The union representing the bread makers at the Hostess Bread Company went on strike and demanded higher wages than what the firm wanted to pay
I. If the firm is in a competitive labor market the union can only raise wages by decreasing employment.
II. If the firm is a monopsony in the labor market the union can only raise wages by decreasing employment.
III. If the firm is a monopsony in the labor market the union can both raise wages and increase employment.
A) I only
B) II only
C) I and II
D) I and III
D
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Refer to the above figure. A movement from B to D would be a result of
A) an increase in the quantity of money in circulation. B) an increase in the marginal income tax rate. C) an increase in labor productivity. D) an increase in government expenditures.
The "tragedy of the commons" refers to the phenomenon where
A) there is rivalry in consumption. B) people overuse a common resource. C) people do not internalize an externality. D) individuals are free riders.
Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely
A) decrease interest rates. B) not change interest rates. C) decrease the inflation rate. D) increase interest rates.
According to the new classical view, changes in aggregate demand
a. can temporarily influence output b. affect only the aggregate price level. c. can influence output but at the cost of higher inflation. d. are primarily driven by changes in investment. e. Both a and c