The United Auto Workers union is largely responsible for the historically high pay of American auto workers by negotiating pay raises above those obtained by workers in other industries. In addition to increasing the pay of auto workers, what other long-run effect would this high pay have on the use of auto workers?
Over the long run, firms will adjust the proportion of labor to capital based on the ratio of MPP to input P. Unless worker productivity increases are at least as great as wage increases, the firm will shift away from labor and toward greater use of capital equipment such as robotics.
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An industry is likely to be an increasing-cost industry when
a. all firms are identical. b. it represents a negligible fraction of the total demand for inputs. c. industry expansion permits the development of supporting subindustries. d. some firms are more efficient than others.
Which supports the economist's claim that buyers don't compete against sellers?
A) Diners would rather have more restaurants to choose among. B) Music buyers prefer having access to internet music stores compared to only the local music shop in town. C) Car buyers prefer several dealerships in the region compared to only one. D) Homebuyers prefer a larger selection of homes to a smaller one. E) All of the above.
The goal of industrial policy should be that
a. industries yielding the largest positive externalities should receive the biggest subsidies. b. any industry that produces negative externalities should be heavily taxed. c. any production process that produces negative externalities should be shut down. d. all industries that produce positive externalities should be equally subsidized.
Suppose you are given the following data on demand for a product. The price elasticity of demand when price decreases from $9 to $7 is:PriceQuantity Demanded$1030940850760670
A. 1.60. B. 0.63. C. 2.27. D. 1.16.