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Suppose that a car factory initially hires 1,600 workers at $20 per hour and that each worker works 40 hours per week. Then the factory
Suppose that a car factory initially hires 1,600 workers at $20 per hour and that each worker works 40 hours per week. Then the factory unionizes, and the new union demands that wages be raised by 25 percent. The firm accedes to that request in collective bargaining negotiations but then decides to cut the factory's labor force by 30 percent due to the higher labor costs.
- Suppose that the workers who lose their jobs as a result of the agreement end up unemployed. By how much do the total wages received each week by the initial 1,600 workers (both those who continue to be employed at the factory and those who lose their jobs) change from before the agreement to after the agreement?
Total wages (Click to select) fall rise by $ __?.
- If the workers who lose their jobs as a result of the agreement end up making $15 per hour at jobs where they work 40 hours per week, by how much do the total wages received each week by the initial 1,600 workers change from before the agreement to after the agreement?
Total wages (Click to select) fall rise by $ __? .
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