5. Exclusive, or craft, unions - Reducing labor supplyConsider a small town economy with only two sectors: coal mining and logging. Both sectors are perfectly competitive, and workers are equally ableand willing to work as miners (coal industry) and lumberjacks (logging). Only outside companies demand the coal and wood produced in the city, sochanges 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 formedand 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 originalposition, just try again and drag it a little farther.(?Labor supplyLabor demandLabor supplyLabor demandQUANTITY OF LABORWAGE Now show the effect of unionization in the logging sector on the market for coal.SupplyDemandSupplyDemandQUANITYAs a result of the unionization:The price of wood will increase and the price of coal will decreaseThe price of wood will decrease and the price of coal will increaseThe price of wood will decrease and the price of coal will decreaseThe price of wood will increase and the price of coal will increasePRICE

Unions restrict the number of labor thereby interfere with the free-market allocation of labor.

As a result of the unionization: The price of wood will increase and the price of coal will decrease The price of wood will decrease and the price of coal will increase The price of wood will decrease and the price of coal will decrease The price of wood will increase and the price of coal will increase

As a result of the unionization: The price of wood will increase and the price of coal will decrease The price of wood will decrease and the price of coal will increase The price of wood will decrease and the price of coal will decrease The price of wood will increase and the price of coal will increase

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Now 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 increase
Explain why monopsony gives rise to union development in labor markets.
Consider two provinces that adopt different laws concerning labour unions. The following graph shows the labour market in a province in the West. Initially, the market-clearing wage is $10 per hour. Suppose that the legislature in this western province passes laws that make it easy for workers to join a union. Through collective bargaining, the union negotiates a wage of $16 per hour. Use the black point (plus symbol) to show how many union workers will be employed at the $16 wage. (Hint: Be sure to place the point on the appropriate curve.) Labour Market in the West 20 18 Union Negotiations 16 14 Supply 12 10 2 Demand ㅇ 4 6 8 10 12 14 18 18 20 LABOUR (Millions of workers) The following graph shows the labour market in a province in Eastern Canada. The legislature in this province passes strong right-to-work laws that make it very difficult for unions to organize workers, so the wage is always equal to the market-clearing value. Except for this difference in legislation, the two…
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Today the strongest segment of unionization is: Militant workers Public sector workers Craft workers Industrial workers