Lesson 5.3.2

5.3.2 Trade unions and bilateral monopoly Quiz: OCR Economics, Unit 5

20 questions

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Lesson 5.3.2, Trade unions and bilateral monopoly: 20 multiple choice questions for the OCR Economics (H460), Unit 5: The labour market, written with Revision Ninja.

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The 20 questions

  1. What market structure exists when a single buyer of labour faces a single supplier of labour?

    • Perfect competition
    • Monopsony
    • Oligopsony
    • Bilateral monopoly

  2. What is the main objective of a trade union during collective wage bargaining?

    • Maximise tax revenue
    • Maximise member wages
    • Minimise total employment
    • Maximise firm profits

  3. What term describes a single employer dominating the demand for labour in a market?

    • Monopoly
    • Duopoly
    • Oligopoly
    • Monopsony

  4. Where does a profit-maximising monopsonist set its level of labour employment?

    • MRPL equals zero
    • MCL equals MRPL
    • ACL equals MRPL
    • MCL equals ACL

  5. How does a monopsonist determine the wage rate offered to its employees?

    • The ACL curve
    • Total revenue
    • The MCL curve
    • The MRPL curve

  6. Compared to perfect competition, what is the effect of a monopsony on wages and employment?

    • Lower wages and employment
    • Higher wages and employment
    • Lower wages, higher employment
    • Higher wages, lower employment

  7. What happens to employment if a trade union sets a wage floor in a monopsony?

    • Employment reaches zero
    • Employment must fall
    • Employment remains unchanged
    • Employment can increase

  8. In a perfectly competitive labour market, what is the effect of a trade union wage demand?

    • Creates labour surplus
    • Increases total employment
    • Creates labour shortage
    • Eliminates unemployment

  9. What curve represents the supply of labour facing a single firm in a monopsony?

    • Marginal labour cost
    • Average labour cost
    • Marginal revenue product
    • Total revenue product

  10. Why is the marginal cost of labour higher than the wage rate for a monopsonist?

    • Higher wage for all
    • Decreasing returns to scale
    • Lower wage for all
    • Fixed marginal revenue

  11. What determines the final outcome of wage negotiations in a bilateral monopoly?

    • Government wage controls
    • Relative bargaining power
    • Minimum wage laws
    • Marginal cost only

  12. What term describes the percentage of a workforce that belongs to a trade union?

    • Union concentration
    • Union coverage
    • Labour participation rate
    • Union density

  13. If labour demand is highly wage inelastic, what happens when a union raises wages?

    • Significant employment gain
    • Small employment drop
    • Large employment drop
    • No wage increase

  14. What effect does a trade union wage floor have on a monopsonist's MCL curve?

    • Makes it vertical
    • Eliminates the curve
    • Makes it horizontal
    • Shifts it upward

  15. What process involves trade unions and employers negotiating terms and conditions of employment?

    • Arbitrary pricing
    • Individual contracting
    • Monistic regulation
    • Collective bargaining

  16. A monopsonist hires 10 workers at £10 per hour. To hire 11, it pays £11. What is MCL?

    • £11
    • £1
    • £21
    • £121

  17. Under what condition will a union wage demand cause maximum job losses in a competitive market?

    • Perfectly inelastic demand
    • Elastic labour demand
    • Inelastic labour demand
    • Zero wage elasticity

  18. What term describes workers agreeing to higher output in exchange for higher union wages?

    • Productivity bargaining
    • Collective withholding
    • Wage discrimination
    • Monopsonistic extraction

  19. Why might bilateral monopoly increase economic efficiency compared to a pure monopsony?

    • Creates absolute monopoly
    • Raises employment levels
    • Eliminates trade unions
    • Eliminates all wages

  20. What is the primary cause of market failure in a monopsonistic labour market?

    • Excessively high wages
    • Over-employment of labour
    • Uncontrolled inflation
    • Under-employment of labour

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