Topic 3

The costs to workers of unionization include all of the following, except

• Higher taxes

• union dues

• time devoted to union activities

• loss of pay during job action and strikes

According to the model of union behaviour, all of the following are possible objectives for union behaviour, except

• maximizing the wage rate that its member receive

• maximizing the employment level for its members

• maximizing the wage bill that its members receive

• maximizing the economic rent that its member receive

• improving the working conditions as much as possible

Which of the following statements regarding the labour demand curve is false?

• It intersects the isoprofit curves at the highest points.

• It represents Pareto-inefficient contracts.

• It represents a set of wage-employment outcomes such that it is impossible to make one party better off without making the other party worse off.

• It is typically more elastic than the contract curve.

The locus of the Pareto-efficient wage-employment outcomes is called the

To enhance their available wage-employment outcomes, unions can do all of the following strategies except

• Include support for restrictions on competition in the product market

• Opposition to regulation

• Support for wage fixing legislation

• Reduce the number of substitutes for union-produced goods and services

• None of the answers is correct

Under Nash's Bargaining Theory, what is not one of the four axioms that the solution should obey

• Pareto efficiency

• Symmetry

• Transformation variance

• Independence of irrelevant alternatives

According to the Rubinstein's Bargaining Theory,

• When the delay costs affect both parties by the same proportion, it will not alter the outcome

• The outcome is not affected by the disagreement costs

• The outcome is symmetric for both parties

• The outcome is not affected by who makes the first offer