The Union Representing the Bread Makers at the Hostess Bread

question 379

Multiple Choice

The union representing the bread makers at the Hostess Bread Company went on strike and demanded higher wages than what the firm wanted to pay. I. If the firm is in a competitive labor market the union can only raise wages by decreasing employment.
II) If the firm is a monopsony in the labor market the union can only raise wages by decreasing employment.
III) If the firm is a monopsony in the labor market the union can both raise wages and increase employment.

• A) I only
• B) II only
• C) I and II
• D) I and III

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Definitions:

Proportion

A mathematical relation between parts, quantities, or amounts that expresses how much one is relative to the other.

Equilibrium

A state in which supply and demand are balanced, or a situation in which conflicting forces cancel each other out, resulting in a stable outcome or condition.

Hawk-Dove Game

A model in game theory that explores the conflict between aggressive (hawk) and peaceful (dove) strategies.

Payoff

The return or reward received as a result of an action or decision, particularly in the context of games or economic models.