(a)
Impact on
(a)
Explanation of Solution
When the workers are unionized, the wage rate will increase. This will lead to increase in the cost of production, which in turn lower the production. As a result, supply of good will reduce, which cause increase in the price of good. Thus, unionization will increase the price in the long run.
(b)
Profit of the fruit growers both in the short run and long run.
(b)
Explanation of Solution
If Country F’s migrant workers are unionized, the wage rate will increase. This will lead to increase in the cost of production, which in turn lowers the production. When the cost of production increases, the profit will decline in the short run. Lower production leads to lower supply of good, which causes increase in the price of the good. Thus, the profit will increase and reach at the normal rate in the long run.
(c)
The mechanization of fruit picking industry.
(c)
Explanation of Solution
If Country F’s migrant workers are unionized, the wage rate will increase. This leads to increase in the cost of production. Hence, the fruit picking industry will replace labor with capital goods such as machinery, tools, and equipment. Thus, increase in the wage rate will enhance mechanization in the industry.
(d)
Employment of migrant farm workers.
(d)
Explanation of Solution
If Country F’s migrant workers are unionized, the wage rate will increase. Hence, the employers hire only fewer labors at the higher wage rate, which results in lower employment rate. This in turn creates
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Chapter ST9 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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