Why Might Unions Have a Negative Effect on Firm Productivity

question 25

Multiple Choice

Why might unions have a negative effect on firm productivity?

• A) Collective voice increases the number of employee complaints.
• B) Formal grievance procedures are used to discuss workplace conflict.
• C) The industry may have a history of union-management conflict.
• D) Unions increase participative decision making.

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Definitions:

Essential Goods

Products that are necessary for basic living and well-being, often unchanged by changes in income.

Nonessential Goods

Products and services considered as non-critical for survival or basic living standards.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to replace more expensive items with cheaper ones.

Relative Price

Relative Price is the price of one good or service compared to another, usually reflecting its value in terms of another item rather than its absolute price in currency.