Consider a Wage-Setting Union in an Otherwise Competitive Labour Market

question 17

Multiple Choice

Consider a wage-setting union in an otherwise competitive labour market.If the union sets a wage above the competitive level,the effect will be

• A)to raise wages for all workers who wish to work in the industry.
• B)to increase the amount of employment in the industry.
• C)to create a group of workers who would like to obtain jobs in the industry but cannot do so.
• D)a level of employment which is the same as that at the competitive equilibrium wage.
• E)to cause the labour supply curve to shift to the right.