Asked by Jenna Wright on Jun 03, 2024
Verified
Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:
A) $6 billion per year.
B) about 2 percent of domestic output.
C) less than one-half of 1 percent of domestic output.
D) about 4 percent of domestic output.
Union Wage Advantage
The higher wages earned by unionized workers compared to their non-union counterparts due to collective bargaining.
Misallocation
The inefficient distribution of resources, often leading to missed opportunities or wasted potential.
Labor
Labor refers to the human effort, both physical and mental, used in the production of goods and services.
- Assess the effects of trade unions on production levels, employee retention, and overall economic performance.
Verified Answer
AD
Abigail DuranJun 07, 2024
Final Answer :
C
Explanation :
Empirical studies show that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is less than one-half of 1 percent of domestic output. This means that the impact of the union wage advantage on efficiency and overall output is relatively small.
Learning Objectives
- Assess the effects of trade unions on production levels, employee retention, and overall economic performance.
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