Scenario 1 Suppose the marginal product of labor in the economy is given by MPN-200-0.5N, while the supply of labor is 300+8w Refer to Scenario 1. What is the market clearing real wage? Ow=5 Ow-11 Ow-10 w-15

Tools Table Window Help Problem Set 3-edited - Saved to my Mac ences Mailings Review View O Tell me 三 AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe 三v Normal Body Text List Paragraph No Spacing AGEC 317-203/503 Problem Set 3 Due at 11:59pm on Nov 2nd Please show all your work to obtain credit for this homework 1. Consider the following simple model of hourly wage model: wage = 20 – 2 female + 2· educ – female · educ where wage is measured in dollars per hour, educ is years of education, female is a gender dummy variable, where female = 1 if the observation is female female = 0 if the observation is male Plot between the relationship between wage and educ for female and male based on this model. Be sure to label the graph, including intercept and slope values as well as the lines for male and female. es) 2 Focus stv MooR eok Dre

Describe the effects of a rightward shift in labor demand on labor market equilibrium: Decrease equilibrium wage, decrease equilibrium employment Increase equilibrium wage, increase equilibrium employment Increase equilibrium wage, decrease equilibrium employment Decrease equilibrium wage, increase equilibrium employment S ដុះ F2 I WE A 30 F3 JAN 16 D $ 888 R F % 5 tv A MacBook Air 7 F7 2 8 √XCVB N 0 K

Nadira, the owner of Company ND is contemplating to keep her shop open after 4pm and until midnight. In order to do so, she would have to hire additional workers. She estimates that the additional workers would generate the following of total output (where each unit of output refers to 100 pages duplicated). Workers Hired 0 1 2 3 4 5 6 Total Product 0 12 22 30 36 40 42                                                                                                                                                         Calculate the following if the price of each unit of output is RM10 and each worker hired must be paid RM40 per day: How many workers should Nadira hire? At which point did the law of diminishing returns occur?

Wage ($) 12 NA9%E5 10 8 6 4 2 Desired Employment 0 5 10 15 20 25 a. Draw the labor demand curve b. Write the equation for the labor demand curve where wages are a function of employment levels c. Write the equation of the dead curve where employment is a function of wages.

WAGE W₂ W₂ Figure 18-5 Refer to Figure 18-5. Which of the following would shift the labor supply curve from S₁ to S₂? O a. a decrease in the price of the firm's output O b. technological progress O c. a change in workers' attitudes toward the work-leisure tradeoff in favor of work O d. an increase in the price of the firm's output LABOR S₁ S₂ Demand

11. Describe what happens to quantity of labor supplied when wages are at the equilibrium level, above equilibrium, and below equilibrium.

13. Identify which way the labor supply curve would shift under the following scenarios. A country experiences a huge influx of immigrants who are skilled in the textile industry. Wages increase in an industry that requires similar job skills. New machines require additional maintenance over time, so that the marginal productivity of labor rises.

Problem 2 Let's assume you’ve found the following labor demand and supply curves: Lp 30 – w Ls = 2w (a) Solve for the equilibrium wage and employment level. (b) Graph the demand and supply curves. (c) At this equilibrium, what is your welfare/gains from trade? (d) Now, assume a minimum wage has been implemented at $20. How will this impact your demand? Supply? (e) How many workers are displaced by this new policy? How much “extra" unemployment occurs with this new policy? Hint: Think about the reservation wage. (f) Graph the new labor demand and supply with this minimum wage. (g) At this equilibrium, what is your new welfare? Are you better off with this change? Explain.

In the 1970s Sweden adopted several new labour market policies affecting layoffs. Three were notable: (1) Plants that provided in-plant training instead of laying of workers in a recession received subsidies. (2) All workers had to be given at least one month's notice before being laid off, and the required time in he average plant was two to three months. (3) Laid-off workers had to be given first option on new jobs with the former employer.. What probable effects would these policies have on unemployment? government