(a) Explanation The union increases the wage rate mainly through increase in the demand for labor, bargaining power, and through the supply restrictions. Market conditions affect the decision on increase in wages. When the demand for product increases, the demand for labor also increases. In this situation, the firm will negotiate for higher wage rate. The union tries to increase the demand for union-made goods through campaigns and political powers... (b) To determine Reason for the failure of raising wage rate by the union.

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN: 9781305506893

Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher: Cengage Learning

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Question

Chapter ST9, Problem 2CQ

(a)

To determine

Condition, which help the union to increase wages.

(b)

To determine

Reason for the failure of raising wage rate by the union.

Expert Solution & Answer

Chapter ST9 Solutions

Microeconomics: Private and Public Choice (MindTap Course List)

Ch. ST9 - Prob. 1CQ Ch. ST9 - Prob. 2CQ Ch. ST9 - Prob. 3CQ Ch. ST9 - Prob. 4CQ Ch. ST9 - Prob. 5CQ Ch. ST9 - Prob. 6CQ Ch. ST9 - Prob. 7CQ

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Similar questions

Are unions and technological improvements complementary? Why or why not?
D0 countries with a higher percentage of unionized workers usually have less growth in productivity because of strikes and other disruptions caused by the unions? Why or why not?

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