When a Union Successfully Raises the Wages of Its Members

question 111

Multiple Choice

When a union successfully raises the wages of its members, it will also

• A) increase total productivity, which will generally increase in proportion to the wage rate.
• B) encourage employers to purchase more of the union labor.
• C) increase the share of income allocated to labor as opposed to capital.
• D) increase the employer's incentive to find substitutes for union labor.

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Definitions:

Cost Of Equity

The return that a company must offer investors to compensate for the risk of investing in its shares.