If a Union Limits Its Size to the Number of Employed

question 282

Multiple Choice

If a union limits its size to the number of employed members it had when the union was first formed, over time there will be

• A) an increase in the supply of union labor.
• B) falling wages as demand for workers increases.
• C) rising wages as demand for workers increases and the supply increases proportionally.
• D) rising wages as demand for workers increases but some potential workers are denied a place in the union.

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Definitions:

Erosion Costs

Costs that occur when a new project or investment negatively impacts the revenue or profits of existing projects or investments.

Financing Costs

Expenses incurred by a company or individual in the process of raising capital through debt or equity.

Erosion

In finance, it refers to the gradual decline of an asset's value, or the negative impact one investment can have on the value of an existing investment.

Incremental Cash Flows

The additional cash flow a company generates from undertaking a new project, considering only the revenues and costs directly caused by the project.