Answered: A proposal that is attracting…

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter4: Demand And Demand: Applications And Extensions

Section: Chapter Questions

Problem 12CQ

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Question

A proposal that is attracting increasing attention is a requirement that employers provide their
workers with paid sick leave. This problem asks you to analyze the effects of such a policy on wages and
employment in normal times.
a. How, if at all, would such a policy affect labor demand? (explain using MRP)
b. How, if at all, would it affect labor supply? (explain using willingness to work)
c. How, if at all, would the policy affect normal employment and the normal real wage (or is it
not possible to tell)?

include graphs

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