bargaining theories- elasticity of demand for labor matter

1. Suppose someone said to you that most bargaining theories are wrong because they assume that the elasticity of demand for labor influences bargaining power. This person claims that the elasticity of demand for labor has no effect on contract outcomes because, in practice, unions ignore the trade-off between wages and employment. What do you think -- does the elasticity of demand for labor matter? Cite empirical evidence that supports your viewpoint.

2. Over the last 30 years union membership as a percentage of the workforce has grown substantially in Canada while declining steadily in the United States. Explain what kinds of data you could collect and how you could use that data to identify the factors that caused this difference in union growth.

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Elasticity of demand for labor:

The elasticity of demand for labor matters because the policy of the cooperation of union management requires that there should be a high consideration for the demand for labor. The elasticity of demand for labor shows the relationship between the quantity and price. These influences are therefore important to the union because it helps in determining the labor amount that is required and the amount of wages that should be paid. The bargaining decisions of the union members depend on the relationship between employment and wage. The changes in the economy is important for the union because it leads to a shift in consumer demand and therefore this shift helps when it comes to negotiations for the increase in wages (Trade union wage policy, 1956).

The strategic positioning of the union workers affects the economic bargaining power for the union members and the importance of wages to the employees. Some ...

Solution Summary

This solution discusses the elasticity of demand for labour, data collection and the difference in union growth in 450 words.

"Suppose the demand function is Q=20-4*Price+10*Income, what is the income elasticity if Income=400 and Q=20?"
Answer
A. There is not enough information to answer this question
B. 200
C.1000

1. A market consists of two individuals. Their demand equations are Q1 = 16-4P and Q2 = 20-2P respectively.
a. What is the market demand equation?
b. At a price of $2, what is the point price elasticityfor each person and for the market?

A problem do to study for....
Suppose the own price elasticity of market demandfor retail gasoline is -0.9 and Rothschild Index is 0.6 and a typical gasoline retailer enjoys sales of
$1.2 Million annually. What is the price elasticity of demand of a representative gasoline retailer's product?

Quantity Price ElasticityDemanded
100 $ 5
80 $10
60 $15
40 $20
20 $25
10 $30
1. Determine the price elasticity of demand at each quantity demanded using the formula % chg in QD divided by % chg in price.
2. Redo #1 using price changes of $

Suppose the price of apples rises from $3 a pound to $3.45 and your consumption of apples drops from 30 pounds of apples a month to 21 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it elastic, inelastic, or unitary elastic?

ABC, Inc sells it toys for $15 with a sales volume of 30,000 units per quarter. Assume the price elasticity coefficient is -0.5 and ABC, Inc raises the price to $16 in anticipation of the Christmas season. Estimated 4th quarter sales volume will be?
Use Are formula elasticity of demand.

The price of a firm's product increases from $5 to $6. As a result, the quantity demanded of the product declines from 600,000 to 500,000. The price elasticity of demandfor the good is equal to (Use the arc price elasticity of demand).