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?
What will be an ideal response?
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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Under what conditions would a nation be able to currently produce more of both consumer and capital products?
Which of the following is an effective counter argument to the claim that protectionism saves domestic jobs?
A) Protectionism eliminates domestic jobs in export industries. B) Imports create jobs in this country for people selling and servicing imported items. C) The cost of saving domestic jobs through protectionism may be high. D) all of the above
Look at the following data: Employed persons = 110 million; civilian labor force = 135 million persons; civilian noninstitutional population = 190 million. The unemployment rate is __________ percent and the employment rate is __________ percent.
a. 10; 69 b. 8; 57.9 c. 18.5; 57.9 d. 18.5; 81.5 e. 12; 88
A consequence of adverse selection is:
A. buyers make irrational decisions because they lack information. B. sellers gain surplus they would have lost with complete information. C. transactions do not take place that would have been possible if the parties had the same information. D. buyers gain surplus they would have lost with complete information.