Problem
Consider an economy with two labor markets, neither of which is unionized. Now suppose a union is established in one market.
a. Show the effect of the union on the market in which it is formed. In what sense is the quantity of labor employed in this market an inefficient quantity?
b. Show the effect of the union on the non unionized market. What happens to the equilibrium wage in this market?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.