Suppose That Bartenders and Waiters Have No Unions

question 8

Multiple Choice

Suppose that bartenders and waiters have no unions.Now suppose that bartenders form a union.What does this do the labor supply and wages of waiters?

• A)Both labor supply and wages increase.
• B)Labor supply increases,and wages decrease.
• C)Labor supply decreases,and wages increase.
• D)Both labor supply and wages decrease.

---

Definitions:

Unitary Elasticity

A situation where a one percent change in the price of a product results in a one percent change in the quantity demanded.

Federal Excise Tax

A tax imposed by the federal government on the sale of specific goods and services, such as gasoline, cigarettes, and alcohol.

Tax Revenue

Income that the government receives from taxation of individuals and businesses.

Excise Tax

A tax levied on specific goods, services, or activities, such as tobacco, alcohol, and gasoline, usually to discourage use or generate revenue.