Consider two labor markets in which jobs are equally attractive in all respects other than the wage rate.All workers are equally able to do either job.Initially,both labor markets are perfectly competitive.If a union organizes workers in one of the markets,then the wage rates will tend to
A)rise in both markets.
B)fall in both markets
C)rise for the union jobs,but remain unchanged for the nonunion jobs.
D)rise for the union jobs and fall for the nonunion jobs.

Question

Quizplus · Accepted Answer

When a union organizes workers in one market, it typically negotiates higher wages for those jobs. As a result, workers may leave the nonunion market to join the unionized one, increasing the labor supply in the nonunion market and causing wages there to fall.

Consider Two Labor Markets in Which Jobs Are Equally Attractive