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Assume the labor market for fuel-efficient vehicle technologies in the United States is illustrated in the figure to the right. If the United Auto
Assume the labor market for fuel-efficient vehicle technologies in the United States is illustrated in the figure to the right. If the United Auto Workers (UAW) union organizes these workers and negotiates a wage of $22.50 an hour, what will be the resulting deadweight loss, if any, from the union-negotiated wage compared to the competitive equilibrium? 1.) Using the triangle drawing tool, shade in surplus for the employers (the consumers of labor) from the union-negotiated wages (CS) in the figure to the right. 2.) Using the triangle (PSTriangle) and rectangle (PS Rectangle) drawing tools each once, shade in surplus for the workers (the suppliers of labor). 3.) Using the triangle drawing tool, shade in deadweight loss (DWL) from the union-mandated wage. Carefully follow the instructions above, and only draw the required objects. Wage (dollars per hour) 35.00- 32.50- 30.00 27.50 25.00- Supply Union 22.50 20.00- 17.50- 15.00- 12.50- 10.00- 7.50- 5.00- Demand 2.50- 10.00- 0 50 100 150 200 Quantity (workers in 1000s) 250 300
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