Question 1

FIGURE 14-6
-The fundamental dilemma facing labour unions is

Accepted Answer

The answer of  FIGURE 14-6
-The fundamental dilemma facing labour...

Question 2

The table below shows the labour demand and labour supply schedules in a competitive labour market.  TABLE 14-1
-In general, in collective bargaining between a labour union and a firm, the

Accepted Answer

In collective bargaining, the wage is negotiated between the union and the firm, but the firm is generally free to choose the level of employment based on the labour demand and supply schedules. Therefore, choice C is the most accurate statement.

Question 3

The three diagrams below show the supply and demand for teenage babysitters in one local area. The initial supply curve is S 0 in all cases.
  FIGURE 14-3
-Refer to Figure 14-3. Suppose the teenage babysitters in one local area are earning an equilibrium wage of $6 per hour. Now suppose that the local government imposes a minimum wage of $8 per hour for babysitters. Which diagram illustrates the new supply curve SA) for babysitters?

Accepted Answer

The new minimum wage of $8 per hour means that babysitters will not be willing to work for less than $8 per hour. This means that the supply curve will shift to the left, as shown in diagram 1.

Question 4

FIGURE 14-6
-If a union succeeds in shifting the labour supply curve to the left, it can achieve wages above the

Accepted Answer

If a union succeeds in shifting the labour supply curve to the left, it can achieve wages above the competitive level, but it will reduce the level of employment. This is because at the higher wage, there will be less demand for labour, leading to a decrease in the quantity of labour demanded.

Question 5

One of the most unionized industries in Canada is

Accepted Answer

Education is one of the most unionized industries in Canada, with an estimated unionization rate of over 70%. This is due to the large number of public sector jobs in education, including teachers, support staff, and administrators. These jobs are often unionized to negotiate fair wages, working conditions, and benefits for their members. Other industries listed, such as agriculture and real estate, have much lower rates of unionization.

Question 6

FIGURE 14-6
-Economists observe clear evidence of a union wage premium but do not observe the clear union effect on employment levels predicted from theory. One explanation for this is

Accepted Answer

The answer of  FIGURE 14-6
-Economists observe clear evidence of...

Question 7

FIGURE 14-6
-Unions currently represent employed workers in Canada.

Accepted Answer

According to Figure 14-6, unions represent approximately 30% of employed workers in Canada.

Question 8

An important unanswered question about the role of unions in developed economies is whether the presence of unions affects long-run productivity. There is some evidence to suggest that the presence of a union

Accepted Answer

The answer of An important unanswered question about the role...

Question 9

The union wage premium refers to the

Accepted Answer

The union wage premium refers to the higher wage that is attributable only to the union status of the job, meaning that unionized workers earn more than non-unionized workers in the same industry and occupation. It is not attributable to fees paid to the union (option A), or a trade-off between wage and union size (option B). It is also not set unilaterally by the union, but rather negotiated through collective bargaining with the employer (option D) and therefore not set unilaterally by the employer (option E).

Question 10

The average union wage premium in Canada is

Accepted Answer

The answer of The average union wage premium in Canada...

Question 11

Unions currently represent government employees in Canada.

Accepted Answer

According to Statistics Canada, in 2020, over 70% of government employees in Canada were represented by unions.

Question 12

Canadian studies on the effects of minimum-wage laws

Accepted Answer

Canadian studies on the effects of minimum-wage laws find that they decrease the level of employment, particularly for low-skilled workers.

Question 13

Which of the following statements about minimum-wage laws is most accurate?

Accepted Answer

While minimum-wage laws vary by province in Canada, there is evidence that they can cause additional unemployment, particularly among youths. The idea that minimum-wage laws only affect higher-skilled, lowest-wage workers is not accurate, and the statement that minimum-wage laws are unfair is a matter of opinion. Additionally, there is not strong evidence to support the claim that minimum-wage laws create a lot of jobs.

Question 14

The three diagrams below show the supply and demand for teenage babysitters in one local area. The initial supply curve is S 0 in all cases.
  FIGURE 14-3
-Refer to Figure 14-3. Suppose the teenage babysitters in one local area are earning an equilibrium wage of $6 per hour. Now suppose the local government reduces the minimum age for working as a babysitter from 14 to 12 years of age. Which diagram illustrates the new supply curve SA) for babysitters?

Accepted Answer

The answer of The three diagrams below show the supply...

