c. Suppose that the markup of the prices of products over wage cost, z, is 10%, and that thewage-setting equation is W = P(1– 2m + z). Where m is the unemployment rate and zis the unemployment benefit/minimum wage.i.What is the real wage, as determined by the price-setting equation?ii.Solve for the natural rate of unemployment

The wage-setting equation is W= P(1-2m+z). Wage cost and z is 10%, i.e., 0.1 (so m and z both are…

Answered: c. Suppose that the markup of the…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 5SCQ: Beginning in the 1970s and continuing for three decades, women entered the U.S. labor force in a big...

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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?
Beginning in the 1970s and continuing for three decades, women entered the U.S. labor force in a big way. If we assume that wages are sticky in a downward direction, but that around 1970 the demand for labor equaled the supply of labor at the current wage rate, what do you imagine happened to the wage rate, employment, and unemployment as a result of increased labor force participation?
Please no written by hand solutions Suppose that the markup of goods prices over marginal cost is 5%, and that the wage-setting equation is W= P(1-u), where u is the unemployment rate. a. What is the real wage, as determined by the price-setting equation? b. What is the natural rate of unemployment? c. Suppose that the markup of prices over costs increases to 10%. What happens to the natural rate of unemployment? Explain the intuition behind your answer.
J 7 (1) Suppose that the mark-up of goods prices over marginal cost is 25% (0.25), and the wage setting equation is given by W=P(1-5u). Calculate the real wage, as determined by the price-setting equation. (2) Consider (1). Solve for the natural rate of unemployment.
A6 Show that the real wage implied by price-setting behaviour is a constant fraction of the marginal product of labour. How does this share vary with the intensity of product market competition? Explain intuitively.
10 DRAW A GRAPH. WITHOUT GRAPH THUMBS DOWN!Suppose the markup of goods prices over marginal cost is 2% and the wage-setting equation is W=P(1-u) with u being the unemployment rate.1. What is the Natural level on Unemployment?2. What is the real wage as determined by the price setting equation?3. If the markup increases to 2.5% due to an increase in the price of Oil what happens to the natural rate of employment? Explain briefly and graphically this change.
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
on January 1, 2019, South Africa's first-ever national minimum wage came into effect. The legislation stipulated a minimum national rate of R20 per hour, or R3500 per month, depending on the number of hours worked. Some economists warned that it may depress SA's already high unemployment rate further by making it more expensive to hire workers. Using your knowledge of basic economic theory, illustrate and explain with the aid of a graph why some economists might have given such a warning?
Suppose that the mark-up of goods prices over marginal costs is 10% and that the wage-setting equation is W=P(1-u), where u is unemployment rate. Calculate the real wage, as determined by the price-setting equation and the natural rate of unemployment.
A proposal that is attracting increasing attention is a requirement that employers provide theirworkers with paid sick leave. This problem asks you to analyze the effects of such a policy on wages andemployment 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 itnot possible to tell)? include graphs
Suppose a firm’s hourly marginal product of labour is given by MPN = 0.2(200 − N), where N is the number of labour hours used in production. The amount of labour supplied by workers, NS, is given by NS = 100 + 5w, where w is the real wage. (a) Suppose the current real wage is equal to 20. How much labour will the firm want to hire? How much labour will the workers want to supply? Is there excess supply or excess demand of labour in the economy? Do you expect the real wage to go up or go down in this case? (b) Find the equation of the labour demand and calculate the equilibrium levels of real wage and full-employment. (c) If the government decides to tax the labour income, the equation of labour supply becomes NS = 100 + 5(1 − τ )w. Suppose τ = 40%. Repeat part (b). Compared to the results in (b), do the equilibrium levels of real wage and full-employment increase or decrease? Provide an intuitive explanation to your answers.
if a worker receives a raise in their nominal wage from $10 t0 $15 per hour at the same time the price level doubles, the worker's real rage has approximately: A: increased by 50% B: Incerased by 100% C: dECREASED BY 50% D: Decreased by 33% with explanation

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