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Consider an economy with two labor markets, one for manufacturing workers and one for service workers. Suppose that initially, none is unionized.
a) if manufacturing workers formed a union, what impact would it have on the wages and employment in manufacturing.
b. How would these changes in the manufacturing labor market affect labor supply in the market for service workers. What would happen to the equilibrium wage rate?
 

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manhokwe tawanda
manhokwe tawandaLv10
22 Oct 2020

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Related questions

tructural unemployment is sometimes said to result from a mismatch between the job skills that employers want and the job skills that workers have. To explore this idea, consider an economy with two industries: auto manufacturing and aircraft manufacturing.

1. If workers in these two industries require similar amounts of training, and if workers at the beginning of their careers could choose which industry to train for, what would you expect to happen to the wages in these two industries?

2. Suppose that one day the economy opens itself to international trade and, as a result, starts importing autos and exporting aircraft. What would happen to demand for labor in these two industries?

Demand for labor
Country begins importing autos
Country begins to export aircraft

3. Suppose that workers in one industry cannot be quickly retrained for the other. How would these shifts in demand affect equilibrium wages in the short run?

Wages in the auto industry
Wages in the aircraft industry

4. If for some reason wages fail to adjust to the new equilibrium levels, what would occur?

The labor market for auto workers
The labor market for aircraft workers

1. The percentage of the labor force that belongs to a union is known as the:

a) Union share ratio.

b) Unionization ratio.

c) Union participation ratio.

d) Unionized percentage ratio.

2. The equilibrium wage rate is determined by:

a) Individuals but not firms.

b) Market labor supply and market labor demand.

c) Labor unions.

d) Firms but not individuals.

3. The effect of union exclusion of non-union workers is to:

a) Increase the shortages of non-union workers.

b) Reduce the wages of non-union workers.

c) Increase the number of jobs for non-union workers.

d) Increase the surplus of union workers.

4. A market with one buyer and one seller is a:

a) Bilateral monopsony.

b) Multiopoly.

c) Bilateral monopoly.

d) Multilayer monopoly.

There are two sectors of the construction industry that currently pay their employees the market-clearing wage. The demand for labor in each sector is w = 18 – Ed, where Ed = the number (in thousands) of workers. The supply of labor in each sector is Es = w – 2, where w = the wage rate (dollars per hour). A union organizes in one of the sectors, and it restricts supply to that sector by insisting that only those in the union are hired by firms in that sector (and it is difficult to get into the union). When the employees in this sector unionize, the supply of labor in that sector changes to Es = w – 4.

a) What is the wage rate in both sectors before unionization? How many employees will be hired in each sector?

b) What is the wage rate in the unionized sector? How many employees will be hired in the unionized sector?

c) If the unemployed workers in the newly unionized sector spill over into the nonunion sector, what will be the wage rate in the nonunion sector? How many employees will be hired in that sector?

d) What is the union relative wage advantage (union-wage/nonunion wage)? What is the true absolute effect (union-wage/equilibrium wage in the absence of a union)?

e) Suppose the employees in the non-unionized sector want a union to represent them as well. In an attempt to discourage a union from forming in this sector, the employers in that sector offer a wage rate of $10.50. How many nonunion workers will be hired? What is the union relative wage advantage?

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