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Assume That the Steel Workers' Union Is Successful in Obtaining

Question 30

Multiple Choice

Assume that the steel workers' union is successful in obtaining a 10 percent wage increase from its employers. This wage increase will result in higher prices for steel. Employment in the steel industry will decline the most if:


A) there are a large number of substitutes for steel.
B) the demand for Canadian-made steel is relatively inelastic.
C) Canadians have no preference for using Canadian-made steel over imported steel.
D) the supply of foreign-made steel is relatively inelastic.

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