Question

8. Exam. Semester Exam

Question 5 of 30
2 Points
Which of these is most likely to lead to an increase in wages?
A. A government with a budget surplus
B. The use of an assembly line
C. Outsourcing and offshoring
D. The formation of a labor union​

Answer 1

D. The formation of a labor union​

Step-by-step explanation:

The formation of a labor union will likely lead to an increase in wages because of two main reasons:

• Labor unions engage in collective bargaining with employers, and this negotiations usually result in higher wages.
• Labor unions often restrict the labor supply that enters a particular market: they only allow unionized workers to get the jobs of the industry, and/or keep the labor supply artificially low in other to push wages to rise. This is because, the fewer workers in an industry, the scarcer they are, and the higher their wages become.