Consider the Two-Sector Model of General Equilibrium

question 20

Multiple Choice

Consider the two-sector model of general equilibrium. In the case of Pareto-efficient bargaining between the firm and the union, which means that the wage-employment outcome lies to the right of the labour demand curve, the effect of the union on employment levels is:

• A) larger than what would be the case if the threat effect was present.
• B) greater than what would otherwise be the case.
• C) less than what would otherwise be the case.
• D) non-existent, as that factor is irrelevant.
• E) the same as would be the case if the wait-unemployment effect was present.

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Definitions:

Anorexia Nervosa

An eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to severe restriction of food intake.

Ideal Body Weight

An estimation of an optimal weight based on height, aiming for a healthful balance to minimize risk of diseases.

Vitamin C Deficiency

A nutritional deficiency that can lead to symptoms such as scurvy, characterized by weakened immunity and connective tissue, and issues with skin and gum health.

Swollen Gums

Inflammation and swelling of the gum tissue, often a sign of gum disease or infection.