If an industrial union is able to negotiate a wage above the market-clearing wage, the non-union wage in other industries will

Question

Quizplus · Accepted Answer

If an industrial union is able to negotiate a wage above the market-clearing wage, it means that the wage rate is above the equilibrium level. This will lead to a surplus of labor, meaning more people are willing to work at that wage rate than there are job openings available. This surplus of labor will push down the non-union wage in other industries, as the excess supply of workers will increase competition for jobs and lower wages. Therefore, the non-union wage in other industries will decrease. Choice C and D are incorrect because the ability of the union to restrict or increase the supply of labor does not affect the outcome in this scenario. Choice E is incorrect because strike-breaking activity is not mentioned and does not directly impact the non-union wage in other industries.

If an Industrial Union Is Able to Negotiate a Wage