ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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| Real Wage | Number of Workers |
Labor Force Participation Rate |
| 60 | 120,000,000 | 30% |
| 70 | 110,000,000 | 35% |
| 80 | 100,000,000 | 40% |
| 90 | 90,000,000 | 45% |
| 100 | 80,000,000 | 50% |
| 110 | 70,000,000 | 55% |
| 120 | 60,000,000 | 60% |
| 130 | 50,000,000 | 65% |
| 140 | 40,000,000 | 70% |
| 150 | 30,000,000 | 75% |
| 160 | 20,000,000 | 80% |
| 170 | 10,000,000 | 85% |
Ignore everything that happened in the previous questions.
We know that supply of labor can increase either because of an increase in labor force participation rate or an increase in civilian population. We saw the effect of the former above. This question is about the latter.
The table above shows some pieces of information about the labor market condition in a country. It shows the number of workers demanded in the country at different levels of real wage. It also shows the labor force participation rates at those real wage levels. For example, if the real wage is 60, only 30% of the civilian population will participate in the labor force. If the real wage is 170, some 85% will participate in the labor force. The general price level in this country is P = 100. The civilian population in this country is 100 million persons. Assume that wages and prices are fully flexible upwards and downwards in the long run.
Suppose that over time civilian population in this country increases by 60 million persons through migration and/or birth. The participation rates remain unchanged.
As a result, the equilibrium real wage will equal ....
and the equilibrium employment will equal....
persons.
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