Explain how equilibrium wages and employment change in the economy when there is an increase in the number of working-age immigrants. Be clear on the short-run and long-run response.
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Explain how equilibrium wages and employment change in the economy when there is an increase in the number of working-age immigrants. Be clear on the short-run and long-run response.
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- Explain in detail what will happen to the natural rate of unemployment and the real wage when firms decide to increase their markups.suppose there is an adverse supply shock. It would a. Shift the production function up and decrease marginal products at every level of employment b. Shift the production function down and decrease marginal products at every level of employment c. Shift the production function up and increase marginal products at every level of employment d. Shift the production fun going down and increase marginal products at every level of employmentQ) a) What is the equilibrium wage rate and equilibrium level of employment? A. $15 and 35 units of labor B. $20 and 15 units of labor C. $25 and 20 units of labor D. $35 and 10 units of labor b) If the government institutes a minimum wage rate at $30, the unemployment in the market will be: A. 10 units of labor. B. 15 units of labor. C. 20 units of labor. D. 25 units of labor. C) f the government fixes a minimum wage rate at $15, the unemployment in the market will be: A. 0 units of labor B. 10 units of labor C. 20 units of labor D. 30 units of labor
- An improvement in technology will lead to a. A lower equilibrium wage and lower equilibrium employment b. A higher equilibrium wage and higher equilibrium employment c. A lower equilibrium wage but higher equilibrium employment d. A higher equilibrium wage but lower equilibrium employmentA decrease in the level of output will cause the following events on the labour market: Select one: a. The level of unemployment decreases causing an increase in the bargaining position of workers which enables them to bargain for a nominal wage increase. b. The natural level of unemployment increases causing a decrease in the bargained real wage. c. The level of unemployment increases which causes a decline in the bargaining position of workers resulting in a lower bargained nominal wage. d. The natural level of unemployment decreases causing an increase in the bargained real wage.Economists use labor-market data to evaluate how well an economy is using its most valuable resource—its people. Two closely watched statistics are the unemployment rate and the employment–population ratio (calculated as the percentage of the adult population that is employed). Indicate what happens to the unemployment rate and the employment–population ratio in each of the following scenarios. Scenario Effect On... UNEMPLOYMENT RATE EMPLOYMENT POPULATION RATION Many previously laid-off workers find jobs in new startup firms as the economy expands. (DECREASE, INCREASE OR STAY THE SAME) (DECREASE, INCREASE OR STAY THE SAME) After an unsuccessful search, some laid-off workers decide to go back to school as full-time students. (DECREASE, INCREASE OR STAY THE SAME) (DECREASE, INCREASE OR STAY THE SAME) As a result of an economic boom, many students drop out of school and start working as soon as they become adults. (DECREASE,…
- Which of the following statements correctly describes the demand for labor? A. The higher the real wage rate, the greater is the quantity of labor that firms find it profitable to hire because firms can hire higher-skilled labor at higher wage rates. B. The real wage rate influences the quantity of labor demanded because what matters to firms is how much output they must sell to earn the dollars they pay the workers. C. Each additional hour of labor hired produces more additional output than the previous hour. D. The demand for labor curve is downward sloping because hours per person increase as the real wage rate falls.An increase in labour participation rate will lead to a. A higher equilibrium wage but lower equilibrium employment b. A lower equilibrium wage and lower equilibrium employment c. A higher equilibrium wage and higher equilibrium employment d. A lower equilibrium wage but a higher equilibrium employmentTrue or false: Equilibrium employment is given by the intersection of the wage and the profit curves
- How does an increase in the minimum wage affect employment in the short run according to conventional economic theory? A. Increases employment B. Decreases employment C. Has no effect on employment D. Depends on other factorsConsider a closed economy. The only two factors of production in this economy are capital and labor. In this economy prices are fully flexible, factor markets are competitive, and the supply of the factors of production is fixed. Suppose there is a change in immigration policy in the country such that there is a huge influx of foreign workers into the labor market, other things being equal. Assume a Cobb-Douglas production function for this economy. a. Graph the effects that this new policy will have on i. The labor market, and the market for capital. ii. The loanable funds market Note: When drawing your graph correctly label all curves, axes, initial and final equilibrium values, and the direction of the change in any curve. b. Explain how the equilibrium values of labor, the real wage, saving, investment, and the real interest rate change.Consider an economy in which the marginal product of labour is given by MPN = A(150 − N), where N is the amount of labor used. The amount of labour supplied is given by 60 + 5(1 − t)w, where w is the real wage and t is the tax rate on labour income. (a) Suppose A = 2 and t = 20%. Calculate the equilibrium levels of real wage and employment. (b) Suppose that the economy experiences an adverse supply shock and A = 1. Everything else remains the same as before. Calculate the equilibrium levels of real wage and employment in this case. (c) Suppose that the government lowers the labour income tax by 50% following the adverse supply shock, i.e., A = 1 and t = 10%. Calculate the equilibrium levels of real wage and employment in this case. (d) Use the labour market diagram to illustrate the adjustments from the original equilibrium in part (a) to the equilibrium in part (b) and then the adjustments from the equilibrium in part (b) to the equilibrium in part (c). Explain the adjustments from…
