Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 27, Problem 3WNG
To determine
Diagrammatically illustrate the effect of labor unions on nonunion wage rates.
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Explain why monopsony gives rise to union development in labor markets.
Contrast the methods used by inclusive unions and exclusive unions to raise union wage rates.
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.
(?
Labor supply
Labor demand
Labor supply
Labor…
Chapter 27 Solutions
Economics (MindTap Course List)
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Similar questions
- Are unions and technological improvements complementary? Explain why or why not.arrow_forwardtrue or false Labor unions are organized primarily to help women who are expecting to go into labor while on the job.arrow_forwardDescribe the two basic strategies of unions in increasing wage rates for their members.arrow_forward
- Does job control unionism promotes workplace justice, or is it simply a form of worker control Which work environments or industries might benefit from job control unionism? Is there still a need for job control unionism today, or has it outlived its usefulness?arrow_forwardDiscuss how unions increase wage rates by pursuing the demand-enhancement model, the craft union model, or the industrial union model.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
- Explain the craft union model, industrial union model, and demand enhancement model. Give examples of each and discuss the success unions have had in achieving their goals.arrow_forwardTrue 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_forwardSuppose 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…arrow_forward
- Which 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_forwardTwo presidents named Roosevelt helped promote the acceptance of unions. What did Theodore Roosevelt do in 1902 to promote unionism? More importantly what did Franklin Roosevelt do in the mid-1930s?arrow_forwardWhich of the following is an example of pork barrel spending? Select the correct answer below: O funding for a city that received extensive damage from a tornado O funding for the military in order to update equipment O funding for a grant that explores alternative energy sources O funding for a bridge requested by the U.S. representative who represents the area where the bridge will be builtarrow_forward
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