Suppose there are 108 workers in the economy, with overall labour supply LS-108. The labour demand in Sector A is given by LDA=111-1.9WA and labour demand in Sector B is given by Lºg=108-3.6w8- When graphed with the conventional axes, the slope of the aggregate labour demand curve is and its vertical intercept is . Assuming the neoclassical model of perfect competition holds, the competitive wage would be w=$ Suppose sector A unionizes and sets the wage at $30. Sector A will employ A who will spill over into sector B is equal to .There will now be workers. The number of workers previously employed in sector workers employed in sector B. The wage in % and the counterfactual wage is $ sector B will be equal to $ In this economy the union density is If the contract curve is vertical when the wage is set at $30, workers will spill over into sector B and the wage in sector B will be wg=$ If the contract curve is not vertical, but 9 workers decide to wait in unemployment in sector A, the wage in sector B will be wg=$

Suppose there are 108 workers in the economy, with overall labour supply LS-108. The labour demand in Sector A is given by LDA=111-1.9WA and labour demand in Sector B is given by Lºg=108-3.6w8- When graphed with the conventional axes, the slope of the aggregate labour demand curve is and its vertical intercept is . Assuming the neoclassical model of perfect competition holds, the competitive wage would be w=$ Suppose sector A unionizes and sets the wage at $30. Sector A will employ A who will spill over into sector B is equal to .There will now be workers. The number of workers previously employed in sector workers employed in sector B. The wage in % and the counterfactual wage is $ sector B will be equal to $ In this economy the union density is If the contract curve is vertical when the wage is set at $30, workers will spill over into sector B and the wage in sector B will be wg=$ If the contract curve is not vertical, but 9 workers decide to wait in unemployment in sector A, the wage in sector B will be wg=$

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.12P

See similar textbooks

Similar questions

Suppose an economy has the following production function: Y = AK L where A = 10, K 50, and L= 100. The current nominal wage is $20 and the price level of output is $4. Based on the theory of distribution, firms should O hire new workers to increase profits. O fire some current workers to reduce losses. O keep the number of workers at the current level. O the firms labor decision cannot be determined.
Describe the neoclassical model of labor -leisure choice model by emphasizing the objective function, constraint and optimality conditions?
If the production function for GDP is Cobb-Douglas in labour and capital, with the exponent on capital is a space equals space 1 third, and assuming constant returns to scale, and a perfectly competitive goods market a. The marginal product of labour (vertical axis) will have a positive, concave slope when plotted against labour (horizontal axis) b. In equlibrium, wage will equal 2 over 3 y, where y is output per worker c. Labour and capital are complements so the derivative fraction numerator d squared Y over denominator d L d K end fraction less than 0 d. None of the answers is correct e. The marginal product of labour is: left parenthesis 1 minus a right parenthesis A open parentheses Lover K close parentheses to the power of a
Consider an economy with production function given by Y = AK0:5L0:5 where A is the total factorproductivity (TFP), K is the capital stock and L is the labor input. For simplicity assume capital is xed and equal to 1. Assume A=100.a. Write the rm's problem of choosing labor demand. Derive the demand for labor as a functionof the real wage.b. Assume labor supply is inelastic and xed at L= 100. Find the equilibrium values of the wageand the employment level for this economy. Display graphically the labor supply and the labordemand curves. Carefully label your graph.c. Suppose the economy faces a positive productivity shock and TFP is now A=200. Displaygraphically the new labor demand function. What are the equilibrium values of employment andthe real wage?d. Compute the total output when A=100 and when A=200. What is the output's growth rate?Compare that growth rate with the growth rate in A. How does the growth rate of output percapita compares to the growth rate in A? Explain…
explain the elasticities of production function for a neoclassical production function with the help of graph
The labour market in an economy is characterised by the following equations: W = 0.7-0.9u ре Wage setting: W = 0.5 P Price setting: In which W is nominal wages, pe and P are expected nominal prices and nominal prices, respectively, u is level of unemployment. Consider a linear production function for firms such that Q = N, i.e., production for firms (Q) depends only on the number of employees (N). Considering this information, which of the following statements are CORRECT: U The price mark-up (u) for this economy is 1 (i.e. µ = 1). O If actual output is below potential output, actual unemployment rate is below 0.22, (i.e. uț < 0.22). The equilibrium unemployment in this economy is 0.22 (i.e. ue = 0.22). U If wage setters become less responsive to changes in unemployment (e.g., from -0.9 to -0.7), the equilibrium unemployment decreases.
hy does a measure of labor productivity—the output produced per worker– rise for many firms during recessions? During the boom years period of 2005through November 2007, the annual average output per worker was lower in U.S.manufacturing than during the Great Recession of 2007–2009 as well during therelatively low-demand years since then through 2013.Firms produce less output during recessions as demand for their products falls.Consequently, firms typically lay off workers during recessions. Thus, whetheroutput per worker rises or falls depends on whether output or employment fallsby more. The labor productivity pattern over the business cycle differs across in-dustries. If we know about a firm’s production process, can we predict whetheroutput produced per worker will rise or fall with each additional layoff?
In a consumption-leisure model, where P is the price of consumption and w is the wageand h is the hours, how do I mathematically calculate the effect of wage jncrease (wage/price of good) on the ff: >consumption>leisure>hours worked How do I know which is stronger between income effect and substitution effect due to increase in w/p? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
In the context of a perfectly competitive model of the labour market, an increase in technologythat raises the marginal product of labour at any given level of employment would be expected, inequilibrium, toa) reduce the amount of labour required to produce a given amount of output and hence increaseunemployment.b) shift the labour demand curve outwards and lead to an increase in employment and wages.c) have no effect upon labour supply or labour demand curves and hence have no impact onemployment or wages.d) reduce the supply of labour to the market and result in an increase in wages but a fall inemployment Why the correct answer is B?
Why does modeling production as convex in inputs probably make sense in the real world?
i Suppose that the economic model is wage = Bo+B₁exper+B₂exper² + ε. In the terminology of this class, is this a linear model? ii Suppose that the economic model is wage = 80+ experi Bo In the terminology of this class, is this a linear model? + E.
The production function is assumed to be Y=N. Let z represent all other factors that affect the wage determination.(1) Suppose that the equilibrium real wage increases from 0.75 to 0.8. This implies that the mark-up changes from _______ to _______, holding z constant. (2) How will the change in markup affect the natural rate of unemployment and natural level of output Answers for this two immediately please