Final answer:
Labor unions aim to protect workers' rights and interests, labor demand curve and iso-profit curves depend on various factors, bargaining range is the acceptable range of negotiation outcomes, and Pareto-efficiency guides negotiation to achieve mutually beneficial outcomes.
Step-by-step explanation:
a) Union's objectives: The primary objective of a labor union is to represent and protect the rights and interests of its members, which include improved working conditions, higher wages, and better benefits. Constraints faced by unions can include the negotiation process with employers, legal restrictions, and the bargaining power of the union relative to the firm. Optimization for unions involves achieving the best possible outcome for their members in terms of employment terms and conditions.
b) Relationship between firm's labor demand curve and iso-profit curves: The firm's labor demand curve represents the quantity of labor the firm is willing to hire at different wage rates. The iso-profit curves depict combinations of labor and capital inputs that generate the same level of profit for the firm. The relationship between these curves depends on factors such as the elasticity of demand for the firm's output and the substitutability of labor and capital.
c) Bargaining range between union and firm: The bargaining range refers to the set of possible outcomes of negotiation between a union and a firm. It represents the range of wages and working conditions that both parties find acceptable. The bargaining range is determined by factors such as the strength of the union, the firm's profits, and the prevailing market conditions.
d) Pareto-efficiency and contract curve: Pareto-efficiency is an economic concept that refers to a situation where it is not possible to make one party better off without making another party worse off. The contract curve represents the set of Pareto-efficient outcomes that can be achieved through negotiation between the union and the firm. It shows the combinations of wages and working conditions that maximize the joint welfare of the union and the firm.