Why might a union find that attaining the goal of employing all its members and the goal of maximizing total union wage receipts to be incompatible objectives?
What will be an ideal response?
To ensure that all of its members are employed, a union must be willing to settle for a wage rate sufficiently low to induce employers to hire all those individuals. In contrast, to maximize total union wage receipts, a union must find a way to attain a sufficiently high wage rate (at which the elasticity of the demand for labor equals 1), which typically will not equal the wage rate required to induce employers to hire all union members.
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How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?
What will be an ideal response?
The Keynesian economists do not believe that a cut in the marginal income tax rate will have strong effects on aggregate supply because they
a. do not believe that business investment will respond strongly to changes in the after-tax rate of return to capital. b. do not believe that labor supply will respond strongly to changes in the after-tax real wage. c. do not believe that labor demand will respond strongly to a change in the after-tax real wage. d. believe monetary policy will be too restrictive to allow strong output growth.
Sam has $200 a month to spend on either tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $50. A point on Sam's budget constraint would be:
A. 20 tanning sessions and 8 rounds of golf. B. 10 tanning sessions and 5 rounds of golf. C. 10 tanning sessions and 4 rounds of golf. D. 10 tanning sessions and 2 rounds of golf.
Economists say that voluntary exchange makes both parties better off. What is the explanation that they offer to back up this conclusion?
What will be an ideal response?