Consider an economy with two labor markets: one for manufacturing workers and on
ID: 1145120 • Letter: C
Question
Consider an economy with two labor markets: one for manufacturing workers and one for service workers. Suppose initially that neither is unionized. Which of the following will happen to the manufacturing labor market if manufacturing workers formed a union? Check all that apply. The wage of manufacturing workers will rise. The quantity of manufacturing workers demanded will fall. The quantity of manufacturing workers supplied will rise. There will be an increase in employment of manufacturing workers Which of the following describes the effect of the changes in the manufacturing labor market on the market for service workers, which is not unionized? Check all that apply. The wage of service workers will fall The supply of service workers will rise. The demand for service workers will fall. There will be an increase in employment in the service sector.Explanation / Answer
1. Ans:
Explanation:
When workers in manufacturing sector unionized, wages in manufacturing sector will rise. When wage rised quantity of manufacturing workers demanded will fall and the quantity of manufacturing workers supplied will rise.
2. Ans:
Explanation:
In manufacturing sector, their is a surplus of workers. Thus.the supply of labor in the market for service workers would increase as unemployed manufacturing workers switched over to service sector. Due to this, the equilibrium wage in service market would be go down and the equilibrium employment will increase.