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Economics Help?

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Suppose that a union's goal is to maximize the total wage income received by union workers, namely, the average union wage times the number of union workers employed. To achieve this goal, the union should:

A. Increase the union wage rate

B. Decrease the union wage rate

C. Increase the union wage rate if labor demand is inelastic and decrease the wage rate if labor demand is elastic

D. Decrease the union wage rate if labor demand is inelastic and increase the wage rate if labor demand is elastic

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2 ANSWERS


  1. C  if labor demand is inelastic (or as I say in sensitive to rise) then increasing wage won't lower quantity demanded of labor


  2. 1 - "C" is right one.

    2 - "D" is right.
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