If a Union Is Successful in Negotiating a Wage Rate

Multiple Choice

If a union is successful in negotiating a wage rate which is above the market clearing wage, then which of the following would not occur?

A) The higher wages attract more workers leading to a shortage of jobs.
B) Management may replace part of the workforce with machinery.
C) To handle the surplus of labor the union will form a closed shop.
D) The union may shift the supply of labor curve by developing methods to ration jobs.