According to the Economic Theory of Labor Markets, If Unions

question 2

Multiple Choice

According to the economic theory of labor markets, if unions are successful in raising wages, with no accompanying increase in labor productivity, then which of the following is true ?

• A) The quantity of labor demanded by profit-maximizing firms will decline.
• B) The quantity of labor demanded by profit-maximizing firms will increase.
• C) The quantity of labor supplied by workers will decline.
• D) There will be a shortage of labor in the unionized labor market.

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Definitions:

Cash Sales

Transactions in which goods or services are paid for and received at the time of the sale, using cash or equivalent.

Sales Taxes

Taxes imposed by governments on the sale of goods and services.

Journal Entry

A record in accounting that notes transactions and changes in financial statements.

Net Pay

The amount of money an employee takes home after all deductions, such as taxes and benefits, are taken out of their gross salary.