What reasons do Arnold and Bowie give for doubting Maitland’s claim that improving employee wages will inevitably lead to more unemployment and poverty?
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What reasons do Arnold and Bowie give for doubting Maitland’s claim that improving employee wages will inevitably lead to more
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- Why or how can you explain Card and Krueger's findings? i.e. that an increase in the minimum wage did not increase unemployment.Why do efficiency wages generate involuntary unemployment? What factors prevent the market from clearing in efficiency wage models?Historically, employers have tended to lay-off workers during economic downturns. According to a survey conducted by Yale economist Truman Bewley, which of the following help to explain this phenomenon? Check all that apply. Employers believe that they are not legally able to reduce wages. Even during severe recessions, most workers are able to keep their jobs, and so would rather see a few of their fellow workers laid off than take a pay cut themselves. Employers are fearful of renegotiating contracts because of threats from union officials. What is the major policy implication of this phenomenon? When the economy is experiencing a contraction, it causes the aggregate supply curve to shift to the right, returning the economy to potential output on its own. When the economy is experiencing a contraction, it tends to require an increase in aggregate demand to return to potential output. Long-term contracts limit wage flexibility, and most economists agree that they are therefore…
- 11. Problems and Applications Q13 Suppose that Parliament passes a law requiring employers to provide employees some benefit (such as dental care) that raises the cost of an employee by $4 per hour. Assume that firms were not providing such benefits prior to the legislation. On the following graph, use the green line (triangle symbol) to show the effect this employer mandate has on the demand for labour. Wage (Dollars per hour) 20 18 16 14 12 10 8 4 2 0 Demand + 0 1 + 2 3 4 5 6 7 Quantity of Labour 8 Supply 9 10 New Demand New Supply Equilibrium Before Law Suppose employees place a value on this benefit exactly equal to its cost. Equilibrium After Law (?)When unemployment exists in the supply and demand labor market model, there is an adjustment that brings the model back into equilibrium—back to full employment. Orthodox economists cite two mechanisms that cause the adjustment. Explain each of these.Need help ASAP, will give thumbs up: Consider an empirical wage equation of the form: log(W) = a + b(EDUC) + c(EXP) + d(EXPSQ) + u where the components are defined as: W = hourly wage rate log() is natural logarithmic function EDUC = completed years of school EXP = work experience EXPSQ = years of work experience squared (i.e. EXP times EXP) u = unobservable determinants of the hourly wage rate With data on the relevant variables for a sample of workers, the parameters a, b, c, and d can be estimated. QUESTION: What does human capital theory predict about the parameters of this wage equation? ANSWER CHOICES: b>0, c>0, d>0 b>0, c>0, d<0 b>0, c<0, d>0 b<0, c>0, d<0 b<0, c<0, d>0 Answer
- Explain your answer comprehensively about the question stated below: Suppose Congress were to mandate that all employers had to offer their employees a life insurance policy worth at least $50,000. Use Economic Theory and concepts, both positively and normatively, to analyze the effects of this mandate on employee well-being. What effect does this mandate have on the demand for labor? Use also curve to demonstrate the answer.Give three of explanations for how efficiency wages might work.Proponents of the minimum wage argue that it will not reduce employment. Opponents argue the opposite. What factor determines who is correct in this debate, and under what condition will each side be correct? Use a diagram to explain your answer. Proponents of the minimum wage argue that it will not cause unemployment. Opponents argue the opposite. What two factors determines who is correct in this debate, and under what conditions will each side be correct? Use a diagram to explain your answer. Proponents of the minimum wage argue that it will not create deadweight loss. Opponents argue the opposite. Under what condition will each side be correct. In light of this, what do you conclude are the likely effects of a minimum wage?
- Which of the following statements is false? Unions can have sufficient bargaining power to push wages above competitive market levels. Sticky wage theories cannot explain frictional unemployment. The search and matching model is an example of a sticky wage theory. None of the above statements are false.Proponents of the minimum wage have asked you to provide a summary of the impact of minimum wages in an alternative model, the model of labor search and bargaining. Specifically, they want you to explain why in this model it is possible for a minimum wage to raise workers' wages without causing any unemployment. Which of the following statements most accurately does so? The model of labor search and bargaining cannot explain this fact Part of the cost of hiring a worker is the cost of their healthcare and other benefits. A minimum wage causes firms to reduce healthcare payments rather than firing workers. O Many workers are offered wages far below the neoclassical equilibrium wage. A minimum wage close to the equilibrium would raise these workers wages without costing any jobs. Firms are unable to coordinate on a wage and would benefit from a single, government-set wage (like the minimum wage) O Workers generally do not want to work, but setting a high minimum wage would entice them…If there are N identical workers in the economy, each with the (inverse) labor supply of w=3h+10. The market (inverse) labor supply is w=0.01h+10. What is N?