If a union restricts the supply of labor,it ________ the wage rate and ________ the level of employment.
A) raises; decreases
B) raises; increases
C) raises; does not change
D) lowers; decreases
E) lowers; increases

Question

Quizplus · Accepted Answer

Unions negotiate for higher wages for their members, which can lead to a higher wage rate. However, by restricting the supply of labor, they can also lead to a decrease in the level of employment, as employers may hire fewer workers at the higher wage rate.

If a Union Restricts the Supply of Labor,it ________ the Wage