The Hicks Paradox concerns
A)the irrationality of unions.
B)the irrationality of union dues.
C)the irrationality of strikes.
D)the irrationality of substituting low-skill labor for high-skill labor.
E)the irrationality of negotiating additional fringe benefits for union workers at the cost of receiving lower wages.

Question

Quizplus · Accepted Answer

The Hicks Paradox concerns the irrationality of strikes. The paradox is that while striking workers aim to increase their wages, the strike itself causes a loss of income for both the workers and the employer, leading to an overall reduction in revenue and potentially resulting in lower wages in the long run. This paradox was first articulated by economist John Hicks in his 1932 book "The Theory of Wages."

The Hicks Paradox Concerns