Chapter 29: Q. 2 (page 648)
Give three reasons why a government might seek to limit the power of a union.
If government imposes some restrictions on trade unions, then self-interest behavior of trade unions can be controlled accordingly.
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Why would a perfectly competitive firm be unable to take advantage of a dependence of the marginal product of labor on the level of the wage rate paid by the firm? (Hint: Recall that a firm in a perfectly competitive labor market cannot influence the market clearing and profit-maximizing wage rate.)
Take a look at Figure 29-7. Suppose that Wm= \(12 per hour, Wmin= \)15 per hour, Qm=1,000 worker-hours of labor input, and Qmin=1,400 worker-hours of labor input. How much does require this monopsonist to pay the minimum wage instead of its profit-maximizing wage rate increase or reduce its total wage payments to all of its employees?
The Writers Guild of America (WGA), which represents TV and film screenwriters, called for a strike, and most screenwriters stopped working. Nevertheless, writers for certain TV soap operas, such as the Young and the Restless-which have had shrinking audiences for years, draw small numbers of viewers for repeat shows, and rarely sell on Blu-ray discs-opted to drop their WGA memberships and tried to continue working during the strike. Why do you suppose that the WGA posted on its Web site a phone number for union members to report "strike-breaking activities and 'scab writing" "o the union's 12-person Strike Rules Compliance Committee? What effect do strikebreakers have on the collective bargaining power of a union?
The price and wage structure that a firm faces is depicted in the following table.
The firm finds that the price of its product changes with the rate of output. In addition, the wage it pays its workers varies with the amount of labor it employs. This firm maximizes profits. How many units of labor will it hire? What wage will it pay?
Given the information in Problem 29-17, how much more or less do the firms in this industry spend, in total, on the labour employed each hour as a consequence of the establishment of the union wage WU= \(40 per hour above the equilibrium wage We= \)30 per hour?
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