When labor unions successfully bargain for wage rates that are _____ than the equilibrium wage rate, they may cause _____.
A)lower; frictional unemployment.
B)equal to; shortages in that labor market.
C)higher than; an increase in structural unemployment.
D)higher than; shortages in that labor market.

Question

Quizplus · Accepted Answer

When labor unions negotiate wages higher than the equilibrium wage rate, it can lead to structural unemployment because the higher wages may result in fewer jobs being available than there are workers willing to work at that wage.

When Labor Unions Successfully Bargain for Wage Rates That Are