Which of the Following Is a Reason Why the Union

question 18

Multiple Choice

Which of the following is a reason why the union wage gap might underestimate the actual effect unions have on wages?

• A) Unions typically attract the most productive workers to the application pool.
• B) Nonunion firms may pay higher wages in order to prevent its workers from unionizing.
• C) Nonunion jobs will have excess labor available to them because firms will restrict entry into union jobs, and competition for this excess labor competes down the observed nonunion wage.
• D) Unions target high-paying firms.
• E) The union wage gap can be overestimated but never underestimated.

---

Definitions:

Put Option

A contract in finance that provides the bearer the privilege, but avoids the necessity, to dispense a specific measure of an underlying asset at a particular price during an outlined period.

Options Contract

A contract giving the buyer the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price on or before a certain date.

Forward Contract

A financial derivative that represents a personalized agreement to buy or sell an asset at a specific price on a future date.

Futures

Standardized contracts to buy or sell a specific asset at a predetermined price at a specified future date, used for hedging or speculation.