Suppose a Union Successfully Negotiates a Wage Rate for Its

question 162

Multiple Choice

Suppose a union successfully negotiates a wage rate for its members that is above the competitive wage rate, then

• A) there will be downward pressure on the wage rate until equilibrium is established.
• B) right-to-work laws become effective.
• C) there is a shortage of jobs.
• D) there is excess demand for labor.

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Definitions:

Long Run

A period in which all factors of production and costs are variable, allowing for full adjustment to change.

Supply Curves

Graphical representations illustrating the relationship between the price of a good and the quantity of the good that producers are willing to supply.

Immediate Market Period

The shortest time frame in economic analysis, where the supply of goods is completely inelastic, meaning quantity cannot be changed in response to price changes.

Short Run

A period where at least one factor of production is fixed, typically seen in economics as a timeframe where businesses cannot adjust all inputs.