1. Why are individual supply curves of labor potentially backward-bending, but market and industry supply curves are always positively sloped?

2. What factors will increase the demand for labor?

3. When there is discrimination in the labor market, who loses? Why? Why is it harder to discriminate when both labor and product markets are competitive?

4. What are the important laws in place in the United States to prevent discrimination in the workplace based on race or gender?

5. How do unions exert their influence in the labor market?

6. What are some changes in the types of jobs available in the United States over the past 50 years and what are some trends for future labor employment?

7. Prior to health care reform that made it illegal for insurance companies to deny health insurance to those with preexisting conditions such as heart problems, some employees felt locked into their jobs because their employer-provided health insurance was not transferable to other companies. This “job lock” phenomenon was especially severe when someone in a family had a preexisting condition that would otherwise prevent him or her from obtaining private health insurance at reasonable rates. What were the effects of this type of inflexibility on labor markets? What has the impact been given the health care reforms that eliminate the potential loss of insurance?

8. Why do college professors who usually spend five to seven years in graduate school and play such an important role in shaping our society make so much less than a Hollywood producer such as Jerry Bruckheimer, who is unknown to most people (he has produced over 45 films and a dozen TV shows)?

9. Why do we permit price discrimination with different ticket prices at movies based on age, or ladies’ nights at bars (when women get in free or pay less for drinks), or insurance coverage, for which women sometimes pay more (health) or less (automobile), but we do not permit discrimination in wage rates?

10. Has globalization made it more difficult for unions to negotiate higher wages? Why or why not?

11. The airline pilots union has been very successful in negotiating six-figure salaries for pilots. The unions representing flight attendants have not been nearly as successful. What probably accounts for the difference?

12. Reality television has altered the labor market for entertainment over the past two decades. No longer does an aspiring actor or actress need to find an agent and wait years for an opportunity to audition for a specific role. Today, aspiring “TV stars” can freely audition (often by submitting a self-produced video online) at one of many auditions for reality shows such as Big Brother, The Voice, and America’s Got Talent. From the reality show’s perspective, producers are constantly looking to cast new people each season. Using the tools of labor supply and demand, explain how reality television has changed the labor market for entertainers.

13. The rise of terrorist attacks around the world has intensified the debate on immigration, with some legislators eager to pass laws making it harder for foreign citizens to work or study in this country. Many of these would-be immigrants are high-skilled workers who have studied math, science, and technology, subjects that contribute significantly to economic growth and higher wages for all citizens. Using the tools of labor supply and demand, evaluate the effects of a tighter immigration policy on the labor market and on the overall economy.

14. A commonly cited statistic from the U.S. Bureau of Labor Statistics is that women earn between 77% and 82% of what men earn for full-time work, which subsequently leads some to conclude that gender discrimination is the cause of this wage gap. However, most economists acknowledge that not all of this wage gap can be attributed to gender discrimination. Some studies have estimated that over half of the wage gap is explained by occupational choices, experience levels, and the amount of leave time taken. Briefly discuss how these three factors might cause women to earn less than men.

15. Rocco’s Studio offers lessons in Latin dance styles for $50 per session. Currently, Rocco has three dance instructors who were able to teach a total of 40 classes last week. This week, he hired a fourth dance instructor specializing in samba, and the four instructors together gave a total of 52 sessions. What is the marginal revenue product of the fourth dance instructor?

16. In the following table, suppose the price of output is $10 per unit. What are the marginal physical product and the marginal revenue product of the sixth worker? If the wage of each worker is $150, should the sixth worker be hired?

17. According to By the Numbers, during which eight-year period did the percentage of Americans with flexible work schedules increase the most?

18. According to By the Numbers, between which five-year period did union membership increase the most as a percentage of the labor force? Between which five-year period did union membership decrease the most?