Assuming the wage-employment tradeoff exists, if labor in a particular geographic area is homogeneous and the unionized workers successfully negotiate a higher wage rate, then
A)nonunion workers will also experience an increase in their wages.
B)nonunion workers will not be affected by what happens in the unionized labor market.
C)the nonunion labor market will experience an increase in the number of workers, and this will cause wage rates to decrease in this market.
D)nonunion workers will become members of the union that has just negotiated a wage increase because they want higher wages.

Question

Quizplus · Accepted Answer

Given the assumption of a wage-employment tradeoff and homogeneous labor, if unionized workers negotiate higher wages, some employers may seek cheaper alternatives, increasing the supply of labor in the nonunion sector. This increased supply can lead to lower wages in the nonunion market, as described in option C.

Assuming the Wage-Employment Tradeoff Exists, If Labor in a Particular