What Is the Effect of Unions on Wages and Employment

question 100

Multiple Choice

What is the effect of unions on wages and employment?

• A) Unions are unlikely to affect wages and employment.
• B) Unions raise wages above the competitive equilibrium level.
• C) Unions increase the level of employment in unionized firms.
• D) Unions decrease the level of employment in nonunionized firms.

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Definitions:

Unattainable Point

A situation or position in economic models that cannot be reached given the current resources and technology.

Trading

The act of buying, selling, or exchanging goods, services, or financial assets in a market.

Inward Shift

A movement towards the origin of a supply or demand curve, indicating a decrease in supply or demand.

Production Possibility Frontier

The production possibility frontier (PPF) is a curve showing the maximum attainable combinations of two products that can be produced with available resources and technology.