9. Consider an economy with two labour markets, neither of which is unionized. Now suppose a union...
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9. Consider an economy with two labour markets, neither of which is unionized. Now suppose a union is established in one market.
a. Show the effect of the union on the market in which it is formed. In what sense is the quantity of labour employed in this market an inefficient quantity?
b. Show the effect of the union on the nonunionized market. What happens to the equilibrium wage in this market?
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Related Book For
Principles Of Macroeconomics
ISBN: 9780176591977
7th Canadian Edition
Authors: N. Mankiw, Ronald Kneebone, Kenneth McKenzie
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