LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 3, Problem 9P
(a)
To determine
Identified the equilibrium wage, employment, and
(b)
To determine
Identify the number of workers who would lose their jobs, number of workers added to the jobs at the minimum hourly wage, and the unemployment rate.
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In a particular industry, labor supply is ES = 10 + w and labor demand is ED = 40 - 4w, where E is the level of employment and w is the hourly wage. a. What are the equilibrium wage and employment if the labor market is competitive? What is the unemployment rate? b. Suppose the government sets a minimum hourly wage of $8. How many workers would lose their jobs? How many additional workers would want a job at the minimum wage? What is the unemployment rate?
In a particular industry, labor supply is ES = 10 + w and labor demand is ED = 40 - 4w,where E is the level of employment and w is the hourly wage.(a) What is the equilibrium wage and employment if the labor market is competitive?
In a particular industry, labor supply is ES = 10 + w and labor demand is ED = 40 -4w,where E is the level of employment and w is the hourly wage.(a) What is the equilibrium wage.
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- Which of the following is not correct? In a labor market, the wage adjusts to balance the supply and demand for labor. A profit-maximizing firm hires workers so long as the wage rate exceeds the value of the marginal product of labor. Any event that changes the supply or demand for labor must change the equilibrium wage. Any event that changes the supply or demand for labor must change the value of the marginal product.arrow_forwardWhich of the following is likely to shift the labor supply curve to the right, assuming all else equal? A rise in the wage rate A fall in the wage rate A rise in the immigration of workers in search of better work opportunities A fall in the population of a country due to a natural disasterarrow_forward(1) If the demand for product Y increases significantly, then A- the demand for the labor used to make Y decreases. B-the quantity of labor supplied to produce Y will decrease. C-the supply of labor to produce Y will increase. D-only the quantity demanded of labor increases E-the demand for the labor used to make Y increases (2)If the wage in a perfectly competitive labor market is $15 and the marginal product of the last worker employed is 3 units, what must be the market price for the good being produced? Assume a perfectly competitive output market. A- $5. B-$12. C-$15. D-$18. E-$45arrow_forward
- Suppose that Congress passes a law which requires employers to provide employees some healthcare benefits that raises the cost to the employers by $5 per hour. a) What is the impact on the demand for labor? (Think quantitatively) b) If the employees value the benefit exactly equal to the cost, what will be the impact on the supply of labor? c) How will the law affect the wage and level of employment? Are the employers better off or worse off? Are the employees better off or worse off? d) Suppose before the implementation of the law, the wage in the market was $3 above the minimum wage. In this case, how the law will affect the wage and level of employment?arrow_forwardHow would I analyze how the equilibrium wage and number of working hours will change when a company has a great demand for workers (i.e. grocery stores now) yet some current workers don't want to work as many hours? How would I explain the three cases that would depend on the relative size of change in labor demand and labor supply? For example. Case 1. Change in supply(∆LS)| = |Change in Demand(∆LD )| . Case 2: |∆LS| > |∆LD| . Case 3: |∆LS| < |∆LD| I'm trying to understand how the equilibrium wage and number of working hours will change under these different scenarios. Thanksarrow_forwardThe market for plumbers in Boston is currently in equilibrium. Labor supply is given by Ls = 3 x W and labor demand is given by Ld = 45 - W (where L = quantity of workers, Ls quantity of workers supplied, Ld = quantity of workers demanded, and W = wage). The plumbers have just unionized and have negotiated a wage of $25 for all plumbers in Boston. How many plumbers do you expect to be unemployed as the result of this change? Please round your answer to the nearest integer. %3D %3D %3Darrow_forward
- In a competitive labor market, employers will not pay less than the market wage because at a wage below the equilibrium A) the equilibrium wage would rise B) they would not be able to hire anyone C) there would be a surplus of workers D) they would be inundated with excess workersarrow_forwardDescribe what happens to quantity of labor supplied when wages are at the equilibrium level, above equilibrium, and below equilibrium.arrow_forward
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