When a group of workers forms a union, they introduce an element of
A) pure competition into the labor market.
B) monopoly into the labor market.
C) monopoly into the product market.
D) monopsony into the product market.
Answer: B
You might also like to view...
Which of the following is NOT a problem in the implementation of industrial policies?
A) Choosing the industry to target B) Knowing the optimum amount of resources to provide the targeted industry C) The encouragement of rent seeking by firms in other industries D) The benefits are partly captured by foreign firms. E) All of the above are problems.
Suppose an industry trade group has convinced legislators that a price floor should be used so that producer surplus is maximized in the market for milk. The group argues that such a policy would save the "family farm." Assuming a downward-sloping linear demand curve and a horizontal long-run supply curve, determine the resulting price, output and social welfare from such a policy. Compare this
result to the competitive equilibrium. What will be an ideal response?