Refer to the Following Diagram

question 5

Multiple Choice

refer to the following diagram. Wages in both the union and nonunion sectors are initially $10. The union then negotiates a wage rate of $12. The post-negotiation nonunion wage is not yet known.
-The spillover effect would be modeled by:

• A)shifting the nonunion supply curve to the right,increasing the measured union wage advantage
• B)shifting the nonunion demand curve to the right,reducing the measured union wage advantage
• C)shifting the union demand curve to the right,increasing the measured union wage advantage
• D)raising the nonunion wage above its equilibrium level,reducing the true union wage advantage

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