the airline industry, only ticketing agents have high bargaining power.
(p. 245)
FALSE
Fossum Chapter 08 #18
Fossum Chapter 08 #19 20. To improve conditions of union workers, union must compete with nonunion workers.
(p. 245)
FALSE
Fossum Chapter 08 #20 21. Wages and benefits in the hotel industry in Las Vegas are up to 40 percent higher than Reno due to
(p. 246)
unionization. TRUE
22. Under the Railway Labor Act, it is not possible for unions to call for a strike.
(p. 247)
FALSE
Fossum Chapter 08 #21
Fossum Chapter 08 #22 23. Once labor and management are past the representation stage, the parties are free to make the
(p. 248)
bargaining unit less inclusive in negotiations. FALSE
Fossum Chapter 08 #23 24. In multiemployer bargaining, no party can withdraw from negotiations without the consent of the
(p. 248)
other party, even if an impasse has been reached. TRUE
Fossum Chapter 08 #24 25. Employers are more likely to grant a demand that will broadly affect the outcomes.
(p. 248)
FALSE
26. Why was the FMCS established?
Fossum Chapter 08 #25
Fossum Chapter 08 #26
(p. 216)
A. To legislate rules that prohibited striking under any circumstances.
B. To empower employers to protect their interests through replacement labor. C. To help parties reach agreement only during national emergency situations. D. To define a set of prohibited unfair labor practices for unions and employers.
27. What does section 8(d) of the Taft-Hartley Act say about collective bargaining?
(p. 217)
A. To bargain collectively is a liability of the representatives of the employees.
B. Employer and union can bargain collectively only over issues of wages and hours. C. No party can request for a written contract incorporating agreement reached.
D. Neither party is obligated to reach an agreement or make a concession.
Fossum Chapter 08 #27

28. These bargaining issues do not require a response because they have no direct impact on management
(p. 217)
or labor costs. A. Permissive
B. Mandatory
C. Prohibited
D. Legislation
29. Which of the following classify as mandatory bargaining issues?
(p. 217)
A. Issues that have no direct effect on employees. B. Internal union affairs.
C. Issues that affect the labor cost.
D. Issues prohibited by law.
(p. 219)
A. All disputes were put on hold until the war was over.
B. Prices were determined by employers and strikes were permitted.
C. All collective bargaining agreements required the approval of the federal government. D. Employers were allowed go on an impasse if disputes were not resolved.
Fossum Chapter 08 #28
Fossum Chapter 08 #29 30. What is the difference between a mandatory bargaining issue and a permissive bargaining issue?
(p. 217)
A. Union is prohibited to strike over mandatory bargaining issues.
B. Neither party can go to impasse on permissive bargaining issues.
C. Permissive bargaining issues are statutorily outlawed.
D.Mandatory bargaining issues do not require a response because they have no immediate effect on
employment conditions.
31. How did World War II affect labor?
Fossum Chapter 08 #30
32. Excessive industrial concentration is dealt with by:
Fossum Chapter 08 #31
Fossum Chapter 08 #32
(p. 220)
A. the Federal Mediation and Conciliation Service. B. the National Mediation Board.
C. the Federal Trade Commission.
D. statutory laws.
33. What happens when an industry matures?
(p. 220)
A. Due to growing competition, producers are forced to increase the labor cost.
B. Products become more expensive.
C. Production methods become less standardized forcing employers to hire skilled labor. D. Over time, an industry becomes dominated by relatively few firms.
34. Identify a characteristic of competitive markets.
Fossum Chapter 08 #33
Fossum Chapter 08 #34
Fossum Chapter 08 #35
(p. 221)
A. Consumers know very little about product attributes and prices. B. The demand for goods and services is highly inelastic.
C. Producers are compelled to respond to price decreases.
D. There are relatively few producers selling similar products.
35. How does a competitive industry affect unions?
(p. 221)
A. Unions can exercise higher monopoly power.
B. Unionization requires a great deal of effort.
C. Unions focus on geographically distributed producers. D. Unions focus on national service providers.

36. Which of the following is an example of a concentrated industry?
(p. 221)
A. Pharmaceutical industry
B. Insurance
C. Wireless telephone industry
D. Information technology industry
37. How did deregulation affect the airline industry?
Fossum Chapter 08 #36
Fossum Chapter 08 #37
Fossum Chapter 08 #38
(p. 222)
