Consider an economy with the Cobb-Douglas production function: Y = 3K0.2L0.8 K = 140000; L=8000 Round answers to two places after the decimal when necessary. . Now suppose that Congress, concerned about the welfare of the working class, passes a law setting a minimum wage that is 9 percent above the current equilibrium wage. Assuming that Congress cannot dictate how many workers are hired at the nandated wage, calculate what happens to the real wage, employment, output, and the total amount earned by workers. Real wages = $ Total output = d. Does Congress succeed in its goal of helping the working class? O Yes, Congress does succeed in its goal of helping the working class. units No, Congress does not succeed in its goal of helping the working class. Employment = Total earned by workers = $ workers e. Does this analysis provide a good way of thinking about a minimum-wage law? O No, this analysis does not provide a good way of thinking about a minimum-wage law. Yes, this analysis does provide a good way of thinking about a minimum-wage law.

Consider an economy with the Cobb-Douglas production function: Y = 3K0.2L0.8 K = 140000; L=8000 Round answers to two places after the decimal when necessary. . Now suppose that Congress, concerned about the welfare of the working class, passes a law setting a minimum wage that is 9 percent above the current equilibrium wage. Assuming that Congress cannot dictate how many workers are hired at the nandated wage, calculate what happens to the real wage, employment, output, and the total amount earned by workers. Real wages = $ Total output = d. Does Congress succeed in its goal of helping the working class? O Yes, Congress does succeed in its goal of helping the working class. units No, Congress does not succeed in its goal of helping the working class. Employment = Total earned by workers = $ workers e. Does this analysis provide a good way of thinking about a minimum-wage law? O No, this analysis does not provide a good way of thinking about a minimum-wage law. Yes, this analysis does provide a good way of thinking about a minimum-wage law.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

What happens to a supply curve when price changes but structural variables remain fixed? Provide an economic interpretation of this case.
Consider a two-sector economy that employs a total of 105 units of a single input, labor. Ny of these units are allocated to sector 1, where the wage is 90 for the top five workers in that sector and zero for all others. (Both the wage for the top workers and the number who receive that wage are invariant to changes in Ng) The remaining N2= 105 - Ngunits of labor serve in sector 2, where every worker receives a wage of 10. All workers in sector 1 have an equal probability of being among the top five workers, 6/Ng. and all workers are risk neutral. Instructions: Round your answers to the nearest whole number. a. How many workers will work in sector 1? N1 = b. What will be the value of GNP for the economy? GNP = c. How would your answers differ if there were a 50% tax on the earnings of workers in sector 1? Workers in sector 1: GNP:
do fast .
Q1). Suppose the labor market is initially at its equilibrium, i.e., the labor supplied equals the labor demanded. Now suppose IBM develops a new computer chip that makes computer incredibly faster. Explain and show graphically how the arrival of a new, more productive technology affects the labor market. Draw the full graph and provide a detailed explanation of the effect. Label the axes/curves, explain why either the aggregate labor demand curve or the aggregate labor supply curve shifts and describe the economic mechanism that moves the economy from the old to the new equilibrium.
What are the causes of inflexible or sticky wages
Show the likely effects on price- and/or wage- setting behaviour as reflected in the WS/PS diagram of the following: (a) workers become more worried about losing their jobs at any given level of employment (b) the government intervenes to protect domestic firms from foreign competition (c) higher social security contributions paid by employers (d) a reduction in the proportion of employees covered by union wage agreements (e.g. as the result of a decline in industries in the economy that are heavily unionized)
QUESTION 1 For the production function Q= KO.4L0.6 and the budget 138 = 3K + 5L find the change in the optimal employment of L after wages change by a factor of 1.3. Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 = 1.2, 1.14 = 1.1).
Assume that the labour demand equation for a fictional country is L = 90 – 2(w), where w is the wage per hour worked. Also, assume that the labour supply equation for that country is Ls = 0.5(w). Instructions: Round your answers to the nearest whole number. a. The equilibrium wage is $ , and the equilibrium quantity of labour employed is workers. b. At the equilibrium wage, | people are unemployed. c. If the supply of workers increased, the number of unemployed would: O stay the same as long as the wage is free to quickly adjust. O decrease. O increase.
The diagram on the right shows a perfectly competitive labour market. The initial equilibrium is with wage w* and employment L*. a. Suppose the demand for labour decreases to D'L. If wages are perfectly flexible, what is the effect on the wages and employment? If wages are perfectly flexible, wages will decrease decrease and employment will Use the point drawing tool to plot the new equilibrium point. Carefully follow the instructions above, and only draw the required object. Real Wage Part a Employment OU
Full answer to question a and b
Explain why employers pay a lower efficiency wage when unemployment is high. How would the efficiency wage change in an economy if it became easier to monitor the work that employees did? Other than to incentivise workers to put in effort, can you think of any other reasons why wages might be higher when unemployment is low (i.e. an upward-sloping wage-setting curve)?
Consider an economy which is divided into different sectors, each producing a differentiated product. Workers in each sector are organized in a trade union which monopolizes the supply of labour to all firms in the sector. Because of its monopoly position, the trade union in each sector may dictate the nominal wage rate to be paid by employers in that sector. However, employers are free to choose the level of employment. For simplicity, assume that the number of working hours for the individual worker is fixed, so total labour input is proportional to the number of workers employed. Workers in sector are educated and trained to work in that particular sector, so they cannot move to another sector to look for a job. If a worker fails to find a job in his sector, he therefore becomes unemployed. His real income will then be equal to the real rate of unemployment benefit . An employed worker in sector earns the real wage where is an index of the general price level, so his net income…