hically illustrate (using the WS and PS relations) and explain the effects of an increase in the minimum wage on the equilibrium real wage and the natural rate of unemployment.
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Graphically illustrate (using the WS and PS relations) and explain the effects of an increase in the minimum wage on the equilibrium real wage and the natural rate of
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- Suppose that all other factors affecting the labor market remain constant. Graphically illustrate and explain what is the effect of an increase in unemployment benefits on the equilibrium levels of real wage and unemployment. (Hint: In your graph, put the real wage on the vertical axis, and the level of unemployment on the horizontal axis. Use wage-setting relation and price-setting relation to analyze the question.) Upload your results by taking a photo / scan of your answer.Using the WS and PS relations, graphically illustrate and explain the effects of an increase in the minimum wage on the equilibrium real wage and the natural rate of unemployment.Also explain what types of policies could be implemented to bring the natural rate of unemployment to the initial level.Assume that there is a discovery of new accessible iron ore deposits off the coast of Newfoundlanc and Labrador and that because of this discovery, people from British Columbia migrate to Newfoundland and Labrador in search for higher paying jobs. What would be the impact on the equilibrium level of real wages and employment in the iron ore sector in Newfoundland and Labrador? Assume that we do not know the magnitude of any changes. the equilibrium real wage rate will decrease but the equilibrium level of employment will increase. 0.the equilibrium level of employment will increase but the change in the real wage rate is unknown. 0.the equilibrium real wage rate will increase but the change in the equilibrium level of employment is unknown. 0.the equilibrium real wage rate will decrease but the change in the equilibrium level of employment is unknown. 0.the equilibrium real wage rate and the equilibrium level of employment will increase.
- While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graphEvaluate the claim that “recessions are caused by high job separation rates” ([Hint: Think about the movements in market tightness, unemployment, and vacancies and their cross-correlation when the job separation increases. Are the implications consistent with the empirical Beveridge curve ?]Show each of the following in your graph. Assume that the economy of your graph's country has an actual unemployment rate that is less than the natural unemployment rate.
- The labour market in an economy is characterised by the following equations: Wage setting: Price setting: W p² W Р = 0.9-0.5u = 1 1+µ -A In which W is nominal wages, pe and P are expected nominal prices and nominal prices, respectively, u is level of unemployment. µ is the price mark-up and λ is the marginal product of labour. Assume μ = 0.3 and λ = 1.1 Considering this information, which of the following statements are CORRECT: Improvement in working conditions will have no effects in the equilibrium level of unemployment in this economy. If this economy's actual output is below its potential output, there is pressure for real wages to decrease below 0.85 (i.e., W<0.85). If price marginal product of labour decreases to 1, the equilibrium real wage in this economy will decrease. A positive demand shock will change the equilibrium variables in this economy.Suppose the marginal product of labor in the economy is given by MPN = 200 – 0.5N, while the supply of labor is 100 + 4w Find the market-clearing real wage rate What happens if the government imposes a minimum wage of 40? Is there involuntary unemployment? What happens if the government imposes a minimum wage of 60? Is there involuntary unemployment?Assume the following for the town of Boone: The town has a total population of 60,000 people, of which 2,000 are under 16 years of age or are institutionalized; 4,000 are full-time students who are not employed and are not seeking work; and 50,000 are employed. The rest of the people are out of work but have been actively seeking work within the past four weeks. What is the unemployment rate in Boone? Instructions: Round your answer to 1 decimal place. percent
- Suppose that a country experiences a reduction in productivity – that is, an adverse shock to the production function.A) What happens to the labor demand curve? Show the change on the graph.B) How would this change in productivity affect the unemployment rate if the labor market is always in equilibrium?Explain your answer referring to the graph.Suppose that a consulting firm has generated the following information about the economy of Growville: (i) The current employment in export industries is 50,000; (ii) The current total employment in the city is 150,000; (iii) Export employment is expected to grow by 10,000 jobs. a. Is there enough information to accurately predict the effect of the increase in export employment on total employment? b. If you have enough information, predict the employment effect and illustrate your answer with a graph. c. If there is insufficient information, proceed with the analysis as far as you can and list the additional information you need to complete the analysis. Illustrate your answer with a graph.Interpret the change you drew on the previous graph by filling in the blanks in the following paragraph: The higher-than-expected price level causes firms to earn_____profit than they expected on each unit of output they produce, and, therefore, they_____their production level. At the same time, the real value of wages and other resource prices is_____than workers and firms expected when they signed long-term contracts. As a result, the economy as a whole produces at a level______its full-employment output, and the unemployment rate is_____than its natural rate. Now, suppose prices remain higher than expected. As a result, in the next round of labor negotiations, unions demand and obtain higher wages for their members. The following graph shows the long-run aggregate supply curve (LRASLRAS) at full-employment output for this economy as well as the same initial short-run aggregate supply curve as in the first graph. Shift one or both of these lines to illustrate how the economy…
