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 wage rate will tend to
A)rise in both markets
B)fall in both markets
C)rise for the union job,but remain unchanged for the nonunion job
D)fall for the nonunion job,but remain unchanged for the union job
E)rise for the union job and fall for the nonunion job

Question

Quizplus · Accepted Answer

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

Consider Two Labor Markets in Which Jobs Are Equally Attractive