By restricting labor supply a trade union can _____ and _______?
Correct answer: C. increase the wage, lower employment
- A. increase the wage, increase employment
- B. maintain the wage, increase employment
- C. increase the wage, lower employment
- D. maintain the wage, lower employment
Explanation
A union that restricts labour supply shifts the available labour curve leftward, raising the wage for those employed but reducing the quantity of labour firms hire. Thus wages increase while employment falls.
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