If the Labour Union Acts to Maximize the Economic Rent

question 5

Multiple Choice

If the labour union acts to maximize the economic rent that its members receive, what will happen to employment and wages?

• A) Wage will be lower than in the case of the absence of a labour union.
• B) Employment will be lower than in the case of the absence of a labour union.
• C) We cannot tell what the effect on employment would be, but wages will be higher than they would be in the absence of a union
• D) Employment will be higher than in the case of the absence of a labour union.
• E) We cannot tell what the effect on wages would be, but employment will be higher than it would be in the absence of a union