Question

Consider two economic regions, region A and region B. If region A has strict union protection laws present, while region B lacks union protection laws, we can expect that region A will have a higher about the same a lower unemployment rate compared to region B holding all esle constant.a. a lower
b. a higher
c. about the same

Answer 1

Answer:

B. A higher unemployment rate

Explanation:

High union memership can increase unemployment in two ways:

• Creating a barrier of entry because non-unionized workers can be barred from getting employed in industries with high union membership.
• Pushing salaries above the marginal productivity of labor, especially the minimum wage, causing firms to hire less because hiring becomes more costly.