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Questions

Princip of Econ-Microeconomics Quiz 11

Multiple choice

What are some possible negative economic consequences of unions in competitive markets? (Select all that apply)

Options
A.Unions can prevent entry of workers into an industry, causing higher wages than the competitive equilibrium, and causing deadweight loss in the labor market
B.Unions can "strike" which reduces productivity in the market and for the broader economy
C.Unions reduce communication between workers and management, facilitating lower information flow and inefficiency
D.Unions can decrease overall productivity through labor hiring requirements
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Step-by-Step Analysis
Examining the prompt, we’re asked to identify potential negative economic consequences of unions in competitive markets, selecting all that apply. Option 1: 'Unions can prevent entry of workers into an industry, causing higher wages than the competitive equilibrium, and causing deadweight loss in the labor market' This aligns with classic monopoly/union effects where organized labor restricts entry, pushes wages above the market-clearing level, and creates deadweight loss by s......Login to view full explanation

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