A. Mechanics pay was hit the most initially.
B. Pilots salaries increased by 5 percent.
C. Flight attendants salaries dropped to 18 percent.
D. Flight attendants found alternative jobs in their occupation in other industries.
38. How does global competition affect unions?
(p. 225)
A. It reduces unions bargaining ability.
B. Unions can bargain for higher wages because of the lack of skilled labor. C. Unions have more power to strike.
D. Unionized employees are protected against offshoring.
39. What causes an increase in the elasticity of demand for a firms product?
(p. 225)
A. The industry is no longer concentrated. B. There is increased competition.
C. Nonavailability of labor.
D. Lack of substitute products.
Fossum Chapter 08 #39 40. All of the following statements about worker productivity and labor costs are true, EXCEPT:
(p. 226)
A. workers productivity increases over time.
B. experienced workers are more productive.
C. experienced workers have higher pay.
D. employers with more experienced workers have lower labor costs.
41. Health and pension costs are related to:

Fossum Chapter 08 #40
Fossum Chapter 08 #41
Fossum Chapter 08 #42
Fossum Chapter 08 #43
(p. 226)
A. skill distribution of the workforce. B. administrative and operational costs. C. ethnicity of the workforce.
D. medical and financial services.
42. How do firms deal with low profitability?
(p. 227)
A. Increase investment in high-risk area.
B. Spin off part of the organization.
C. Increase skilled labor to improve productivity. D. Maximize profit from declining areas.
43. How did General Motors deal with low profitability?
(p. 227)
A. Spun off its parts-producing organization. B. Hired only high-skilled workers.
C. Sold its parts-producing unit to Ford.
D. Diversified into various distinct industries.
44. Unions bargaining power has reduced over the past 20 years because:
(p. 227)
A. there is consumer demand for mass-produced goods.
B. employers are increasing the production side of their business. C. there is increased demand for low-skilled labor.
D. a larger of share of jobs have moved into the professional arena.
Fossum Chapter 08 #44
45. The demand for skilled labor is low in relatively small bargaining units because:
(p. 227- 228)
A. a certain skilled labor is essential for the production. B. market demand for the final product is inelastic.
C. substitute or replacement workers are easily available. D. the cost of labor is lower than production cost.
46. When is an employer forced to keep the labor cost low?
Fossum Chapter 08 #45
Fossum Chapter 08 #46
(p. 228)
A. When the product demand is inelastic.
B. When the employer is in a competitive product market. C. When the rate of unemployment is low.
D. When certain skills are essential for production.
47. The marginal revenue product is:
(p. 229)
A. the value of output produced by hiring an additional worker.
B. the amount of product divided by the wages.
C. the price at which the product is allowed to be sold in the retail market. D. the total revenue generated times the labor cost.
Fossum Chapter 08 #47 48. Which of the following statements about competition and concentration in markets is true?
(p. 229)
A. In competitive industries, demand for a firms product is inelastic.
B. Concentrated industries are highly price-sensitive.
C. Labor demand in concentrated industries is less elastic.
D. Wage increase can be easily passed on to customers in competitive industries.
Fossum Chapter 08 #48 49. What would an employer in a competitive market do when the cost of labor increases?
(p. 230)
A. Reduce cost on capital.
B. Change capital-labor mix.
C. Hire unskilled workers.
D. Increase price of the product.
50. How have technological changes reduced unions bargaining power?
Fossum Chapter 08 #49
Fossum Chapter 08 #50
Fossum Chapter 08 #51
Fossum Chapter 08 #52
(p. 16)
A. If the labor costs increase, investment in technology can make jobs redundant. B. Technological changes have increased the number of low-skill jobs.
C. Employers can easily pass off increased costs to customers.
D. Entry level investments have become very high for new players.
51. A monopsonist employer is:
(p. 232)
A. a single producer of a specific product in a given market. B. the only unionized employer in a given market.
C. a single purchaser of labor in a given market.
D. the most dominating producer in a given market.
52. The marginal supply curve is:
(p. 232)
A. the value of output produced by hiring an additional worker. B. the graph of product supply and demand trend.
C. the graph of labor supply and demand trend.
D. the additional cost associated with expanding the workforce.

53. What happens when union bargains for increased wages beyond a point where MS and MRP intersects
(p. 232)
with a monopsonist employer?
