Explain how labor unions may create structural unemployment
What will be an ideal response?
Labor unions, with their collective bargaining power, try to get wages for their members which are above the market clearing wage rate. These higher wages often result in employers hiring fewer workers than they otherwise could afford to hire or would like to hire, and structural unemployment results.
You might also like to view...
Imposing fines on companies that contribute heavily to air and water pollution is an attempt to bring marginal private costs in line with marginal social costs.
Answer the following statement true (T) or false (F)
With respect to international trade, specialization means that
A. each country consumes what it produces. B. labor is exported or imported in much the same way as other products. C. most goods and services that are traded internationally are produced in only 1 or 2 nations. D. labor and other resources in a nation are used to produce the products and services for which they are best suited.