AP® Microeconomics

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Moderate

Factor Market: Craft Union in Labor Market

APMICR-XYEDU2

Some states allow the creation of union shops, businesses which only hire union members or require employees to join unions once they are hired. If electricians form a craft union for individuals with very specific skills in one of these states, what do economists predict would happen in a labor market where businesses will now only hire union members?

A

Equilibrium wages will decrease while quantity of electricians hired will increase.

B

Equilibrium wages and quantity of electricians hired will both decrease.

C

Equilibrium wages will increase while quantity of electricians hired will decrease.

D

Equilibrium wages and quantity of electricians hired will both increase.

E

Equilibrium wages will stay the same while quantity of electricians hired will increase.