Consider two hypothetical states that operate under different laws governing labor unions. The following graph shows the labor market in a state in the West. Initially, the market-clearing wage in this state is $8.00 per hour. Now, suppose that the General Assembly in this western state passes a law that makes it easier for workers to join a union. Through collective bargaining, the union negotiates an hourly wage of $10.00. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. DOW Supply Demand 0 200 400 GOD 800 1000 1200 1400 1000 LABOR (Thousands of workers) Graph Input Tool Enter $10.00 into the box labeled Wage on the previous graph. Hint: Be sure to pay attention to the units used on the graph. At the union wage, union workers will be employed. WAGE Market for Labor Wage (Dollars per hour) Labor Demanded (Thousands of workers) Adjust the graph to show what happens to employment and wages in the eastern state The original workers in the eastern state All workers in the western state Supply X Demand LABOR The following graph shows the labor market in a state in the East. Suppose the legislature in this state 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. Assume that with the exception of this difference in legislation, the western and eastern states are extremely similar. The initial position of the graph corresponds to the initial labor market condition in the eastern state before the labor union negotiated the new, higher wage for workers in the western state. Suppose that after the wage goes up in the western state, some workers in the western state lose their jobs and decide to move to the eastern state. Employers in the western state Workers in the western state employed at the union wage 2.00 Demand 1,400 Supply Labor Supplied (Thousands of worker) Which of the following groups are better off as a result of the union action in the western state? Check all that apply. 200
Consider two hypothetical states that operate under different laws governing labor unions. The following graph shows the labor market in a state in the West. Initially, the market-clearing wage in this state is $8.00 per hour. Now, suppose that the General Assembly in this western state passes a law that makes it easier for workers to join a union. Through collective bargaining, the union negotiates an hourly wage of $10.00. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. DOW Supply Demand 0 200 400 GOD 800 1000 1200 1400 1000 LABOR (Thousands of workers) Graph Input Tool Enter $10.00 into the box labeled Wage on the previous graph. Hint: Be sure to pay attention to the units used on the graph. At the union wage, union workers will be employed. WAGE Market for Labor Wage (Dollars per hour) Labor Demanded (Thousands of workers) Adjust the graph to show what happens to employment and wages in the eastern state The original workers in the eastern state All workers in the western state Supply X Demand LABOR The following graph shows the labor market in a state in the East. Suppose the legislature in this state 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. Assume that with the exception of this difference in legislation, the western and eastern states are extremely similar. The initial position of the graph corresponds to the initial labor market condition in the eastern state before the labor union negotiated the new, higher wage for workers in the western state. Suppose that after the wage goes up in the western state, some workers in the western state lose their jobs and decide to move to the eastern state. Employers in the western state Workers in the western state employed at the union wage 2.00 Demand 1,400 Supply Labor Supplied (Thousands of worker) Which of the following groups are better off as a result of the union action in the western state? Check all that apply. 200
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider two hypothetical states that operate under different laws governing labor unions.
The following graph shows the labor market in a state in the West. Initially, the market-clearing wage in this state is $8.00 per hour.
Now, suppose that the General Assembly in this western state passes a law that makes it easier for workers to join a union. Through collective
bargaining, the union negotiates an hourly wage of $10.00.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
DOW
Supply
Demand
0 200 400 GOD 800 1000 1200 1400 1000
LABOR (Thousands of workers)
Graph Input Tool
Enter $10.00 into the box labeled Wage on the previous graph.
Hint: Be sure to pay attention to the units used on the graph.
At the union wage,
union workers will be employed.
WAGE
Market for Labor
Wage
(Dollars per hour)
Labor Demanded
(Thousands of
workers)
Adjust the graph to show what happens to employment and wages in the eastern state
The original workers in the eastern state
All workers in the western state
Supply
X
Demand
LABOR
The following graph shows the labor market in a state in the East. Suppose the legislature in this state 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. Assume that with the exception of this
difference in legislation, the western and eastern states are extremely similar.
The initial position of the graph corresponds to the initial labor market condition in the eastern state before the labor union negotiated the new, higher
wage for workers in the western state.
Suppose that after the wage goes up in the western state, some workers in the western state lose their jobs and decide to move to the eastern state.
Employers in the western state
Workers in the western state employed at the union wage
2.00
Demand
1,400
Supply
Labor Supplied
(Thousands of
worker)
Which of the following groups are better off as a result of the union action in the western state? Check all that apply.
200
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