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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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Chapter
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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in the town of Unionville, where all the bus drivers belong to a union.

Chapter 14, Problem 3SCQ, Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in , example  1

a. What would the equilibrium wage and quantity be in this market if no union existed?

b. Assume that the union has enough negotiating power to raise the wage to Chapter 14, Problem 3SCQ, Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in , example  2 per hour higher than it would otherwise be. Is there now excess demand or excess supply of labor?

A

To determine

The equilibrium wage and quantity when there is no union.

Explanation

The equilibrium level of wage and labor quantity would be where the demand for labor is equal to the supply of labor...

B

To determine

Whether there would be excess demand or supply of labor assuming the wage rate rose to $4 per hour.

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