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| 1 | |
Human capital can be described as: |
| | A) | the tools used by workers to enhance productivity. |
| | B) | a person's inherited abilities. |
| | C) | the stock of expertise accumulated by a worker. |
| | D) | the number of years a worker has spent in education. |
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| 2 | |
The supply of highly educated workers is fixed in long run. |
| | A) | True |
| | B) | False |
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| 3 | |
________________ says that, in going into higher education, people who know that they are smart send a signal to firms that they are the high-productivity workers of the future. |
| | A) | production theory |
| | B) | signalling theory |
| | C) | labour market theory |
| | D) | education theory |
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| 4 | |
To be successful a union must be able to restrict the firm’s: |
| | A) | demand. |
| | B) | growth. |
| | C) | labour supply. |
| | D) | inventories. |
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| 5 | |
A closed shop is an agreement that all a firm’s workers will be members of a: |
| | A) | trade union. |
| | B) | trade association. |
| | C) | trade club. |
| | D) | trade scheme. |
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| 6 | |
Typically, Union members earn more than people not belonging to a union in unskilled jobs. |
| | A) | True |
| | B) | False |
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| 7 | |
In a perfectly competitive industry, if a union in a single firm raises wages: |
| | A) | increases profitability |
| | B) | increases market share |
| | C) | drives the firm out of business. |
| | D) | increases barriers to entry. |
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| 8 | |
Skilled labour is relatively ______ because it is costly to acquire _______. |
| | A) | scarce, human capital |
| | B) | scarce, new technology |
| | C) | abundant, human capital |
| | D) | abundant, new technology |
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| 9 | |
The investment decision for human capital involves comparing the _______ costs with the _______ value of extra income or other benefits in the future. |
| | A) | future, future |
| | B) | present, present |
| | C) | future, present |
| | D) | present, future |
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| 10 | |
If the present value of the benefits outweighs the present value of the costs incurred, the educational investment in improving human capital by further education makes sense. |
| | A) | True |
| | B) | False |
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| 11 | |
The most important explanation for wage differentials is: |
| | A) | regional variation. |
| | B) | unionization. |
| | C) | relative danger. |
| | D) | differences in skills. |
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| 12 | |
Skilled labour is relatively scarce because: |
| | A) | there are too few teachers. |
| | B) | too few student places in higher education. |
| | C) | it is costly to acquire human capital. |
| | D) | teachers’ salaries are too low. |
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| 13 | |
The difference between firm-specific skills and general skills is that ____________. |
| | A) | firm specific skills are compensated in the market place whereas general skills are not |
| | B) | firm specific skills will not be compensated in the market place whereas general skills will be |
| | C) | firm specific skills can be acquired through higher education whereas general skills cannot |
| | D) | a firm will not invest in workers’ firm specific skills whereas it will invest in its workers general skills |
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| 14 | |
The difference between screening theory and human-capital theory is: |
| | A) | According to screening theory education raises workers productivity but according to human capital theory it does not. |
| | B) | According to screening theory education does not raise workers productivity but according to human capital theory it does. |
| | C) | According to screening theory education can only be acquired on the job but according to human capital theory it can only be acquired through higher education. |
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| 15 | |
By restricting labour supply a trade union can ____________ and ___________. |
| | A) | increase the wage, increase employment |
| | B) | maintain the wage, increase employment |
| | C) | increase the wage, lower employment |
| | D) | maintain the wage, lower employment |
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| 16 | |
In the UK under a _________ of the labour force belong to a trade union. |
| | A) | quarter |
| | B) | third |
| | C) | half |
| | D) | three-quarters |
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| 17 | |
Unions achieve a higher wage differential the more _______________ and the more ___________. |
| | A) | inelastic the demand for labour, they can restrict the supply of labour |
| | B) | members they have, aggressively they behave |
| | C) | the economy is growing, people prefer leisure |
| | D) | the productivity s growing, vacancies exist |
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| 18 | |
A closed shop is a union that has no room for additional members. |
| | A) | True |
| | B) | False |
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| 19 | |
Women and non-whites on average receive lower incomes than white men because: |
| | A) | of discrimination. |
| | B) | of educational disadvantage. |
| | C) | firms are reluctant to invest in training. |
| | D) | of all of the above. |
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| 20 | |
In the UK, in recent years, union membership has _________, and days of work lost because of strikes has __________. |
| | A) | grown, declined |
| | B) | declined, declined |
| | C) | declined, grown |
| | D) | grown, grown |
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