Suppose That Laws Are Passed Banning Labor Unions and That

question 12

Essay

Suppose that laws are passed banning labor unions and that resulting lower labor costs are passed along to consumers in the form of lower prices. Use the aggregate demand-aggregate supply model to illustrate graphically the impact in the short run and the long run of this favorable supply shock. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction the curves shift; v. the short-run equilibrium values; and vi. the long-run equilibrium values. State in words what happens to prices and output in the short run and the long run.

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Definitions:

Equal Environments

This concept suggests that individuals in the same environment are exposed to the same conditions, minimizing differences due to environmental variables.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.

Radical Feminist

A perspective within feminism that calls for a radical reordering of society to eliminate male supremacy in all social and economic contexts, often focusing on the patriarchy as a system of power.

Fundamental Form

The most basic or essential structure or nature of an entity or concept.