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Study Sheet for the Final Exam

Economics 151A
1. Labor Union History
a. Know general order of legislation
b. Know details and implications of both Wagner Act and Taft-Hartley Act
Wagner Act: power to the unions
o Firms cannot interfere with collective bargaining or self-organization
o Firms cannot encourage or discourage union membership
o Firms cannot discriminate against an employee for filing charges under the
act
o Firms cannot refuse to bargain collectively
2. Labor Unions
a. Know how to model the decision to join a union
Joining a union provides an increase in wage and a decline in employment
The individual will decide to join a union if the decrease in hours worked is
compensated by an increase in wage.

If L* to L1, individual will join the union (higher utility)


If L* to L2, individual will not join the union (lower utility)

b.

c.
d.

Know the factors influencing the supply of union jobs


Costs of organizing the workforce (establishing the union)
Legal environment
Managements resistance
Amount of excess rents that can be captured from the firm
Know the factors influencing the demand for union jobs
Know the characteristics of individuals or jobs most likely to be unionized
Public sector union participation = 35.2%
Private sector union participation = 6.7%

e. Farber (1990), why have we seen a decline in union participation since the 70s.

f. Know the model of monopoly unionism and the implications of the elasticity of
the firms demand curve on the utility of the unions

g. Be able to calculate the number of people hired and the equilibrium wage if there
were a monopoly union and no bargaining.

h. Be able to calculate the deadweight loss of unions in the 2 sector model presented
in class