Which of the Following Correctly Supports the Argument for the Presence

question 7

Multiple Choice

Which of the following correctly supports the argument for the presence of unions in an industry?

• A)Unions counteract the monopsony power of big firms in the labor market.
• B)As a result of negotiations by unions,employment in the industry is higher than it would have been without a union.
• C)Any inefficiency arising from the presence of a union is outweighed by the benefits of unions.
• D)The presence of unions does not lead to a deadweight loss in the labor market.

---

Definitions:

Corporation

A legal entity that is separate and distinct from its owners, providing limited liability to its shareholders.

Suppliers

Suppliers are businesses or individuals that provide products or services to other businesses or consumers, typically as part of a supply chain.

Agency Problem

In corporations, managers are the agents of stockholders and are often able to take advantage of the relationship by diverting corporate resources to their own use. Excessive pay is the primary example. The general situation is described as the agency problem. Costs associated with controlling the agency problem are agency costs.

Ownership

The legal right or title to an asset or property, with the authority to use, sell, or lease it as the owner sees fit.