Author Question: The expansion of Social Security in 1956 added _____. a. cash benefits to surviving dependents ... (Read 81 times)

nramada · **on:** Jul 1, 2018

The expansion of Social Security in 1956 added _____.

a. cash benefits to surviving dependents
b. disability insurance to those in the program
c. medical benefits to those over 65
d. medical benefits to surviving dependents

Question 2

Unions have generally been far more successful in organizing and raising wages in skilled trades such as carpentry than in unskilled trades. Use the laws of derived demand to explain why.

What will be an ideal response?

jaaaaaaa · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

b

Answer to Question 2

There are at least two reasons. One is that the elasticity of substitution between skilled workers and other factors of production is low; thus firms cannot substitute some other factor of production if wages rise. Secondly, skilled labor is likely to be a relatively small percentage of total costs, and thus raising wages does not cause a large increase in total costs (which would lead to a reduction in supply, an increase in price, and a decrease in output). Unskilled labor has more substitutes and is likely to be a larger share of costs for firms that employ it, and thus if unions raise wages, firms employ other factors of production, and many workers will be laid off.