After an unexpected in the price of oil, the long-run adjustment decreases the price level and the unemployment rate as they return to their original levels.
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- Which is more costly, the short-run adjustment between Monday and Tuesday or a long-run adjustment?While unemployment is highly negatively correlated with the level of economic activity, in the real world it responds with a lag. In other wands, firms do not immediately lay off workers in response to a sales decline. They wait a while before responding. Similarly, firms do not immediately hire workers when sales pick up. What do you think accounts for the lag in response time?Unemployment rates have been higher in many European countries in recent decades than in the United States. Is the main reason for this long-term difference in unemployment rates more likely to be cyclical unemployment or the natural rate of unemployment? Explain briefly.
- Some Firms Struggle to Hire Despite High Unemployment Matching people with available jobs is always diffi- cult after a recession as the economy remakes itself. But Labor Department data suggest the disconnect is particularly acute this time. Since the recovery began in mid-2009, the number of job openings has risen more than twice as fast as actual hires. If the job mar- ket were working normally, openings would be get- ting filled as they appear. Some five million more would be employed and the unemployment rate would be 6.8%, instead of 9.5%. Source: The Wall Street Journal, August 9, 2010 9. If the labor market is working properly, why would there be any unemployment at all?Some companies raise their workers pay by giving raises, but others prefer to give one-time bonuses instead. Think abouttwo steel mills facing a big two-year drop in steel demand: In one steel mill, workers have received pay raises every year for five years. In the second mill, most of the pay increases have occured through big bonuses at the end of each year. Which steel mill will probably keep more jobs during the two-year downturn? Why? Would you draw a perfectly vertical curve, a curve with a positive slope, or a curve with a negative slope?Let’s consider the economics of waiting. The economic cost of waiting can be viewed from two perspectives. For the company Apple, consider the cost of keeping an employee (i.e., an internal customer) waiting can be measured by unproductive wages. For external customers, the cost of waiting is the forgone alternative use of that time. In a competitive market, excessive waiting can lead to lost sales (Bordoloi, p. 95). Sometimes the perception of waiting is more important to the customer than the actual time spent waiting, suggesting that innovative ways should be found to reduce the negative aspects of waiting. Describe what this looks like within Apple's organization. What can be done today to reduce or eliminate this waiting, whether it is physical waiting or the perception of waiting? Also, consider waiting times for different access points for Apple: considering the website, calling Apple, emailing Apple, social media, and other access points. How will you address waiting in each of…
- A production function has two inputs: domestic labor (Edom) and foreign labor (Efor.) The market is originally in equilibrium as shown below, and the production budget is fixed. Suppose a shock occurs that increases the marginal product of domestic labor. Assuming no changes in domestic or foreign wages, what will happen to the quantities of domestic and foreign labor employed? Initial long run equilibrium (prior to shock):Show and explain the AS adjustment process, in other words, how output adjusts over time, from the short run to the long run (following the increase in G)You sell bracelets online. The demand for these bracelets is:P = 91 – 2QThe bracelets cost $4 each to produce. If you choose to sell a bracelet, you cannot sell a necklace, which has averaged $17 in profit. At what price should you sell the bracelets? Enter as a value. ROUND TO TWO DECIMAL PLACES.
- Reductions in employment in the U.S. auto industry caused by the increased adoption of new technologies to produce cars more efficiently is an example of: Select one: r: B a. structural unemployment. The Metho onceptual O b. frictional unemployment. Reflectio Scenari OC. seasonal unemployment. loyment w and e Od cyclical unemploymentA producer has the following technology.y= 6K^(1/2)L^(1/2) a) Prove formally that the production function exhibits constant returns to scale (use “λ” argument). b) Find analytically MPL and MPK. Is MPL increasing, decreasing, or constant inL? Is MPK increasing, decreasing, or constant in K? c) Short-run: Given stock of capital ̄K= 1 find labor demand (formula) of a competitive firm. Find equilibrium real wage rate if labor supply is given by Ls= 9 (one number). d) Assume again ̄K= 1 and that Ls= 9. The government adopts a real minimum wage of wmin/p=(3/2). Find labor demand (one number) and the unemployment rate (one number). Please depict the equilibrium on a graph with the real wage on the vertical axis and labor on the horizontal axis, indicating the equilibrium quantity of labor, wage, and unemployment, as well as the relevant curves. e) Find the cost function given prices of inputs wK= 4 and wL= 1 (formula). Plot the cost function on a graph, indicating the slope of the cost…A. Employment at will tends to raise the unemployment rate O. True O. False B. The minimum wage lowers the price of labor from the market wage to the minimum wage, and as labor becomes less expensive, firms increase employment from market employment to minimum wage employment O. True O. False
