What characteristics of both the product market and the labor market enhance the likelihood that a union will be effective?
An inelastic demand in the product market would increase the ability of unions to increase the value of their compensation packages. In this instance, higher prices can be passed on to consumers in the product market. Also, an inelastic demand for the unionized labor strengthens the union's power. The fewer good substitutes for labor, the more power the union will likely have.
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Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day.Number ofCakes Per DayTotal CostPer Day0$1001$1802$2203$3004$4005$5206$660If the market for wedding cakes is perfectly competitive, and wedding cakes sell for $125 each, then Sarah should produce ________ cakes per day.
A. 3 B. 6 C. 5 D. 0
If a restaurant was a natural monopoly, dividing the restaurant equally into two separate restaurants would
A) increase total revenue. B) make marginal revenue less elastic. C) decrease marginal cost. D) raise average total cost.
Why is the short-run demand curve for labor downward sloping?
What will be an ideal response?
If an economy at the equilibrium level of GDP experiences an increase in the amount of investment spending, then inventories will be
A. depleted, causing firms to cut production. B. accumulated, causing firms to cut production. C. depleted, causing firms to increase production. D. accumulated, causing firms to expand production.