Suppose a Study Found That Union Wages Were 10% Higher

question 3

Multiple Choice

Suppose a study found that union wages were 10% higher than nonunion wages.Unions will have actually raised wages by more than 10% when

• A) union workers who lost their jobs found work in the nonunion sector.
• B) consumers shifted their demand to the lower priced nonunion goods.
• C) nonunion employers raised their wages in response to the threat of being unionized.
• D) union workers are more productive workers than nonunion workers.

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Definitions:

Total Revenue

The total receipts from sales of a given quantity of goods or services. It is the total income of a business from its sales activity.

Price

The amount of money required to purchase something or the value that consumers are willing to exchange for a good or service.

Midpoint Method

A technique used in economics to calculate the elasticity of a variable relative to another, minimizing the variability of the measurement regardless of the direction of change.

Price Elasticity

An indicator of the extent to which the demand or supply for a product shifts following a variation in its cost.