Can unionization in an industry adversely affect productivity? Explain your answer
What will be an ideal response?
Unionization of labor in an industry can adversely affect productivity if it prevents an efficient allocation of labor across different tasks. It can also affect productivity aversely if it does not allow reduction in the number of workers or wages when required.
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To derive personal income from national income, you
a. subtract retained earnings, Social Security taxes, and transfer payments, and add in corporate business taxes b. subtract retained earnings, Social Security taxes, corporate business taxes, and add in transfer payments c. subtract retained earnings, corporate business taxes, and transfer payments, and add in Social Security taxes d. subtract corporate business taxes, Social Security taxes and transfer payments, and add in retained earnings e. subtract Social Security taxes, retained earnings, and personal taxes, and add in transfer payments
Which of the following is a problem that arises when regulations force "natural monopolies," like electric utilities, to charge a price that is equal to their marginal cost (MC)?
a. This price will force the firms out of business in the long run. b. The firms have an incentive to pad their fixed costs. c. When price is equal to MC, new firms will enter the industry and drive up the costs of production. d. Both b and c are correct.