Wage negotiations in baseball can fit the bilateral monopoly situation when a star player negotiates with an owner. Explain how collective bargaining would be used in wage negotiations and the role of player strikes
Collective bargaining asks the player and the owner to submit a wage. The mediator then seeks a compromise (although in baseball, the mediator simply chooses the player or the owner wage). Strikes give credibility to player demands. If strikes were disallowed, owners would be less likely to agree to mediation.
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Examples of indirect taxes are
A. income taxes levied by some states. B. sales taxes and property taxes. C. poll taxes. D. corporate profits taxes.
The difference between the risk-free rate and the interest rate a particular investor has to pay is called the:
A. credit spread. B. risk premium. C. Both of these are true. D. Neither of these is true.
Draw a graph of the demand, marginal revenue, average total cost, and marginal cost curves.
Suppose that some teachers have decided that economic and financial uncertainty have made the prospect of retiring more risky, and therefore carry a higher cost than not retiring. By using all available information as they act to achieve their goals,
these teachers are exemplifying the economic idea that A) people are rational. B) people respond to economic incentives. C) optimal decisions are made at the margin. D) equity is more important than efficiency.