1. Along a linear demand curve, elasticity _____ as the quantity of labor rises. A. increases. B. decreases C. changes in an unpredictable manner. D. remains constant.
2. Labor unions will be more successful in receiving wage increases with smaller reductions in employment when: A. the demand for the final product is relatively elastic. B. there are many substitutes for this category of labor. C. the price elasticity of supply for capital and other resources is relatively high. D. labor costs are a relatively small share of total costs.
3. The price elasticity of demand for the final product affects the own-wage elasticity of demand for labor by affecting the magnitude of: A. the substitution effect that occurs in the labor market B. the scale effect that occurs in the labor market. C. both the substitution and scale effects. D. neither the substitution nor the scale effects.