1. In the United States, union workers earn ______ to ______ percent more than nonunion workers doing the same work. The union wage differential is ______ (larger/smaller) in most other industrialized countries.
2. Arrows up or down: Featherbedding may decrease the demand for labor because it ______ production costs and______ the price of the output, which ______ the quantity of the product demanded and produced.
3. Arrows up or down: Unions tend to ______ turnover rates and thus______ training costs and ______ the average experience level of workers.
4. Unions decrease productivity. ______ (True/False/Uncertain)
5. The United States has ______ (higher/lower) unionization rates than other industrialized countries.
6. Arrows up or down: The deregulation of trucking ______ the wages of union truckers and ______ total employment of union truckers.
7. In the last few decades, the share of school teachers who come from the highest aptitude groups of college graduates has ______, a result of ______ caused by ______.
8. Maximizing Labor Income. Consider a union that faces a linear demand for its workers. The vertical intercept is $40 and the slope is $0.20 per worker, so the horizontal intercept is 200 workers.
a. The union faces a trade-off between the wage and employment: For every $2 increase in the wage, employment decreases by ______ workers.
b. Suppose the union tentatively picks a wage of $30, where the elasticity of demand for labor is 3.0 (in absolute value). If the union decreases the wage by 5 percent, by how much will the quantity of labor demanded increase? Will total labor income increase or decrease?
c. Suppose the union s objective is to maximize total labor income. What is the income-maximizing wage and quantity of labor demanded?