Multiple Choice
The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company.
FIGURE 14-4
-Refer to Figure 14-4.Suppose this labour market is in a monopsonistic equilibrium.Then,suppose the workers form a union and negotiate a higher wage with the firm.In this case the wage will be ________ and the employment will be ________.
A) above $35 per hour; less than 750 units of labour
B) between $25 and $35 per hour; between 750 and 1000 units of labour
C) above $25 per hour; above or below 750 units of labour,depending on the negotiated wage
D) $30 per hour; 1000 units of labour
E) $35 per hour; 750 units of labour
Correct Answer:
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