Some unions limit the no. of union members and require employers to hire union members only, referred to as “closed shop”. Suppose a closed shop union limits membership to Lu and lets the firm determine the wages. Illustrate the equilibrium wage and quantity of labor using a diagram with the demand and supply curve for labor, given that the supply of labor of union workers is completely fixed at Lu. It was observed that there is a waiting list for union membership. Why?
Some unions limit the no. of union members and require employers to hire union members only, referred to as “closed shop”. Suppose a closed shop union limits membership to Lu and lets the firm determine the wages. Illustrate the equilibrium wage and quantity of labor using a diagram with the demand and supply curve for labor, given that the supply of labor of union workers is completely fixed at Lu. It was observed that there is a waiting list for union membership. Why?
Chapter10: Labor Markets And Income Distribution
Section: Chapter Questions
Problem 6SQP
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Some unions limit the no. of union members and require employers to hire union members only, referred to as “closed shop”. Suppose a closed shop union limits membership to Lu and lets the firm determine the wages.
- Illustrate the equilibrium wage and quantity of labor using a diagram with the demand and supply curve for labor, given that the supply of labor of union workers is completely fixed at Lu.
- It was observed that there is a waiting list for union membership. Why?
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