The Nonunion Wage Rate May Fall as the Result of a Union

question 23

Multiple Choice

The nonunion wage rate may fall as the result of a union wage increase because of the:

• A)product-market effect
• B)spillover effect
• C)threat effect
• D)compensating wage differential effect

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Definitions:

Gross Margin

The difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage. It shows the percentage of revenue that exceeds the cost of goods sold.

Consolidated Inventory

involves aggregating the inventories of a parent company and its subsidiaries, presenting them as a single inventory balance in the consolidated financial statements.

Outstanding Shares

The total number of shares of a corporation that are currently owned by all its shareholders, including shares held by institutional investors and restricted shares.

Straight-Line Method

A method of calculating depreciation of an asset by evenly distributing its cost over its useful life.