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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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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