Which of the Following Is a Reason Why the Union

question 18

Multiple Choice

Which of the following is a reason why the union wage gap might underestimate the actual effect unions have on wages?

• A) Unions typically attract the most productive workers to the application pool.
• B) Nonunion firms may pay higher wages in order to prevent its workers from unionizing.
• C) Nonunion jobs will have excess labor available to them because firms will restrict entry into union jobs, and competition for this excess labor competes down the observed nonunion wage.
• D) Unions target high-paying firms.
• E) The union wage gap can be overestimated but never underestimated.

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Definitions:

Long-Term Debt

Borrowings that are due for repayment in more than one year's time, used to finance a company's operations beyond its immediate needs.

Marginal Tax Rates

The rate at which the last dollar of income is taxed, reflecting the percentage of tax applied to your income for each tax bracket in which you qualify.

Interest Income

Earnings generated from the lending of money or from deposit funds in interest-bearing accounts.

Eligible Dividends

Dividends designated by a corporation to be eligible for a lower tax rate on the dividend income received by an individual shareholder.