According to the Segmented Labor Market View, Unions Restrict the Labor

question 64

Multiple Choice

According to the segmented labor market view, unions restrict the labor supply to increase wages. As labor migrates to nonunion markets, nonunion wage rates fall. Which of these actions would reduce the incentive for firms to substitute nonunion workers for union members?

• A) increasing the income tax on all workers
• B) passing discriminatory laws that bar immigrants from certain jobs
• C) increasing the minimum wage in the nonunion markets
• D) providing more education and training for union members

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Definitions:

Explanatory Power

The ability of a statistical model to account for the variability of a given data set, explaining how well the model represents the data observed.

Fama and French

Economist researchers known for their development of a three-factor model to explain stock returns based on market risk, size, and book-to-market value factors.

Firm Size

A measure of a company's size, often determined by its market capitalization, number of employees, or total assets.

Explanatory Power

The ability of a statistical model to account for a variation in a dependent variable through one or more independent variables.