If a Union Seeks to Maximize the Total Wage Bill

question 118

Multiple Choice

If a union seeks to maximize the total wage bill received by its members, then it

• A)should seek to establish the highest possible wage rate.
• B)should seek to establish the lowest possible wage rate.
• C)will find that this cannot be done under any circumstances.
• D)none of the above

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Definitions:

Lowest Price

the minimum price at which a product or service is offered in the market.

Producer Surplus

The difference between the amount that producers are willing to accept for a good or service and the actual amount they receive, due to higher market prices.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that producers are willing to supply.

Efficiency

The ability to produce maximum output with a given set of inputs or resources, minimizing waste and costs.