[aggieben]

makes sense to me, and it seems right by set-theory too. Take this all with a grain of salt, though, because it's been a while since I was taught set-theory, but here's my stab at it:

there is an intersection between '(a a) and '(a b); the element 'a. Thus, the union would be the set of things inside the intersection --- 'a --- and the parts outside it --- 'b.

With the second union, there is no intersection, so the union is merely the set of things not in the intersection, which is the original sets, resulting in '(a a b). There is no relation defined in the union operation between those things not in the intersection, so they remain in the union set.