To the extent that unions can transfer profits from unionized employers to union workers, they will
A) reduce the incentive of unionized employers to invest in fixed capital and research.
B) increase employment in the unionized sector.
C) reduce the incentive of nonunion firms to invest and expand their output.
D) increase the productivity of labor in the long run.

Question

Quizplus · Accepted Answer

When unions transfer profits to workers, it can reduce the funds available for employers to invest in capital and research, thus reducing their incentive to do so.

To the Extent That Unions Can Transfer Profits from Unionized