1.  Demand-Enhancement Model  Exclusive or Craft Union Model  Inclusive or Industrial Union Model © 2013 McGraw-Hill Ryerson Ltd. Chapter 14, LO4 1

2. Wage Rate (Dollars) Quantity of Labour WuWu QcQc QuQu WcWc D1D1 D2D2 S Increase In Demand LO4 13-2 Union can increase product demand by altering price of other inputs © 2013 McGraw-Hill Ryerson Ltd. Chapter 14uu, LO4 2

3.  Effectively reduce supply of labor  Restrict immigration  Reduce child labor  Compulsory retirement  Shorter workweek  Exclusive unionism  Occupational licensing LO4 13-3 © 2013 McGraw-Hill Ryerson Ltd. Chapter 14, LO4 3

4. Wage Rate (Dollars) Quantity of Labour D S1S1 QcQc WcWc S2S2 WuWu QuQu Decrease In Supply LO4 13-4 © 2013 McGraw-Hill Ryerson Ltd. Chapter 14, LO4 4

5. Union controls the labour supply Wage Rate (Dollars) Quantity of Labour D S QcQc WcWc WuWu QuQu QeQe a b e LO4 13-5 © 2013 McGraw-Hill Ryerson Ltd. Chapter 14, LO4 5

6.  Are unions successful?  Wages 15% higher on average  Consequences:  Higher unemployment  Restricted ability to demand higher wages LO4 13-6 © 2013 McGraw-Hill Ryerson Ltd. Chapter 14, LO4 6

7.  Monopsony and inclusive unionism  Single buyer and seller  Not uncommon  Indeterminate outcome  Desirability LO4 13-7 © 2013 McGraw-Hill Ryerson Ltd. Chapter 14, LO4 7

8. LO4 Wage Rate (Dollars) Quantity of Labour D=MRP S QcQc WcWc WuWu Q u =Q m MRC WmWm a 13-8 © 2013 McGraw-Hill Ryerson Ltd. Chapter 14, LO4 8