Labor Economics
Practice Questions
Course Introduction
Labor Economics is the study of how labor markets function, exploring the behavior of employers and employees in the allocation of labor resources. The course examines key topics such as wage determination, labor supply and demand, human capital investment, unemployment, discrimination, and the impacts of government policies like minimum wage laws and labor unions. Through both theoretical frameworks and empirical analysis, students gain a deeper understanding of labor market dynamics and the implications for individuals and society. This course equips students with analytical tools to evaluate labor-related issues in the real world, drawing connections between economic theory and current policy debates.
Recommended Textbook
Labor Relations and Collective Bargaining 9th Edition by Michael R. Carrell
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Chapter 1: The American Labor Movement
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Sample Questions
Q1) The Knights of Labor sought social and economic reform for workers through political action.
A)True
B)False
Answer: True
Q2) Which of the following was the first national trade union to advocate collective bargaining, trade autonomy, exclusive jurisdiction, standard hours, and better wages and working conditions?
A) Clayton Act
B) Civil Service Reform Act
C) AFL and CIO merge
D) American Federation of Labor (AFL)
Answer: D
Q3) At the federal level, professional employees do not have the right to form labor organizations.
A)True
B)False
Answer: False
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Chapter 2: The Changing Workplace
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Sample Questions
Q1) In 2007, Honda Motor Company announced that its new plant in Greensburg, IN, would only accept applicants from _____ of the states' 92 counties.
A) 10
B) 15
C) 18
D) 20
Answer: D
Q2) The Agricultural revolution refers to all of the improvements listed below except:
A) Rotation of crops to keep soil fertile.
B) New breeding techniques of animal stock.
C) Expansion of farmland.
D) Draining of swamplands.
Answer: D
Q3) About 98% of national unions use web sites to provide information to members and the public.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Establishing a Bargaining Process
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Sample Questions
Q1) _________ benefits the union by stopping any rival unions for at least one year.
A) Certification
B) Decertification
C) National trends
D) AFL-CIO
Answer: A
Q2) Which of the following is not a criterion the NLRB reviews when determining a rational bargaining unit?
A) Desires of employer
B) History of bargaining
C) Community of interest
D) Public interest
Answer: A
Q3) The phrase "members in good standing" found in the union security clause refers to:
A) Employees are to join the union 30 to 90 days after being hired.
B) Employees required to pay union dues.
C) Employers are only allowed to hire union members.
D) Employers have the option to choose either full or limited membership.
Answer: D
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Page 5
Chapter 4: Organizational Campaigns
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Sample Questions
Q1) For an employer's interference with employee rights to be considered an unfair labor practice, the NLRB:
A) Requires proof of actual interference, restraint, or coercion.
B) Requires three eyewitnesses to the alleged act.
C) Will not consider the motive of the employer.
D) Uses a "reasonable probability test" of interference, restraint, or coercion.
Q2) The National Labor Relations Act considers all of the following employer activities to be unfair labor practices except:
A) Discrimination against employees because they are union members.
B) Forming a labor union.
C) Bargaining through multiemployer entities.
D) Refusing to bargain collectively with representatives of employees.
Q3) Boulwarism is not lawful under the National Labor Relation Act.
A)True
B)False
Q4) Employees of one employer cannot legally assist the employees of another employer to unionize.
A)True
B)False
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Chapter 5: The Negotiation Process
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Sample Questions
Q1) Pressure bargaining is used to pressure the other party into accepting something they would normally refuse.
A)True
B)False
Q2) The primary reason for prohibiting public employee strikes is:
A) Loss of federal income taxes.
B) The services provided are essential to the general welfare.
C) Elected officials do not know how to respond to strikes.
D) The government's wage and benefit levels are already too high.
Q3) Wages and unionization are related to one another within the public sector.
A)True
B)False
Q4) A successful negotiator examines what motivates the actions of the other party.
A)True
B)False
Q5) In negotiations, it is essential to know what the other party believes to be true and what is true.
A)True
B)False
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Chapter 6: Collective Bargaining: Strategies and Tactics
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Q1) This is mandated as a part of the collective bargaining process by the NLRA:
A) Confirmatory bias.
B) Fairness norm.
C) Reciprocity norm.
D) Good-faith bargaining
Q2) Interests of ________________________ are kept hidden.
A) Process bargaining
B) Collective bargaining
C) Distributive bargaining
D) Interest-based bargaining
Q3) The initial working sessions of collective bargaining are no more than monologues in which both parties present their list of demands and provide data and arguments to support their positions.
