Asked by Melissa Shular on Jul 08, 2024
Verified
When a union raises the wage above the equilibrium level, it reduces the quantity of labor supplied and raises the quantity of labor demanded, resulting in unemployment.
Equilibrium Level
A state in which market supply and demand balance each other, resulting in stable prices and quantities.
Unemployment
The condition of being without a job, while actively looking for one and being willing to work.
- Distinguish the different types and causes of unemployment that result from setting wages above equilibrium level.
Verified Answer
CH
Corey HawkinsJul 11, 2024
Final Answer :
False
Explanation :
When a union raises the wage above the equilibrium level, it increases the quantity of labor supplied (more people want to work at the higher wage) and decreases the quantity of labor demanded (employers want to hire fewer workers at the higher wage), potentially resulting in unemployment.
Learning Objectives
- Distinguish the different types and causes of unemployment that result from setting wages above equilibrium level.
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