If a Union Negotiates and Obtains a Wage Rate Above

question 271

Multiple Choice

If a union negotiates and obtains a wage rate above the competitive wage rate,

• A) it must find a way to make workers more productive.
• B) employment in the union sector will increase relative to employment in the nonunion sector.
• C) it must find a way to ration jobs among the excessive number of workers who wish to work in the union sector.
• D) unemployment will increase in the nonunion sector relative to the union sector.

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Definitions:

Government Raise

An increase in government revenue, often achieved through raising taxes or adjusting fiscal policies, to support government spending.

Tax

A compulsory financial charge imposed by a governmental organization in order to fund various public expenditures.

Per Capita Consumption

The average consumption of goods and services per person within a particular population.

Cigarette Tax

A tax imposed by governments on the sale of cigarettes to raise revenue and discourage smoking by increasing the price.