A. Employer will incur unviable labor costs. B. Employer will be forced to lay off.
C. Employer is able to expand employment. D. Employers profitability will be increased.
54. Employers in the private sector are interested in:
Fossum Chapter 08 #53
Fossum Chapter 08 #54
Fossum Chapter 08 #55
(p. 233)
A. maximizing long-term return to the investment in skills. B. maximizing long-term profits.
C. diversifying risk across portfolios.
D. increasing employment wages.
55. According to the text, what are the two major goals of unions?
(p. 234)
A. Higher wages and more members.
B. Maximizing profit and share value.
C. Reduce risk of investments and diversification.
D. Different wages for similar functions and diversification.
56. Which of the following is most likely to accept a large wage demand?
(p. 235)
A. An international airline company.
B. A construction company.
C. A lone food store in a remote community. D. A steel plant.
Fossum Chapter 08 #56 57. In which of the following conditions will the employer have higher ability to continue operations?
(p. 236)
A. When the strike is in peak season.
B. When the firm is capital-intensive.
C. When high skilled labor is not easily replaceable. D. When there are substitutes for employers products.
58. Under which condition is unions wage gains in bargaining higher?
Fossum Chapter 08 #57
Fossum Chapter 08 #58
Fossum Chapter 08 #59
(p. 237)
A. When new employers can easily enter the market. B. When industrial concentration is low.
C. When foreign competition is low.
D. When union coverage by dominant union is low.
59. In a multiemployer bargaining unit:
(p. 239)
A. a single set of negotiators and negotiated wages applies to all members.
B. companywide national level negotiation takes place.
C. a dominant union chooses a major employer as a bargaining target.
D. bargaining takes place in a business operating in several distinct industries.
60. Unions and employers form multiemployer bargaining units in industries where large numbers of
(p. 239)
relatively small employers exist because:
A. demand for each employers product is highly inelastic.
B. the employers can cut back on their use of labor and produce less. C. wage increases can be easily passed on to customers.
D. the employers and unions want to create a varied wage pattern.
Fossum Chapter 08 #60
61. The most successful multiemployer bargaining occurs when:
(p. 240)
A. employers have varied nonlabor costs. B. all employers are unionized.
C. entry costs are low for new firms.
D. negotiated wages do not apply to all.
62. When does industrywide bargaining take place?
(p. 240)
A. When two or more national unions represent employees of a single major employer. B. When products or services are essentially commodities.
C. When a dominant union chooses a major employer as a bargaining target.
D. When the bargaining is done in a business operating in several distinct industries.
63. What is pattern bargaining?
(p. 242)
A. Union targets one dominant employer in a highly concentrated industry.
B. Bargaining is done with many small employers from a particular geographic area. C. A large employer has many competitors with similar cost structures.
D. Union bargains with a small employer without many competitors.
Fossum Chapter 08 #63 64. A conglomerate has higher ability to take on a long strike at any subsidiary because:
(p. 243- 244)
A. a few parts of its business are large relative to others.
B. its components and processes are not dependent on each other.
C. it is more successful than companies in a single industry.
D. it deals with several unions and has different expiration contracts.
Fossum Chapter 08 #61
Fossum Chapter 08 #62
65. What is coordinated bargaining?
Fossum Chapter 08 #64
Fossum Chapter 08 #65
(p. 244)
A. Dominant union chooses a major employer as a bargaining target.
B. Bargaining in a business operating in several distinct industries.
C. Two or more national unions represent employees of a single employer. D. A single set of negotiators speaks for all employers.
66. Why do multinational organizations have higher bargaining power?
(p. 244)
A. Multiple unions represent employees, so none of them has any bargaining power. B. Business processes are not interdependent.
C. One union covers all the employees located in various countries.
D. The can offset high bargaining cost by diversifying production across countries.
67. Under which act do bargaining units need to be organized on a craft basis?
(p. 245)
A. Taft-Hartley Act
B. Norris-LaGuardia Act C. Railway Labor Act D. Wagner Act
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Fossum Chapter 08 #67 68. Which of the following can cause heavy losses by striking in the airline industry?
(p. 245)
A. Ticketing agents B. Loaders
C. Pilots
D. Maintenance staff
69. How can unions reduce competition with nonunion members?
(p. 245)
A. Acquiring equivalent pattern agreements. B. Covering only unskilled labor.
C. Extending organizing activity.
D. Unionizing only the dominant producer.
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70. In terms of public policy and court decisions, which of the following statements is true?
