28. A union representative observed that if the union members' wages were increased by some proportion, the

Question

workers would eventually suffer a greater than proportional decline in employment. This statement could best be explained if:
A. the new ages are to take effect immediatly
B. union labor can easily be replaced with capital
C. union labor is an insignificant portion of the total cost of production
D. the demand for the final product the workers produce is relatively inelastic

please answer and explain ty =]

Answer 1

B. - If you try to increase wages, employer just replaces people with capital.

That obviously assumes that union contract regulates only wages but not number of workers.

Answer 2

C Labor is already to much of the cost factor, to increase this cost would lead to a need to reduce the work force to reduce cost. Health Insurances cost also plays a factor in this process. There are direct wages; what your paid! then indirect wages or the cost of insurances and benefits that also are a piece of the cost of your labor force.

Answer 3

I'd have to go with B.

There comes a point where it makes more sense to outsource or automate. As the cost of labor goes up, it makes more and more sense to do just that.

Answer 4

Unions should burn in hell.

Either that or everything needs to be unionized. Until then you're just playing with poo in a sandbox.

Answer 5

B Dorian....do you get paid holidays,vacations,health insurance...if you do thank a union member