A union can be viewed as a monopoly seller of a service. What are the three wage and employment strategies the union might use?
What will be an ideal response?
The union might try to employ all members, but the only way it can do this is to accept the market clearing wage. The market would do this without the union, so the union will probably not pursue this strategy. It can maximize members' income. This is found by finding the marginal revenue curve that goes with the demand curve for labor and finding the wage when marginal revenue would be zero. Finally, it can maximize wages for certain workers, which would mean more of the members go without jobs.
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A $50 billion increase in both government spending and taxes will
A) increase GDP by less than $50 billion. B) not change the level of GDP. C) increase GDP by $50 billion. D) increase GDP by more than $50 billion.
Which of the following is NOT a form of outsourcing?
A) hiring an accountant to do your taxes B) replacing the windshield wipers on your car C) paying your son to mow the lawn D) taking a taxi to the airport