(p. 247)
A. Under Railway Labor Act unions can call for a strike before negotiation starts.
B. Unions can strike once NMB declares an impasse.
C. President cannot prohibit strike if and impasse is declared by NMB.
D. During the period between 1982 and 2002, strikes occurred in only 3 percent cases.
Fossum Chapter 08 #70 71. What are the changes that occur from the time of infancy to maturity of an industry?
(p. 220)
The growth and maturation of most industries seem to follow a general pattern. During an industrys infancy, production is labor-intensive. Product characteristics are relatively diverse. As consumer preferences are revealed, some producers go out of business because their products do not meet consumers needs. As production methods become standardized, capital and cheaper labor are substituted for skilled craft work, and more efficient producers lower prices to gain market share, thus driving marginal producers from the industry. Over time, an industry becomes dominated by relatively few firms, and the less dominant either mimic the leader or occupy niches in which the leader chooses not to produce.
72. Describe the characteristics of a competitive industry. (p. 221)
Competitive market includes many producers that sell similar products. Consumers have good information about product attributes and prices. Producers that sell at prices above the market will not be able to remain in business. The demand for goods and services in this type of market is highly elastic, meaning that if a producer decreases its prices, buyers will quickly shift toward purchases from this low-price firm. The reverse would happen to producers that did not respond to the decrease. In a competitive market, if a producer does not quickly match a drop in the market price, it will be unable to sell enough to remain in business.
Fossum Chapter 08 #72 73. How does the composition of the workforce affect productivity and labor costs of employers?
(p. 226)
In general, worker productivity improves with experience, and experience is gained over timethus, age and experience are inextricably linked. Pay also generally increases with experience, particularly if the experience is translated into observable performance having increasing economic value. As worker productivity increases with experience, fewer workers are required to produce a given level of output. As employers gain experience with production methods, refinements are made that improve productivity.
74. List some of the steps that a firm can take to increase profitability. (p. 227)
Management seeks to maximize profits in its present operations and to shift investment from areas with declining returns to those where improvement is anticipated, with the greatest amount of flexibility possible. Firms might be expected to leave previous markets and enter new ones as the environment changes the rates of return for various industries. Mergers and acquisitions reflect the mobility of capital. If a firm is not making an acceptable return on its equity, a lower-earning division can be sold, forcing unions to deal with successor owners. Part of an organization can also be spun off.
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75. How is the marginal supply curve calculated? (p. 232)
If one worker could be hired at $10 but the wage would need to increase to $11 before a second would take the job, the cost (marginal supply) of adding the second worker is $11 + $1 increase for the previously hired worker, or $12.
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76. How do unions demonstrate their effectiveness? (p. 234)
Unions demonstrate their effectiveness by negotiating contracts that improve employment conditions for their members, attract new members, and organize additional units. As an institution, the union desires security as the employees representative through negotiated union shop agreements.
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77. How do integrated facilities affect an employers ability to take on strikes? (p. 236)
When output from one plant is necessary for production in several others, there is more bargaining power in the supplier plant. This situation frequently occurs in the auto industry at plants producing parts like electrical equipment or radiators for all vehicles in a manufacturers line. Problems associated with strikes in supplier facilities have become more critical as manufacturers have moved toward just-in-time parts deliveries.
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78. Write a short note on industrywide bargaining. (p. 240-
241)
While most multiemployer bargaining is done within a relatively small geographic area, it also
occurs on an industrywide basis when products or services are essentially commodities. However, maintaining an industrywide bargaining structure is a perilous proposition. As more employers
are included, their sizes and abilities to take strikes become dissimilar. Where employees change employers frequently and employers are widely distributed geographically, industrial-level bargaining can occur.
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79. What are the plausible reasons for a decline in pattern bargaining? (p. 242)
Some say pattern bargaining broke down during the 1980s due to major variations in plant efficiency levels among employers with several plants and between old and new plants in areas with low unionization. Managers responsible for bargaining increasingly cited firm profitability and labor cost measures as more important than industry wage patterns in their bargaining stances.
80. How does the Railway Labor Act affect unions ability to strike? (p. 247)

Bargaining under Railway Labor Act provisions is often quite protracted, since no strike is possible until an impasse is declared by the NMB. At that point, the union may not strike until another 30 days have elapsed. Then, if a strike is called, the union runs the risk that the President of the United States will establish an emergency board and prohibit the continuation of the strike for 60 days while the board examines the situation.
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Category # of Question s
Fossum Chapter 08 80
8 Summary

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