In the light of the Great Depression, most advanced economies adopted policies after the Second World War that strengthened the bargaining power of employees and labour unions. Initially, inclusive trade unions only asked for wage increases in line with productivity increases. By contrast, after the golden age, the policies chosen weakened workers’ bargaining power. a)Define the concept of an inclusive trade union and explain how it can help restrict upward shifts of the WS curve.  b) Show (and explain), using the labour market model, how the end of the Golden Age and the collapse of the Post-war Accords affected the WS and PS curves.

In a country called Uncle Sam Land (USL), the labor demand curve is given by: W = K - 4L Where W is the wage rate, K is a variable determined by accumulated capital stock in the country, and L is the labor force in the country. K = 500 is supplied by the capitalists in USL. Next to USL, is Aunt Lewis Land (ALL). ALL is poor and has a Dual Economy. A large numbers of workers in the agricultural sector there are not productive - they are disguised unemployed. They are looking for jobs. Wage in ALL is institutionally fixed at W = 10. Although USL had built a strong impenetrable border wall to prevent ALL migrants from moving in, a firm in USL, called "Coyote International," was able to fly over the impenetrable wall in a helicopter and bring job seekers from ALL who wanted to migrate to USL. As a result of this, USL labor force increases to 110 (L = 110 now). All workers work no matter what the wage is. What is the new national income in USL after migration takes place? O 6242 45000…

Economics Modify the Lewis model and assume that there is a strictly positive marginal product of labor in the traditional sector. Use figures with production functions in the traditional and the modern sectors to show what the equilibrium is when no one wants to move away from agriculture. What assumptions do you have to make about production functions to arrive at the conclusion that fewer people will end up in agriculture? Use the same starting point as in the above question. Derive the demand for labor in the traditional and in the modern sectors. Show graphically what the characteristics of the equilibrium would look like when no one wants to change sectors.

Assume that the economy is in a recession and demand for labor is falling. Assume that wages are sticky.  Draw a supply and demand graph that represents the labor market.  Draw a graph that depicts what has happened to our demand and supply curves in the labor market, including our new equilibrium price and quantity of labor. Will the market experience an increase or a decrease in unemployment? Make sure you clearly label your graph, all of its components, and any curve shifts are clearly marked with the beginning and ending curves (you can use 0 and 1 or 1 and 2 to designate the first and the second curves).