Figure 14.4 -Suppose a Labor Market Has Perfectly Inelastic Supply That Is

Multiple Choice

Figure 14.4
-Suppose a labor market has perfectly inelastic supply that is composed of union and non-union workers,and the union shifts its policy from maximizing total economic rents to maximizing total wages earned by members.What happens to the equilibrium employment level and wage for non-union workers?

A) Both increase.
B) Employment increases and wage declines.
C) Wage increases and employment declines.
D) Both decline.