Exhibit 27-9 -Refer to Exhibit 27-9. Let D_A and D_B represent demand for labor curves facing unions A and B, respectively. As a result of their efforts, both unions succeed in increasing the wage rate from W₁ to W₂. In terms of the wage-employment trade-off, the wage increase A)had a larger impact on employment for union A than for union B. B)had a larger impact on employment for union B than for union A. C)had the same impact on employment in both unions. D)cannot be determined without further information.

Question

Quizplus · Accepted Answer

The wage increase had a larger impact on employment for union A than for union B because the demand curve for labor facing union A is steeper than the demand curve for labor facing union B. This means that a given increase in the wage rate will lead to a larger decrease in employment for union A than for union B.

Exhibit 27-9 ​

Exhibit 27-9