How does competition from nonunion firms and foreign producers affect the ability of a union to increase the wages of its members?
a. Such competition makes it easier for the union to achieve wage increases.
b. Such competition reduces the ability of a union to achieve wage increases.
c. Such competition does not affect the ability of a union to achieve wage increases.
d. Such competition will increase the strength of a union if it produces a product sold in the domestic market but will reduce the strength of the union if it produces an export product.
B
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The above figure shows a housing market with a rent ceiling equal to $1,000. In this figure, what area is equal to the deadweight loss?
A) area A B) area B C) area C D) area D E) area E
A reason a nation faces diminishing returns along a production function is because
A) unemployment always exists. B) potential GDP is fixed. C) the quantity of physical capital is fixed. D) full employment is not possible. E) the wage rate is fixed while moving along the production function.