Exhibit 27-8 ​ Refer to Exhibit 27-8. Suppose That Initially There Is No

question 19

Multiple Choice

Exhibit 27-8 ​

Refer to Exhibit 27-8. Suppose that initially there is no collective bargaining and the monoposonist maximizes profit. Then the workers form a union and negotiate a wage of W₃. What will happen to the total wage bill?

• A)It will definitely rise.
• B)It will definitely fall.
• C)It will definitely stay the same.
• D)It may rise, fall, or remain the same.

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Definitions:

Statutory Assignment

The transfer of rights or benefits from one party to another as regulated and permitted by law.

Assignee

The party to whom rights or duties under a contract are transferred by another party (the assignor).

Notice of Assignment

A formal notification that a contract or property has been legally transferred from one party to another.

Novation

The process of replacing an existing obligation with a new one, thereby extinguishing the original contract and starting anew.