4.1.6.5 The influence of trade unions in determining wages and levels of employment Quiz: AQA Economics, Unit 1

The 20 questions

1. By what primary mechanism do trade unions negotiate higher wage rates for their members?

   • Collective bargaining
   • Monopsony pricing
   • Market deregulation
   • Price discrimination

2. Which elasticity of demand for labour gives a trade union the greatest power to raise wages?

   • Unitary demand
   • Inelastic demand
   • Perfectly elastic demand
   • Elastic demand

3. What happens to employment when a trade union raises wages in a competitive labour market?

   • It remains unchanged
   • It fluctuates wildly
   • It rises
   • It falls

4. What can a trade union achieve when introduced into a monopsony labour market?

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

5. What market condition occurs when a union sets wages above competitive market equilibrium?

   • Excess supply
   • Market clearance
   • Productive efficiency
   • Excess demand

6. Which factor primarily determines a trade union's ability to raise wages without causing job losses?

   • Inelastic labour demand
   • Elastic labour demand
   • Elastic product supply
   • Inelastic labour supply

7. How does highly elastic demand for labour affect a trade union's bargaining power?

   • It weakens power
   • It strengthens power
   • It has no effect
   • It eliminates competition

8. How might firms respond in the long run to trade union wage increases?

   • Substitute labour
   • Increase manual tasks
   • Substitute capital
   • Reduce output prices

9. How would you describe a union's wage bargaining power when labour has few substitutes?

   • Negligible
   • Non-existent
   • Strong
   • Weak

10. Which factor significantly strengthens a trade union's bargaining power in an industry?

    • Low union density
    • High worker turnover
    • Elastic product demand
    • High union density

11. What effect can a trade union have on a monopsony labour market?

    • Decrease wages, increase employment
    • Increase wages and employment
    • Decrease wages and employment
    • Increase wages, decrease employment

12. What is a major potential disadvantage of trade unions raising wages in competitive markets?

    • Lower capital substitution
    • Increased unemployment
    • Increased worker productivity
    • Reduced wage differentials

13. What happens to wages in a competitive labour market when a union bargains successfully?

    • Fall below equilibrium
    • Rise above equilibrium
    • Match monopsony wages
    • Stay at equilibrium

14. How does a significant drop in trade union membership affect its bargaining power?

    • It increases strike efficiency
    • It weakens power
    • It strengthens power
    • It stabilises wages

15. Why does high unemployment in an industry reduce a trade union's bargaining power?

    • High union density
    • Inelastic labour supply
    • Increased worker productivity
    • Easy worker substitution

16. What is the outcome on wages and employment when a union enters a competitive market?

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

17. What term describes the collective withholding of labour by workers during trade disputes?

    • Arbitration
    • Monopsony power
    • Collective bargaining
    • Industrial action

18. In a monopsony labour market, if a trade union secures the competitive wage, employment will:

    • Remain unchanged
    • Drop to zero
    • Fall
    • Rise

19. What difficulty arises when measuring the impact of trade unions on wage rates?

    • Universal union membership
    • Confounding variables
    • Constant labour supply
    • Fixed productivity rates

20. Which factor acts as a direct constraint on trade union bargaining power?

    • Inelastic labour demand
    • Monopsony employers
    • High union density
    • Foreign competition

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