Assume that the direct cost of belonging to the union in this labor market is $100/year dues, and that collective bargaining will cause each worker to lose 2 weeks pay (expected value) in the first year owing to the need for a strike to get the employer to bargain seriously with the union. Further, assume that each worker has only two years of productive working life, to which the following data apply. 1 Survivor Rate Participation Rate Employment Rate Market Interest Rate Year 1 90% 90% 90% 10% Year 2 80% 80% 80% 10% The appropriate discount rate is 10% per year. Units of labor are measured in man-weeks, and each worker normally works 50 weeks per year. Finally, assume that the employer pays the wage $80/week in the absence of collective bargaining (case a), even though that is not the result you obtained above. ! The Net Present value to the worker of joining the union as an investment to raise the market value at which he/she can sell the use of his/her stock of human capital is Assume that the direct cost of belonging to the union in this labor market is $100/year dues, and that collective bargaining will cause each worker to lose 2 weeks pay (expected value) in the first year owing to the need for a strike to get the employer to bargain seriously with the union. Further, assume that each worker has only two years of productive working life, to which the following data apply. 1 Survivor Rate Participation Rate Employment Rate Market Interest Rate Year 1 90% 90% 90% 10% Year 2 80% 80% 80% 10% The appropriate discount rate is 10% per year. Units of labor are measured in man-weeks, and each worker normally works 50 weeks per year. Finally, assume that the employer pays the wage $80/week in the absence of collective bargaining (case a), even though that is not the result you obtained above. ! The Net Present value to the worker of joining the union as an investment to raise the market value at which he/she can sell the use of his/her stock of human capital is