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Suppose the United Steel Workers Union Succeeds in Raising Wages

Question 35

Multiple Choice

Suppose the United Steel Workers Union succeeds in raising wages in the steel industry.Employment in the steel industry will then tend to drop a good deal if, other things being equal:


A) employers increase prices and the demand for steel is elastic.
B) the higher wages lead to commensurably lower unit costs.
C) labor cost is a relatively small percentage of the final cost of steel.
D) the possibilities of substituting capital for labor are low for technical reasons.
E) employers hold the line on prices and the demand for steel is elastic.

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