ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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### Labor Market Analysis: Unionville City Bus Drivers

The table below illustrates the quantity of bus drivers demanded and supplied in Unionville's labor market, where all drivers belong to a union. 

| **Wage Per Hour** | **Quantity of Workers Demanded** | **Quantity of Workers Supplied** |
|-------------------|---------------------------------|---------------------------------|
| $14               | 12,000                           | 6,000                           |
| $16               | 10,000                           | 7,000                           |
| $18               | 8,000                            | 8,000                           |
| $20               | 6,000                            | 9,000                           |
| $22               | 4,000                            | 10,000                          |
| $24               | 2,000                            | 11,000                          |

**Key Insights:**

1. **Equilibrium Analysis:**
   - The equilibrium wage and quantity occur when the quantity of workers demanded equals the quantity supplied. Here, this occurs at a wage of $18 per hour, with 8,000 workers demanded and supplied.

2. **Union Influence on Wages:**
   - If the union negotiates the wage to $4 higher than the equilibrium ($22 per hour), the table shows:
     - Demand: 4,000 workers
     - Supply: 10,000 workers
   - This results in an **excess supply** of labor, with 6,000 more workers supplied than demanded.

This analysis highlights the impact of wage adjustments due to union negotiations on labor supply and demand in Unionville's bus driving sector. Understanding these dynamics is crucial for navigating the labor market and anticipating potential challenges.
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Transcribed Image Text:### Labor Market Analysis: Unionville City Bus Drivers The table below illustrates the quantity of bus drivers demanded and supplied in Unionville's labor market, where all drivers belong to a union. | **Wage Per Hour** | **Quantity of Workers Demanded** | **Quantity of Workers Supplied** | |-------------------|---------------------------------|---------------------------------| | $14 | 12,000 | 6,000 | | $16 | 10,000 | 7,000 | | $18 | 8,000 | 8,000 | | $20 | 6,000 | 9,000 | | $22 | 4,000 | 10,000 | | $24 | 2,000 | 11,000 | **Key Insights:** 1. **Equilibrium Analysis:** - The equilibrium wage and quantity occur when the quantity of workers demanded equals the quantity supplied. Here, this occurs at a wage of $18 per hour, with 8,000 workers demanded and supplied. 2. **Union Influence on Wages:** - If the union negotiates the wage to $4 higher than the equilibrium ($22 per hour), the table shows: - Demand: 4,000 workers - Supply: 10,000 workers - This results in an **excess supply** of labor, with 6,000 more workers supplied than demanded. This analysis highlights the impact of wage adjustments due to union negotiations on labor supply and demand in Unionville's bus driving sector. Understanding these dynamics is crucial for navigating the labor market and anticipating potential challenges.
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