Productivity and Labor Relations Study Guide
1.A baker calculates that by spending $16 on labor and materials, she can bake 10 cakes a day. $24 will allow her to bake
12 cakes, while $36 spent on labor and materials produces 14 cakes. In terms of capital and labor, the baker
has
decreasing marginal returns.
constant marginal returns.
increasing marginal returns.
negative marginal returns.
2.
The union representing flight attendants at American Airlines rejected an offer of arbitration
from federal mediators yesterday, assuring the start of a 30-day cooling-off period after
which its members will be legally free to strike.
The major issue dividing the two sides is pay. The flight attendants now earn $15,000 to
$35,000 a year, the union said. American said that the union’s last proposal would cost the
airline $570 million more over six years than its final offer. The union said that the gap was
closer to $200 million.
Source: The New York Times, May 31, 2001.
3.Which of the following is a fixed cost for a store?
inventory
short-term workers
advertising
rent
4.Workers with knowledge-based education and managerial skills are
unskilled labor.
professional labor.
skilled labor.
semiskilled labor.
5.
Based on the chart, workers who belong to a union make up what percentage of employed workers?
6.
Some analysts in the past contended that the computer age would result in less work for
humans. What’s happening, however, is that more people are working more hours. The
average number of hours worked per week has increased from 40 hours in 1973 to 50 hours
today. Why is this happening? One explanation is that computers don’t replace human
thought and endeavor, they extend it. By allowing people to communicate easily at any time
from any place, computers increase the amount of time people work.
Which of the following situations best exemplifies the main point of the passage?
7.
8.
According to the graph, in 1980, women were earning approximately
According to the graph, if men in general were earning approximately $20,000 in 1965, women would have been
earning approximately
9.Complete the following sentence: At the most profitable level of production, a firm’s marginal cost will be _____ the
market price.
set by
greater than
less than
equal to
10.
Study the graphs. Compared to janitors, the graph for surgeons shows
11.
Based on the illustration, workers in Texas
Production Schedule
Number
of
Workers
Total
Product
Marginal
Product*
0
0
0
1
7
7
2
20
13
3
38
18
4
62
24
5
90
28
6
110
20
7
129
19
8
138
9
9
144
6
10
148
4
11
145
–3
12
135
–10
*All figures in terms of output per day.
Costs
Revenues
Profit
Total
Fixed
Costs
Total
Variable
Costs
Total
Costs
Marginal
Costs
Total
Revenue
Marginal
Revenue
Total
Profit
$50
50
50
50
50
50
50
50
50
50
50
50
50
$0
90
180
270
360
450
540
630
720
810
900
990
1,080
$50
140
230
320
410
500
590
680
770
860
950
1,040
1,130
-$12.86
6.92
5.00
3.75
3.21
4.50
4.74
10.00
15.00
22.50
---
$0
105
300
570
930
1,350
1,650
1,935
2,070
2,160
2,220
2,175
2,025
-$15
15
15
15
15
15
15
15
15
15
15
15
–$50
–35
70
250
520
850
1,060
1,210
1,300
1,300
1,270
1,135
895
12.
According to the table, the company must hire at least how many workers to earn a profit?
13.Workers who have the skills to operate machines and who require a minimum amount of training are
skilled labor.
professional labor.
semiskilled labor.
unskilled labor.
14.
According to the graph, union membership grew by the largest percentage in which 5-year period?
15.
Based on the graph, how many times did the government raise the minimum wage between 1989 and
1999?
16.
TEACHER
Inner city school seeking special education teacher. $2,000 signing bonus. Teaching certification required.
Experience a plus. Call 555-1338.
Based on skill level, what category of worker does this want ad seek?
17.
Based on the graph, what percentage of the United States population is not in the civilian labor force?
18.
Which years shown on the graph had more than 200 strikes involving 1,000 workers?
19.Rent payments and property taxes would be counted as
total cost.
variable costs.
fixed costs.
marginal costs.
20.
HELP WANTED: Chef
Upscale, 100-seat neighborhood restaurant seeking Executive Chef with 5 years’ experience in kitchen
management and line experience. Position reports to Restaurant Manager. Send resume to: Recruiter, P.O.
Box 30, Canton, Ohio.
Based on skill level, what category of worker is this want ad seeking?
21.The invisible barrier that hinders women and minorities from advancement up the corporate ladder
has been ignored by Congress.
is the comparable worth issue.
is known as the glass ceiling.
has been reinforced by use of set-aside contracts.
22.An entrepreneur knits sweaters for sale. The entrepreneur has fixed costs of $100. When he makes 10 sweaters in one
month, he must spend $15 on wool. To make eleven sweaters in one month, he must spend $17 on wool. If he
has no other costs, what is the marginal cost of the eleventh sweater?
$2
$117
$1
$17
23.What is an example of a variable cost in a major league baseball franchise?
manager’s salary
ticket-takers’ salaries
stadium rent
stadium maintenance
Short Answer
Reading a Chart
Production Costs
Beanbags
(per hour)
Fixed
cost
Variable
cost
Marginal
cost
Total
revenue
Profit
0
1
2
3
4
5
6
7
8
9
10
11
12
$36
36
36
36
36
36
36
36
36
36
36
36
36
$0
8
12
15
20
27
36
48
63
82
106
136
173
—
$8
4
3
5
7
9
12
15
19
24
30
37
$0
24
48
72
96
120
144
168
192
216
240
264
288
$-36
-20
0
21
40
57
72
84
93
98
98
92
79
Figure 5.1
Know how to calculate total revenue and profit for the chart above.
Essay
Production Schedule
Number
of
Workers
Total
Product
Marginal
Product*
0
0
0
1
7
7
2
20
13
3
38
18
4
62
24
5
90
28
6
110
20
7
129
19
8
138
9
9
144
6
10
148
4
11
145
–3
12
135
–10
*All figures in terms of output per day.
Costs
Revenues
Profit
Total
Fixed
Costs
Total
Variable
Costs
Total
Costs
Marginal
Costs
Total
Revenue
Marginal
Revenue
Total
Profit
$50
50
50
50
50
50
50
50
50
50
50
50
50
$0
90
180
270
360
450
540
630
720
810
900
990
1,080
$50
140
230
320
410
500
590
680
770
860
950
1,040
1,130
-$12.86
6.92
5.00
3.75
3.21
4.50
4.74
10.00
15.00
22.50
---
$0
105
300
570
930
1,350
1,650
1,935
2,070
2,160
2,220
2,175
2,025
-$15
15
15
15
15
15
15
15
15
15
15
15
–$50
–35
70
250
520
850
1,060
1,210
1,300
1,300
1,270
1,135
895
There will be two short answer questions on the above chart.
Critical Thinking
33. Identifying Alternatives What is the difference between arbitration and mediation?