Question 15

FIGURE 14-6
-Refer to Figure 14-6. The market begins in equilibrium with the curves labelled Demand and Supply. If a labour union negotiates the wage to W2, the difference between this wage and the competitive equilibrium wage is called

Accepted Answer

The difference between the negotiated wage (W2) and the competitive equilibrium wage (W1) is called the union wage premium. This is because it represents the additional wage paid to unionized workers compared to non-unionized workers in the same industry.

Question 16

FIGURE 14-6
-If a wage-setting union enters a monopsonistic labour market, the union can cause

Accepted Answer

The answer of  FIGURE 14-6
-If a wage-setting union enters...

Question 17

The table below shows the labour demand and labour supply schedules in a competitive labour market.  TABLE 14-1
-Refer to Table 14-1. In a competitive labour market, a legislated minimum wage imposed at $14 per hour would

Accepted Answer

The answer of The table below shows the labour demand...

Question 18

The purpose of a labour union is to

Accepted Answer

The purpose of a labour union is to exploit its labour-market power in the same way a monopolist exploits its market power in product markets. This means that the union aims to negotiate higher wages and better working conditions for its members by limiting the supply of labour and increasing the bargaining power of workers. This can result in higher prices for goods and services produced by unionized firms, similar to how a monopolist can set higher prices due to its market power.

Question 19

The table below shows the labour demand and labour supply schedules in a competitive labour market.  TABLE 14-1
-Refer to Table 14-1. In a competitive labour market, a legislated minimum wage imposed at $10 per hour would

Accepted Answer

The answer of The table below shows the labour demand...

Question 20

FIGURE 14-6
-Refer to Figure 14-6. The market begins in equilibrium with the curves labelled Demand and Supply. If a labour union negotiates the wage to W2 in an otherwise competitive labour market,

Accepted Answer

When the labour union negotiates the wage to W2, it means that the wage has increased from W1 to W2. As a result, some workers who were previously unwilling to work at W1 may now be willing to work at W2, resulting in an increase in the supply of labour. However, some workers who were willing to work at W1 may choose not to work now, resulting in a decrease in the supply of labour. Overall, the net effect on the supply of labour is likely to be small, so we can assume that the supply of labour will stay the same.
On the other hand, when the wage increases from W1 to W2, employers will find it more expensive to hire workers, and hence demand for labour will decrease. This means that the demand curve for labour will shift to the left, from the original curve labelled ‘Demand’ to the new curve labelled ‘D2’ in the figure. Since the demand for labour has decreased, employers will hire less labour, hence the quantity of labour hired will decrease from L1 to L2. Therefore, the correct answer is D, which states that employers will hire L1 quantity of labour. The other choices are incorrect because they either suggest that nothing changes (A), or the quantity of labour hired increases (B and E), which is incorrect given the decrease in demand for labour.

Quiz 14: Labour Markets and Income Inequality

FIGURE 14-6 -The fundamental dilemma facing labour unions is

The table below shows the labour demand and labour supply schedules in a competitive labour market. TABLE 14-1 -In general, in collective bargaining between a labour union and a firm, the

FIGURE 14-6 -If a union succeeds in shifting the labour supply curve to the left, it can achieve wages above the

One of the most unionized industries in Canada is

FIGURE 14-6 -Economists observe clear evidence of a union wage premium but do not observe the clear union effect on employment levels predicted from theory. One explanation for this is

FIGURE 14-6 -Unions currently represent employed workers in Canada.

An important unanswered question about the role of unions in developed economies is whether the presence of unions affects long-run productivity. There is some evidence to suggest that the presence of a union

The union wage premium refers to the

The average union wage premium in Canada is

Unions currently represent government employees in Canada.

Canadian studies on the effects of minimum-wage laws

Which of the following statements about minimum-wage laws is most accurate?

FIGURE 14-6 -Refer to Figure 14-6. The market begins in equilibrium with the curves labelled Demand and Supply. If a labour union negotiates the wage to W2, the difference between this wage and the competitive equilibrium wage is called

FIGURE 14-6 -If a wage-setting union enters a monopsonistic labour market, the union can cause

The table below shows the labour demand and labour supply schedules in a competitive labour market. TABLE 14-1 -Refer to Table 14-1. In a competitive labour market, a legislated minimum wage imposed at $14 per hour would

The purpose of a labour union is to

The table below shows the labour demand and labour supply schedules in a competitive labour market. TABLE 14-1 -Refer to Table 14-1. In a competitive labour market, a legislated minimum wage imposed at $10 per hour would

FIGURE 14-6 -Refer to Figure 14-6. The market begins in equilibrium with the curves labelled Demand and Supply. If a labour union negotiates the wage to W2 in an otherwise competitive labour market,