Describe each actor in the market (i.e. what assumptions are made about them; what side of the market do they give us; relationship between employment and wages, etc.).

PLCY 310 Problem Set 2 SSII Extra credit (5 points) Use these graphs to answer the following: weekly $'s consumption wage 25 20 wage- 25 wage- 20 5 10 15 20 25 30 35 40 45 50 55 60 week hrs of leisure B labor supply curve SE WE 5 10 15 20 25 30 35 40 45 50 55 60 week hrs of labor a) Analyze what is happening on the first graph (use slide 9 Chapter 9 as guide), go over the price change, the income and substitution effects, and the total effect. (3 points) b) Explain the bottom graph, what does it tell us? (1 point) c) Draw a leisure demand curve with wages on the y-axis and weekly leisure hours on the x-axis using the information in this graph. (1 point)

Economics: Labor Economics Question: 1 Migration is expected to occur if movement between two markets is frictionless unless: A. Value of Marginal Product (VMPe) is equal in both markets B. Their populations are equal C. They have the same labor demand function D. Total gains from trade are equal across both markets   Question: 2 The market wage increases by 8%. In response the firm reduces its employment by 5%. What is the elasticity of labor demand? Show your work. Is the demand for labor elastic or inelastic? What do you think will happen to this coefficient in the long run?   Thank you for your support and help Training Agent!

2. Graphing demand for labor and computing the optimal quantity of labor demanded A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $270 per day for each worker it hires. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Labor Output (Units of output) Marginal Product of Labor (Units of output) Value of the Marginal Product of Labor (Dollars) (Number of workers) 0 0 20 1 20 19 2 39 18 3 57 15 4 72 12 5 84 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show 00000