LABOR ECONOMICS LOOSE PRINT UPGRADE
20th Edition
ISBN: 9781264115211
Author: BORJAS
Publisher: MCG
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Chapter 10, Problem 12P
To determine
Explain the conclusion based on the various union-negotiated effects.
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What is the principle strategy of an inclusive (industrial) union in order to increase the wages of its members?
Suppose the union’s resistance curve is summarized by the following data. The union’s initial wage demand is $10 per hour. If a strike occurs, the wage demands change as follows:Length of Strike: Hourly Wage Demanded1 month $92 months 83 months 74 months 65 or more months 5Consider the following changes to the union resistance curve and state whether the proposed change makes a strike more likely to occur, and whether, if a strike occurs, it is a longer strike.a. The drop in the wage demand from $10 to $5 per hour occurs within the span of two months, as opposed to five months.b. The union is willing to moderate its wage demands further after the strike has lasted for six months. In particular, the wage demand keeps dropping to $4 in the sixth…
5. Exclusive, or craft, unions - Reducing labor supply
Consider a small town economy with only two sectors: coal mining and logging. Both sectors are perfectly competitive, and workers are equally able
and willing to work as miners (coal industry) and lumberjacks (logging). Only outside companies demand the coal and wood produced in the city, so
changes in the domestic labor market do not affect the product demand curve in either sector.
Suppose a union forms in the logging industry. The union limits its membership to less than the number of workers employed before the union formed
and forces all employers in the industry to hire only union workers.
Show the effect of unionization in the logging sector on the labor market for miners.
Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move the curve and it snaps back to its original
position, just try again and drag it a little farther.
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Labor supply
Labor demand
Labor supply
Labor…
Chapter 10 Solutions
LABOR ECONOMICS LOOSE PRINT UPGRADE
Ch. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQ
Ch. 10 - Prob. 11RQCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Major League Baseball players are not eligible for...Ch. 10 - Prob. 15P
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- True or False? Union wages are similar to those in a perfectly competitive market. The wage is determined by the going rate for the position.arrow_forwardIf there is inelastic demand for your labor, how does that influence individual (or union) "bargaining power"?arrow_forwardConsider a union that bargains over Wages (W) and employment (E). 1. Draw a diagram that illustrates the set of efficient contracts. Be sure your diagram also includes: at least 2 firm isoprofit curves; at least 2 union indifference curves; the labour demand curve 2. Now describe the location of the contract curve relative to the labour demand curve and the isoprofit curves and explain the intuition behind this location on the grapharrow_forward
- QUESTION 19 Refer to the following diagram. Wages in both the union and nonunion sectors are initially $10. The union then negotiates a wage rate of $12. The post-negotiation nonunion wage is not yet known. Union $12 $10 S VMP Labor $10 Nonunion VMP Labor The product-market effect would be modeled by shifting the nonunion supply curve to the right, increasing the measured union wage advantage. nonunion demand curve to the right, reducing the measured union wage advantage. Ⓒ union demand curve to the right, increasing the measured union wage advantage. union supply curve to the right, reducing the pure union wage advantage.arrow_forwardWhich of the following describes the effect of the changes in the manufacturing labor market on the market for service workers, which is not unionized? Check all that apply. The wage of service workers will fall. The supply of service workers will remain unchanged. The demand for service workers will remain unchanged. There will be an increase in employment in the service sector.arrow_forwardNow show the effect of unionization in the coal mining sector on the market for wood. PRICE OF WOOD As a result of the unionization: I Supply Demand QUANTITY OF WOOD The price of coal will increase and the price of wood will decrease The price of coal will decrease and the price of wood will decrease The price of coal will decrease and the price of wood will increase The price of coal will increase and the price of wood will increasearrow_forward
- Are unions and technological improvements complementary? Explain why or why not.arrow_forwardExplain how outsourcing and third-world labor markets enter into the mix when it comes to unionizing and collective bargaining. Explain your responses and support your positions.arrow_forwardWhich of the following statements is most accurate? Unionization almost always results in improvements to workplace productivity The effects of unionization on productivity are mixed; sometimes it results in an increase and sometimes it results in a decrease Unionization generally has no effect on workplace productivity Unionization almost never results in improvements to workplace productivityarrow_forward
- Question no 52 only. Please answer fast. Will upvote immediately if answer if correctarrow_forwardDescribe the economic impact of strikearrow_forwardIf the place of employment is not unionized and there are no provisions in the employment contract concerning termination of employment, which of the following would not be within the rights of the employer and therefore actionable by the employee? An employee is dismissed because he was found stealing goods from his employer, and he was given neither notice nor pay in lieu of notice. An employee is dismissed because there is no more work to do and is given neither notice nor pay in lieu of notice. An employee is dismissed because his employer doesn't like his disposition, and he is given reasonable pay in lieu of notice. An employee is dismissed for incompetence and is given neither notice nor pay in lieu of notice.arrow_forward
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