Principles of Microeconomics / Unit 13 MIC 1222 short lesson, about 20 seconds
Productivity, Substitution and Membership
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The idea
If union workers are more productive, demand for them shifts right and the job loss shrinks. But firms also substitute capital for dearer labor. Why membership fell is contested: services, imports, protective laws, the legal setting.
In practice
At a high enough wage the three-machine plan wins.
Where people slip
All four are attributed; the first three fail to explain countries that kept high membership.
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