Consider a Nation in Which Most Workers Are Unionized

question 353

Multiple Choice

Consider a nation in which most workers are unionized. If all the nation's unions band together and succeed in boosting wages established by long-term labor contracts, then

• A) there is a leftward shift in just LRAS.
• B) there is a leftward shift in both LRAS and SRAS.
• C) there is a rightward shift in just SRAS.
• D) there is a rightward movement along the SRAS curve.

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Definitions:

Profit-maximizing Price

The selling price per unit that maximizes a firm’s profits, based on its cost structure and market demand.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a certain period.

Cost Data

Information or figures related to the expenses incurred in producing goods or services, including both fixed and variable costs.

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, leading to competition among them.