Scenario: Two neighboring countries, Sweetland and Sourland, are identical in terms of size, population (800,000), education of workforce, and value of natural resources owned.
-Refer to the scenario above.Workers in Sweetland are highly unionized.Among other factors,this makes it more difficult for firms in Sweetland to hire and fire workers than it is for firms in Sourland.It is likely that ________.
A) Sweetland's aggregate production function lies above Sourland's aggregate production function
B) Sweetland's output is more dependent on total efficiency units of labor
C) Sweetland's labor force produces less efficiently
D) Sweetland's productivity is higher

Question

Quizplus · Accepted Answer

High unionization can lead to more rigid labor markets, making it harder for firms to adjust their workforce according to business needs. This can lead to less efficient production processes compared to a more flexible labor market.

Scenario: Two Neighboring Countries, Sweetland and Sourland, Are Identical in Terms