A strongly efficient union contract:
A)pays a wage equal to the monopoly union wage
B)pays a wage equal to the competitive wage
C)sets employment at the monopoly union level
D)sets employment at the competitive level

Question

Quizplus · Accepted Answer

A strongly efficient union contract sets employment at the competitive level, meaning that it allows for the hiring of a larger number of workers at a lower wage rate. This can benefit both the employer, who has a larger pool of qualified workers to choose from, and the employees, who may be willing to work for less in exchange for job security and other benefits provided by the union. Setting a wage equal to the monopoly union wage would limit employment opportunities and potentially harm the economy, while setting a wage equal to the competitive wage allows for efficient allocation of resources.

A Strongly Efficient Union Contract