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This figure depicts the decision environment of a worker before and after being represented by a union. We can deduce that: The individual can work
This figure depicts the decision environment of a worker before and after being represented by a union. We can deduce that: The individual can work up to hours. Before joining the union, the most this worker can earn is $ . The individual pays $ for union fees and the union provides a wage difference of $ Suppose this individual has MRS = c/. This individual's reservation wage is $ This worker participate without the union and participate with the union. (Enter 1 for "will", -1 for "will not", 0 for "it can not be deduced from this information") The union change this individual's participation choice. (Enter 1 for "does", -1 for "does not", 0 for "it can not be deduced from this information") Now suppose that the union provides wage $3. In this case the individual's optimal choice will provide income equal to $ The individual will enjoy hours of leisure
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