Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 1

How is the pure union wage advantage defined If in a given labor market the wage rate would be $16 without a union and $20 with a union, then what is the pure union wage advantage Explain how, and in what direction, each of the following might cause the measured union wage advantage to vary from the pure advantage: (a) the spillover effect, (b) the threat effect, (c) the product market effect, and (d) the superior worker effect.