Suppose that garbage collectors and landscaping workers have no unions. Now suppose that garbage collectors form unions. What does this do the labor supply and wages of landscaping workers?

Question

Quizplus · Accepted Answer

The formation of a union by garbage collectors will lead to an increase in labor demand by the garbage collection industry, and hence an increase in their wages. As a result, there will be a shift in the labor supply from landscaping workers to garbage collectors as the wages of the former will be lower. This will increase the supply of labor in the landscaping industry, leading to a decrease in wages. Therefore, the correct option is B- Labor supply increases, and wages decrease.

Suppose That Garbage Collectors and Landscaping Workers Have No Unions