2. In the retail trade industry, unionized workers earn 19.0% more than non-unionized workers do. As you learned in class, this does not necessarily mean that non-union workers who gained union membership would receive raises of (on average) 19%, nor does it mean that the existence of the union increased the wages of workers who were able to join the union by 19%. a. As we noted in class, many unions prefer to grant union membership to workers with a significant amount of work experience in the industry. In light of that fact alone, is the 19% difference between union and non-union wages an overestimate or an underestimate of the value of belonging to a labor union? (Other factors might also affect that comparison, but ignore them for this part of the question.)

Use 2-diagrams, one for unionized and the other for non-unionized sector where both markets are initially in equilibrium. Assume that despite an increase in wages in unionized sector, the employment level is fixed in the unionized sector at the initial competitive equilibrium level. What would be the impact of an increase in wages on both sectors in this case? Explain

a. There are 100 workers. In 2084, after decades of complaining about low wages, the programmers at Robotron have a secret-ballot vote and form a union. Their new union bargains for a wage of $80 per hour, and the newly unionized programmers are very excited. How many workers will Robotron hire at the new, higher wage?   There will be _____  workers at Robotron after unionization.   b. Suppose there were 65 workers at Robotron before unionization. How many Robotron workers just got laid off?   After unionization, ______Robotron workers will be laid off.   c. A natural choice for the other programmers is to look for work at Korrexia: As before, the remaining workers have perfectly inelastic labor supply, so all 100 workers are going to work at one of the two firms. How many programmers work for Korrexia? What’s the wage for the nonunion Korrexia workers?   Korrexia will hire ____workers. Korrexia workers will earn wages of $ ____   d. You might think that one solution is to…

Now show the effect of unionization in the coal mining sector on the market for wood. PRICE OF WOOD As a result of the unionization: I Supply Demand QUANTITY OF WOOD The price of coal will increase and the price of wood will decrease The price of coal will decrease and the price of wood will decrease The price of coal will decrease and the price of wood will increase The price of coal will increase and the price of wood will increase