Empirical studies suggest that the efficiency loss associated with the misallocation of labor caused by the union wage advantage is:

A) $6 billion per year.
B) about 2 percent of domestic output.
C) less than one-half of 1 percent of domestic output.
D) about 4 percent of domestic output.

Union Wage Advantage

The higher wages earned by unionized workers compared to their non-union counterparts due to collective bargaining.

Misallocation

The inefficient distribution of resources, often leading to missed opportunities or wasted potential.

Labor

Labor refers to the human effort, both physical and mental, used in the production of goods and services.