When a Union Successfully Raises the Wages of Its Members

question 111

Multiple Choice

When a union successfully raises the wages of its members, it will also

• A) increase total productivity, which will generally increase in proportion to the wage rate.
• B) encourage employers to purchase more of the union labor.
• C) increase the share of income allocated to labor as opposed to capital.
• D) increase the employer's incentive to find substitutes for union labor.

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Definitions:

Units of X

Specific measures or quantities of a given variable or product X.

Price of X

The cost associated with acquiring a unit of good or service X.

Utility Function

An economic model that measures preferences over a set of goods and services.

Budget Constraint

An economic model that represents all the combinations of goods and services a consumer can purchase given their income and the prices of those goods and services.