Consider the Harris-Todaro (HT) model of dual economy. In the following diagram, labour unit is taken on the horizontal axis and marginal product of labour on the vertical axis. Going right from OM gives modern sector employment and going left from Or gives rural sector employment. The curve MPR is the marginal product curve of rural sector and wage w is wage paid in the modern sector. The curve MPM is the marginal product curve of modern sector.

Consider the Harris-Todaro (HT) model of dual economy. In the following diagram, labour unit is taken on the horizontal axis and marginal product of labour on the vertical axis. Going right from OM gives modern sector employment and going left from Or gives rural sector employment. The curve MPR is the marginal product curve of rural sector and wage w is wage paid in the modern sector. The curve MPM is the marginal product curve of modern sector.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.8P

See similar textbooks

Similar questions

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?
In the competitive labor market model of this chapter, the "value of the marginal product minus the wage" (MPL xP - W) for a given unit of labor (e.g., worker) gives Group of answer choices a) the change in output from the unit of labor being considered. b) the change in profit from the unit of labor being considered. c) the change in revenue from the unit of labor being considered. d) the change in price from the unit of labor being considered. e) the change in cost from the unit of labor being considered.
Cowles Foundationfor Research in Economicsat Yale UniversityCowles Foundation Discussion Paper No. 2021ARE WE APPROACHING AN ECONOMIC SINGULARITY?INFORMATION TECHNOLOGY AND THE FUTUREOF ECONOMIC GROWTHWilliam D. NordhausSeptember 2015An author index to the working papers in theCowles Foundation Discussion Paper Series is located at:http://cowles.yale.edu/This paper can be downloaded without charge from theSocial Science Research Network Electronic Paper Collection:http://ssrn.com/abstract=2658259Electronic copy available at: http://ssrn.com/abstract=2658259Are We Approaching an Economic Singularity?Information Technology and the Future of Economic GrowthWilliam D. Nordhaus1September 1, 2015AbstractWhat are the prospects for long-run economic growth? The presentstudy looks at a recently launched hypothesis, which I label Singularity.The idea here is that rapid growth in computation and artificialintelligence will cross some boundary or Singularity after whicheconomic growth will…
Let’s say we extend the the standard 1 person static labor supply problem instead to a family with two people making money. In the family of two money makers, given as person 1 and person 2, the given utility function is u(c1 + c2, l1, l2). Utility is defined as a function of the sum of goods consumed by the two people in the family, and of each person’s leisure time. Each person has a time endowment of “Ti” and gets a wage “wi”, where i = 1, 2. The two person family has a non-labour income defined y (which means this is the income of the family whether or not they work) and face price “p” for consumption goods. How can I utilize the Slutsky equation to show how the labour supply of 2 changes with w1? Thank you!
Define the income-leisure trade-off that makes up the labor supply functionand the intuition for the upward sloping labor supply curve. What two effectsare involved in this trade-off? Explain.
Please can i get help with my HW asap? Consider Bowles’ theory about the firm’s employment of labour for pursuing profit maximization. DefineQ = output per hour, e = the amount of output per unit of work done, d = the amount of work done per hour, andw = the hourly wage.Unit labour cost, ulc = w/QThe figure below shows the labour exaction curves of the firm. (a) If the firm has control over w, e and d, what can it do in order to increase its profits?(b) Explain the shape of the “old extraction curve” in the graph. What is the slope of the straight line that links up a point on the labour extraction curve and the origin?(c) Suppose that e and d are determined by technology and the firm’s extraction strategy (e.g., supervision), respectively. What causes the shift of the labour extraction curve from the “old” to the “new”?(d) Suppose there is a technical change such that e decreases but dincreases, and e (percentage change) < d (percentage change), is it profitable for the…
Suppose a firm’s technology requires it to hire 100 workers regardless of the wage level. The firm, however, has found that worker productivity is greatly affected by its wage. The historical relationship between the wage level and the firm’s output is given byWage Rate Units of Output$ 8.00 65$10.00 80$11.25 90$12.00 97$12.50 102What wage level should a profit-maximizing firm choose? What happens to the efficiency wage if there is an increase in the demand for the firm’s output?
Which has held a larger impact in the united states within this past century, added worker or discourage worker effect?
Please tell me which multiple choice is correct Given labour market equilibrium with identical workers, as set out in CORESelect one or more:a. Unemployment is always voluntaryb. Workers who are involuntarily unemployed cannot gain a job at any wagec. A Nash equilibrium existsd. Measured unemployment will be zero
For any given job, how do the economy-wide labour market conditions affect aworker’s bargaining power? Explain which labour market variable you would look at toassess labour market conditions.
Show the equilibrium outcome of the wage-setting, price-setting model of the labour market and provide economic intuition for the model
Please only awnser this question I must give uou the previous question below it for context Please awnser this one: In the same model of the labour market as in the previous question,Select one or more:a. A rise in labour supply will lead to a rise in wagesb. Given a constant mark-up a rise in labour productivity will lead to higher wagesc. A rise in product market competition will lead to a higher mark-upd. Equilibrium employment is given by the intersection of the wage and profit curves This one is just for context so you can awnser the question: Given labour market equilibrium with identical workers, as set out in CORESelect one or more:a. Unemployment is always voluntaryb. Workers who are involuntarily unemployed cannot gain a job at any wagec. A Nash equilibrium existsd. Measured unemployment will be zero