The Brotherhood of Meat Packers (a union of workers whose job
it is to cut up and package freshly killed beef, chicken, lamb
and pork) are awarded a new contract that raises wages in the
industry by 25 percent. Since only a third of the economy is
unionized, this will
1. increase the number of workers employed in
industries other than meat packing.
2. increase the amount of unemployment in the
economy as a whole in the long run.
3. both of the above.
4. none of the above.
Choose the option that yields the correct answer.