What is the union relative wage advantage

Assignment Help Econometrics

Reference no: EM13220687

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 MRPL = 12 - L,where L = the number (in thousands) of workers. The supply of labor in each sector is L = W - 2, where W= the wage rate (dollars per hour).

A union organizes in one of the sectors, and it restricts supple 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 L = 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? How many employees will be hired in that sector?

D. What is the union relative wage advantage? What is the true absolute effect?

Reference no: EM13220687

Questions Cloud

What types of strategic plans must wild west make : what types of strategic plans must wild west make? Is the "doing-nothing" viable? If Wild west's mission appears too broad, which business would you trim first?

Explain how you achieved the payouts in the game : Using game theory, map out a prisoner's dilemma game that shows why even though discrimination was prominent, Major League Baseball allowed blacks to play in the MLB. Please explain how you achieved the payouts in the game.

What actions will the firms take and what is the outcome : Two firms dominate the market for surgical sutures and compete aggressively with respect to research and development. The following payoff table depicts the profit implications of their different R&D Strategies.

How much total tax revenue is raised by the tax : Suppose demand for widgets is given by the equation P=20-0.5Q. Originally, the price of the good is $10 per unit. When a tax of $2 per unit is imposed, the price of the good rises to $12 per unit. How much total tax revenue is raised by the tax

What is the union relative wage advantage : A union organizes in one of the sectors, and it restricts supple to that sector by insisting that only those in the union are hired by firms in that sector. When the employees in this sector unionize, the supply of labor in that sector changes to..

Why state funds currently pay half of the costs for city : Enrollment at City University is increasing 3% per year, its cost per credit hour is increasing 8% per year, and states funds are decreasing by 4% per year. State funds currently pay half of the costs for City U., while tuition is required

How different force will come together to create convergence : Now the industry is confronted with government regulations to oversee the merger. Analyze how the different forces will come together to create a convergence between the interests of stockholders and managers indicating the most likely impact to p..

What are preliminary observations about the depression score : A sample of 60 individuals, all in reasonably good health, was selected; 20 individuals were residents of Florida, 20 were residents of New York, and 20 were residents of North Carolina.Each of the individuals sampled was given a standardized test..

Considerable financial and human assets : if you were the Director of Security for an agency with considerable financial and human assets

User Account

All Pages