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?