1. Will a union behave differently if it wants to get all its members employed i

Question

1. Will a union behave differently if it wants to get all its members employed instead of maximizing the total wage bill?

A. Yes, the wage rate the union must bargain for to employ all members will be greater than the wage rate offered to maximize the total wage bill.

B. Yes, the wage rate the union must bargain for to employ all members will be lower than the wage rate offered to maximize the total wage bill.

C. No, the union will behave exactly the same regardless of whether it wants to have more members employed or maximize the total wage bill.

2. What does the elasticity of demand for labor have to do with the wage–employment tradeoff?

A. The more inelastic the demand for labor is, the greater the wage–employment tradeoff.

B. The more inelastic the supply of labor is, the greater the wage–employment tradeoff.

C. The more elastic the supply of labor is, the greater the wage–employment tradeoff.

D. The more elastic the demand for labor is, the greater the wage–employment tradeoff.

3. Generally, labor unions try to affect the elasticity of demand for union labor by (reducing/increasing) the availability of substitute products and factors. Additionally, unions try to (decrease/increase) the demand for union labor by (decreasing/increasing) the demand for the product the union produces. Unions also typically try to (decrease/increase) the supply of union labor through the establishment of (open shops/ union shops/ price ceilings).

4. Which of the following do unions tend to favor?

A. Strict immigration laws

B. Trade restrictions

C. Raising the minimum wage

D. All of the above

5. Most actions or practices of labor unions are attempts to affect which of the following factors? Check all that apply.

A. The availability of capital

B. The rate of inflation

C. The supply of labor

D. Economic growth

.

Explanation / Answer

a) "B"

Yes, the wages will be lower than it will be while maximizing total wage bill.

b) "D"

The more elastic the demand for labor the higher the tradeoff will be.

c) "Reducing the availability of substitute", "increase the demand", "decrease the supply of labor", by union shops.

d) "Unions favor all of the above"

e) "C"

The unions can only affect the supply of labor.

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