what is the firm’s profit maximizing level of employment?

3. Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in the

town of Unionville, where all the bus drivers belong to a union.

Wage Per Hour Quantity of Workers Demanded Quantity of Workers Supplied

12,000

10,000

8,000

6,000

4,000

2,000

$14

$16

$18

$20

$22

$24

TABLE 14.12

6,000

7,000

8,000

9,000

10,000

11,000

a. What would the equilibrium wage and quantity be in this market if no union existed?

b. Assume that the union has enough negotiating power to raise the wage to $4 per hour higher than it

would otherwise be. Is there now excess demand or excess supply of labor?

4. Do unions typically oppose new technology out of a fear that it will reduce the number of union jobs? Why

or why not?

5. Compared with the share of workers in most other high-income countries, is the share of U.S. workers
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