QuestionD. negotiate for a higher than market wage hike every year through collective bargaining. b. Suppose that the objective of a union is to maximize the total dues paid to the union by its membership. If union dues are paid as a flat amount per union member employed, the union's strate will be to A. negotiate for the wage level that is consistent with perfectly elastic demand for labor. B. negotiate for the maximum wage rate the employer is willing to pay for the number of workers belonging to the union. C. negotiate for the wage level that is consistent with unit elastic demand for labor. D. negotiate for limiting the entry of new workers over time. Clear all Check answer
Studdy Solution
STEP 1
1. The union's objective is to maximize total dues paid by its members.
2. Union dues are a flat amount per employed member.
3. The union can influence wage levels through negotiation.
STEP 2
1. Understand the relationship between union dues, membership, and wage levels.
2. Analyze the impact of different wage negotiation strategies on union membership and dues.
3. Determine the strategy that maximizes total dues.
STEP 3
Union dues are a flat amount per member, meaning total dues are proportional to the number of employed union members.
STEP 4
If the union negotiates for a wage level that is too high, it may reduce the number of employed members because employers may hire fewer workers or substitute with non-union labor.
STEP 5
Conversely, if the wage level is too low, it may not maximize the dues per member, as the union could have negotiated a higher wage without losing employment.
STEP 6
The union should aim for a wage level where the demand for labor is unit elastic. This ensures that any increase in wages does not lead to a proportionate decrease in employment, thereby maximizing total dues.
STEP 7
Therefore, the union's strategy should be to negotiate for the wage level that is consistent with unit elastic demand for labor.
The correct strategy is:
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