When unions exist in markets
A) firms must have market power in their output markets.
B) there no longer is a perfectly competitive labor supply.
C) individual workers no longer make labor-leisure trade-off decisions.
D) employers have market power in labor markets.
Answer: B
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Which of the following statements identifies a similarity between optimization in levels and optimization in differences?
A) Both techniques consider only the costs of different alternatives. B) Both techniques consider only the total benefits of different alternatives. C) Both techniques evaluate the total net benefit of different alternatives to arrive at a decision. D) Both techniques require the conversion of all costs and benefits into a common unit of measurement.
Fixed costs are sometimes referred to as _________ costs.
Fill in the blank(s) with the appropriate word(s).
Monopolistically competitive firms prevent the efficient use of resources because in long-run equilibrium,
A. price is greater than marginal cost. B. price equals marginal cost. C. price is less than marginal cost. D. marginal cost is greater than average total cost.
An increase in worker productivity will lead to a
A. Negative demand shock B. Positive demand shock C. Negative supply shock D. Positive supply shock