a. Suppose that the objective of a union is to maximize the total dues paid to the union by its membership. Now, consider the case where union dues are a percentage of total earnings of the union membership. Then the union's strategy will be to
Part 2
A.
negotiate for limiting the entry of new workers over time.
B.
negotiate for the maximum wage rate the employer is willing to pay for the number of workers belonging to the union.
C.
negotiate for a higher than market wage hike every year through collective bargaining.
D.
negotiate for the wage level that is consistent with unit elastic demand for labor.
C. negotiate for a higher than market wage hike every year through collective bargaining.
wrong answer
Apologies for the incorrect response. The correct answer is:
D. negotiate for the wage level that is consistent with unit elastic demand for labor.
By negotiating for a wage level that is consistent with unit elastic demand for labor, the union ensures that it maximizes the total dues paid to the union by its membership. Unit elastic demand for labor means that a change in wages will result in an equal percentage change in the quantity of labor demanded. By setting the wage level at this point, the union maximizes its total dues as it ensures that any decrease in membership due to higher wages is offset by the higher wages paid by the remaining members.
b. Suppose that the objective of a union is to maximize the total dues paid to the union by its membership. If union dues are paid as a flat amount per union member employed, the union's strategy will be to
Part 4
A.
negotiate for the wage level that is consistent with unit elastic demand for labor.
B.
negotiate for the wage level that is consistent with perfectly elastic demand for labor.
C.
negotiate for the maximum wage rate the employer is willing to pay for the number of workers belonging to the union.
D.
negotiate for limiting the entry of new workers over time.
C. negotiate for the maximum wage rate the employer is willing to pay for the number of workers belonging to the union.
If union dues are paid as a flat amount per union member employed, the union's objective would still be to maximize the total dues paid by its membership. In this case, the best strategy for the union would be to negotiate for the maximum wage rate the employer is willing to pay for the number of workers belonging to the union. By securing the highest possible wage rate, the union can ensure that the total dues paid by its members are maximized. This strategy would benefit the union by increasing the overall earnings of its members, leading to higher dues payments.
The union's objective in this case is to maximize the total dues paid by its membership, which are based on a percentage of their total earnings. In order to achieve this objective, the union would need to strategize in a way that increases the total earnings of its membership.
Option A: Negotiating for limiting the entry of new workers over time may not directly increase the total earnings of the union membership. While it could potentially reduce competition among union members for available jobs, it does not ensure higher wages for existing members.
Option B: Negotiating for the maximum wage rate the employer is willing to pay for the number of workers belonging to the union could potentially lead to higher wages for the union members. By negotiating for the highest wage rate, the union aims to ensure that its members earn more, and therefore increase their total earnings. This option aligns with the objective of maximizing total dues paid to the union.
Option C: Negotiating for a higher than market wage hike every year through collective bargaining could also result in higher wages for the union members. By consistently striving for wage hikes above the market rate, the union can increase the total earnings of its membership, and thus maximize the total dues paid to the union.
Option D: Negotiating for the wage level that is consistent with unit elastic demand for labor aims to find a balance between the wage level and the demand for labor. While this approach does not directly maximize the total earnings of the union membership, it could help maintain a sustainable wage level that is reasonable for both the employer and the workers.
Considering the objective of maximizing total dues paid to the union, options B and C are more aligned with this goal. However, it is important to note that the best strategy for a union may vary depending on the specific circumstances and objectives of the union.