A Union Representative Observed That If the Union Members' Wages

question 202

Multiple Choice

A union representative observed that if the union members' wages were increased by some proportion, the workers would eventually suffer a greater than proportional decline in employment. This statement could best be explained if

• A)the new wages are to take effect immediately.
• B)union labor can easily be replaced with capital.
• C)union labor is an insignificant portion of the total cost of production.
• D)the demand for the final product the workers produce is relatively inelastic.

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Definitions:

Usage of Trade

Established customs and practices commonly observed and accepted in a particular industry or trade.

UCC

The Uniform Commercial Code, which is a comprehensive set of laws governing sales and commercial transactions in the United States, intended to harmonize the law of sales and other commercial transactions across the country.

Suretyship Provision

A contractual arrangement where a third party (surety) agrees to take responsibility for the debtor's obligations if the debtor fails to fulfill them.

Suretyship Provision

A contractual agreement in which a party assumes responsibility for the debt obligation of a borrower if that borrower defaults.