If One Sector of the Economy Becomes Unionized and There

question 31

Multiple Choice

If one sector of the economy becomes unionized and there is a spillover effect then

• A) wages will increase in both sectors.
• B) wages will increase in the unionized sector, but may either increase or decrease in the non-union sector.
• C) wages will stay unchanged in both sectors.
• D) wages will increase in the unionized sector, but decrease in the non-unionized sector.

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Definitions:

Equilibrium Price

Equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded.

Willingness to Pay

The maximum amount an individual is prepared to spend on a good or service.

Pumpkin Market

A theoretical or real market where pumpkins are bought and sold, often used to illustrate principles of supply and demand or seasonal markets.

Consumer Surplus

The gap between what consumers are ready to pay in total and what they end up actually paying.