The Demand for Unionized Labor Will Generally Be More Elastic

question 36

Multiple Choice

The demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages when

• A) there are no close substitutes for the unionized workers.
• B) the domestic producers of the good produced by the unionized workers face weak competition from foreign suppliers of the good.
• C) the cost of employing the unionized workers is a large part of the total cost of the product that they produce.
• D) the demand for the product produced by the unionized workers is highly inelastic.

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Definitions:

Economic Forecasts

Predictions about future economic activity, including trends in GDP, inflation, employment, and sales.

Expected Value

The weighted average of all possible outcomes in a probability distribution, where each outcome is weighted by its probability of occurrence.

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Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio.