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Q: Consider an economy with two labour markets, neither of which is unionized. Now suppose a union is established in one market. (Each part require
Q:
Consider an economy with two labour markets, neither of which is unionized. Now suppose a union is established in one market. (Each part require a diagram; you may draw both in part a) and write only the explanation in part b)
- Show the effect of the union on the market in which it is formed. In what sense is the quantity oflabour employed in this market an inefficient quantity?
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