Which of the following statement(s) is (are) true?
I. A labor union can choose to maximize profit, maximize total wages of its members, or accept the competitive wage.
II. The number of workers employed when a union is present is generally greater than the number employed in a perfectly competitive labor market.
III. The wage rate paid to union workers typically exceeds that of workers in a competitive market.
A) I, II, and III
B) III
C) I and III
D) II and III

Question

Quizplus · Accepted Answer

I. Labor unions typically aim to maximize the wages and benefits of their members rather than maximizing profit, which is a goal more associated with firms. II. The presence of a union often leads to a higher wage rate than in a perfectly competitive labor market, which can result in fewer workers being employed due to the higher cost of labor. III. This statement is true; union workers often receive higher wages compared to their non-union counterparts in a competitive market, as unions negotiate on behalf of their members for better pay and conditions.

Which of the Following Statement(s) Is (Are) True