A)True
B)False
Q4) The need norm is known as keeping all significant issues in their current state.
A)True
B)False
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Chapter 7: Compensation Issues
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Sample Questions
Q1) The pyramiding of overtime refers to:
A) The same hours are eligible for more than one type of premium pay.
B) Working weekends and receiving overtime premium pay.
C) Double-time pay rates.
D) Working more than seven days in a row.
Q2) Wages and benefits are the "meat and potatoes" of collective bargaining.
A)True
B)False
Q3) Front-end loading refers to a deferred wage increase with a larger proportion of the total percentage increase in the second year of the agreement.
A)True
B)False
Q4) The classification method of job evaluation is primarily designed for large organizations with one location.
A)True
B)False
Q5) In existing labor proposals, an employee's "base" refers to COLA.
A)True
B)False
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Chapter 8: Employee Benefits
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Sample Questions
Q1) Comprehensive dental care plans do not require the employee to pay a deductible for covered services.
A)True
B)False
Q2) About ______% of all workers are included in the federal state unemployment insurance system.
A) 20
B) 62
C) 85
D) 97
Q3) Which of the following outside forces would most likely spur concession bargaining?
A) High inflation
B) Low unemployment
C) High profits
D) Low turnover
Q4) Management negotiators prefer contributory pension plans to noncontributory plans.
A)True
B)False
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Chapter 9: Seniority Rights
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Sample Questions
Q1) Along with wages and benefits, job security is a top priority for workers.
A)True
B)False
Q2) Management generally argues that seniority should never be considered as a criterion in promotion decisions.
A)True
B)False
Q3) An ____________ is a bid from one classification to another in the same pay grade, or from one pool position to another regardless of pay grade.
A) Up-bid
B) Down-bid
C) Lateral bid
D) Winning bid
Q4) Contract layoff procedures may fall into __________ general categories.
A) 3
B) 4
C) 5
D) 2
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Page 11
Chapter 10: Contract Implementation
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Q1) Controlling production is not generally considered an area of "management rights."
A)True
B)False
Q2) Neither party can be required to discuss or modify a contract during the contract term.
A)True
B)False
Q3) As long as labor contract covers wages, it serves as a "contract bar."
A)True
B)False
Q4) The "reserved rights theory" generally contends that management retains all rights including those relinquished in the contract.
A)True
B)False
Q5) Arbitrators are not bound by other employers' practices.
A)True
B)False
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Page 12
Chapter 11: Grievance and Disciplinary Procedures
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Q1) Gambling on company premises would normally result in an oral warning given to the employee.
A)True
B)False
Q2) An oral warning is not a disciplinary action.
A)True
B)False
Q3) Which of the following is a disciplinary procedure?
A) Conflict management resolution
B) Agreement clarification
C) Due process
D) Explain company rules
Q4) _____% of all nonmanufacturing contracts include theft as a reason for immediate dismissal.
A)20
B) 34
C)15
D)61
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Page 13
Chapter 12: The Arbitration Process
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Sample Questions
Q1) The use of arbitration in settling grievances has reduced the use of labor strikes and walkouts.
A)True
B)False
Q2) In grievance cases involving discharge due to possession and use of drugs, arbitrators have generally required employers to meet a higher standard of proof.
A)True
B)False
Q3) The federal Monday Holiday Act has substantially decreased employers' problems with holiday stretching.
A)True
B)False
Q4) The purpose of seniority is to:
A) Provide maximum security to workers with the longest continuous service.
B) Provide job security to union leaders.
C) Provide maximum security to older employees.
D) Provide a "perk" to the most meritorious employees.
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Chapter 13: Comparative Global Industrial Relations
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Q1) A mercantile system of economics is based on:
A) Amount of capital.
B) Volume by which its exports exceed its imports.
C) Imports exceeding wealth.
D) Increase status.
Q2) The new EU draft constitution is designed mainly to:
A) Create a single currency.
B) Simplify and clarify responsibilities.
C) Create greater legitimacy.
D) Create a unified passport to ease travel.
Q3) Governments ________ collective bargaining when the economy is ________ and ________ it when the economy is ____________.
A) encourage; strong; discourage; weak
B) encourage; weak; discourage; strong
C) encourage; weak; encourage; strong
D) discourage; strong; encourage; weak
Q4) IFAs have not been proven to be a good way to promote workers rights in a global arena.
A)True
B)False
Page 15
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