Consider the labor market illustrated in the figure to the right. Suppose this market has a unionized sector and a nonunionized sector such that the demand for unionized workers is DU and the demand for nonunionized workers is DNU. Also assume that the supply of unionized and nonunionized labor is fixed at SL. In equilibrium, what is the market wage?

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 18RQ: What is deflation?
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Consider the labor market illustrated in the figure to the right. Suppose this market has a unionized sector and a nonunionized sector such that the demand for unionized workers is DU and the demand for nonunionized workers is DNU. Also assume that the supply of unionized and nonunionized labor is fixed at SL. In equilibrium, what is the market wage?
SL
22-
20-
18-
16-
14-
12-
10-
4-
2-
DNU
DL
6 8 10 12 14 16 18 20 22 24 26 28 30
Number of workers (1000s)
Wage per worker
Transcribed Image Text:SL 22- 20- 18- 16- 14- 12- 10- 4- 2- DNU DL 6 8 10 12 14 16 18 20 22 24 26 28 30 Number of workers (1000s) Wage per worker
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