Marginal Utility and Impacts of Labor Union

Part III

Deliverable Length: 600–800 words

The government decides to tax cookbooks because they feel that they encourage overeating and can lead to health issues, such as obesity and heart disease. Answer the following:

  • What type of tax is this? Explain.
  • What happens to the supply of cookbooks?
  • What happens to the equilibrium price?
  • Who pays the tax at the end?
  • Is this a good way to finance programs to improve health?
  • What other types of tax can the government use to increase revenues?

Part IV

Deliverable Length: 600–850 words becomes wildly successful in the United States, and you decide to export overseas. Answer the following:

  • Does this reflect an absolute or a comparative advantage?
  • Name 4 issues that you will encounter as you become a multinational corporation.
  • What happens to your marginal utility as you buy your third luxury automobile? Why?

Part V

Deliverable Length: 600–850 words

In the article entitled “The Economic Effects of Labor Unions Revisited,” Vedder and Galloway attempt to prove statistically, using historical data, that labor unions do not have a good effect on the economy. Read the article, and explain the following microeconomic concepts that the authors discuss and how they are related to unions:

  • Demand, supply, and equilibrium wage rates of labor
  • Unemployment
  • Deadweight welfare loss
  • Elasticity
  • Real GDP and economic growth
  • Income per capita
  • Population growth and aging
  • Marginal costs, marginal revenues, and profits

The article focuses on harmful economic effects, but also mentions some positive aspects. What are they? Does moral hazard apply to unions? Why or why not?


In a work environment, the Employers and the workers have varied approaches. This is resorted on a common platform with the help of Labour Unions.
Labour Unions help in negotiating with the corporations, businesses and other organizations on behalf of union members. They are the representatives of the workers & help them to achieve their rights. They also ensure improvements in the working conditions and wages..
The labour Unions widely affect the Labor Environment as they influence the two major tools of demand, supply & equilibrium wage rate of labor. They are:
 Restricting the labor supply
 Increasing the labor demand
The equilibrium wage rate can be defined as the wage rate at which the demand for labour is exactly equal to the supply rate of labour.
Thus, The Unions demand for a higher wage than the equilibrium wage rate. This is however responded by the employers who in turn lower the hours of work.

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