While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In otherwords, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy.Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young,inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate. Graph Input ToolLabor Market15Labor SupplyIWage Rate(Dollars per hour)$8.712Labor Demanded(Thousands ofworkers)Labor Supplied(Thousands ofworkers)420580Surplus Labor160workers)Labor DemandLabor Demand ShiftersТах Credit(Dollars per hour)200400600B001000QUANTITY (Thousands of workers)Suppose the minimum wage in this economy is s8.70 per hour. An unemployed worker is defined as someone who is willing to work at the prevailingwage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also theprevailing wage.If the wage is not allowed to fall below $8.70 per hour, the size of the unskilled labor force isworkers, andunskilledworkers are considered unemployed.The unemployment rate is defined as the percentage of unemployed workers in the labor force:Unemployment Rate =LinenplosedLahor Forcex 100At a minimum wage of $8.70 per hour, the unemployment rate among unskilled workers is approximatelyRecall that according to the article, a bill moving through the legislature would allow small businesses in Illinois to collect a tax credit to offset theadditional cost of a higher minimum wage. The previous graph shows an initial tax credit of so. For simplicity, assume that small businesses are theprimary demanders of unskilled workers, and they would receive a tax credit equating to $1 per hour.True or False: With a minimum wage of $8.70, unemployment of unskilled workers is lower with the tax credit versus without it.O TrueO FalseWAGE (Dollars per hour)

In a labor market, minimum wage refers to the situation when government sets a specific wage that a…

Answered: Graph Input Tool Labor Market Labor…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 10SQP

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While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph
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,…
Consider the following dialog between Amy, an economics student who currently studies macroeconomics, and Deborah, her teaching assistant.AMY: Hi Deborah, I'm working on my Aplia homework and realized that I do not understand the definition of the labor force very well. Does it include discouraged workers? DEBORAH: Hi Amy, the conventional definition of the labor force excludes discouraged workers. This is because they gave up looking for jobs . Also, be sure not to mistake discouraged workers for part-time workers. The key difference is that the latter cannot find suitable full-time jobs . AMY: I think I understand it now, thank you. DEBORAH: Let me ask you a question to see if you can apply your knowledge. Consider an economy with 20 full-time workers, 16 part-time workers, 10 workers who have been laid off but are actively looking for a new job, and 3 formerly full-time workers who have been without a job for over a year, failed to find any, and gave up looking. Can you…
In recent years, due to the epidemic, a large number of workers got separated from their jobs. Use the Mortensen‐Pissarides model to explain the consequences of an increase in the separation rate for unemployment and labor market tightness and describe the dynamics of the economy following an increase in the job separation rate.
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 Ratio An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs. After an unsuccessful search, some laid-off workers quit looking for new jobs. Numerous students graduate from college and immediately begin new jobs. Advances in health care prolong the lives of many retirees.
The Federal Reserve Bank of Atlanta releases its monthly Wage Growth Tracker to study trends in wages across various industries. One interesting issue is whether wages rise faster for those who stay in their current jobs (job stayers) or those who seek new opportunities (job switchers). According to the data, job stayers tend to do better than job switchers during a recession. But when the labor market is strong, job switchers experience higher wage growth than job stayers. a. During a recession, job stayers do better than job switchers because a.labor demand increases and job switchers can find jobs with higher wages. b.labor supply decreases and job switchers can find jobs with higher wages. c.labor demand decreases and job switchers cannot find jobs with higher wages. b. When the labor market is strong, job switchers experience higher wages than job stayers because a.labor demand decreases and job switchers cannot find jobs with higher wages. b.labor supply…
The graphs below depict the initial market for labor (on the left) and the macroeconomic production function (on the right). You will use these graphs to identify the effect of an increase in the number of available workers on employment, Potential GDP, and per-worker productivity. Suppose that a substantial increase in labor force participation increases the supply of labor by 40,000 workers at every value of the real wage. (1) Identify the effect of this event on equilibrium employment in the market for labor, and identify the specific new equilibrium level of employment. (2) Identify the effect of this event on Potential GDP, and identify the specific new level of Potential GDP. (3) Finally, identify the effect of this event on per-worker productivity, and identify the specific new level of per-worker productivity. You should embed a graph that clearly depicts (1) the correct supply shift in the market for labor, (2) the new equilibrium real wage, and (3) the new equilibrium…
Discuss:The weakness in Marx’s contention that the introduction of new machinery and new techniques of production would cause a growing reserve army of the technologically unemployed.
Classify the following as microeconomics or macroeconomics and provide a justification for your response. A comparison of alternative tax policies and their respective impacts on the rate of the nation’s economic growth The decision by McDonald’s to hire fewer workers because of an increase in the minimum wage. Susan’s decision about how much income to save The central bank announces that it is increasing the discount rate in an effort to slow the rate of inflation. Question 2 A snowboard company currently hires 10 skilled employees who are paid a weekly wage of $1,000.00. the cost of capital is $3000 and it is fixed, which means that it does not vary with output. The company is currently producing 240 snowboards. The company’s cost will be $13,500 if it produces an additional snowboard. A customer is willing to pay $550 for the 241st snowboard. Should the company produce and sell it? Timothy quits his job which pays $84000 a year, to enrol in a 2-year…
The graphs below depict the initial market for labor (on the left) and the macroeconomic production function (on the right). You will use these graphs to identify the effect of an increase in the number of available workers on employment, Potential GDP, and per-worker productivity. Real Wage $35 $30 $25 $20 $15 $10 $5 20 40 60 80 Supply Demand 140 100 120 Quantity of Employment (in thousands of workers) Potential GDP (in millions of dollars) $70 $60 $50 $40 $30 $20 $10 20 40 60 80 100 120 140 Quantity of Employment (in thousands of workers) Suppose that a substantial increase in labor force participation increases the supply of labor by 40,000 workers at every value of the real wage. (1) Identify the effect of this event on equilibrium employment in the market for labor, and identify the specific new equilibrium level of employment. (2) Identify the effect of this event on Potential GDP, and identify the specific new level of Potential GDP. (3) Finally, identify the effect of this…
The basic difference between macroeconomics and microeconomics is: Group of answer choices microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy microeconomics concentrates on the behaviour of individual consumers while macroeconomics focuses on the behaviour of firms microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade
Classify each of the below individuals as employed, unemployed, not in the labor force, or not in the adult, civilian, non-institutionalized population. A 14-year old who babysits on the weekend: employed, unemployed, not in the labor force, or not in the adult, civilian, non-institutionalized population. An active-duty soldier who volunteers without pay in the community: employed, unemployed, not in the labor force, or not in the adult, civilian, non-institutionalized population. A parent who has stopped looking for jobs in order to take care of the children: employed, unemployed, not in the labor force, or not in the adult, civilian, non-institutionalized population. A student who has begun applying for jobs but has not yet found one: employed, unemployed, not in the labor force, or not in the adult, civilian, non-institutionalized population. An actor who works part-time at a restaurant but is looking for full-time work: employed, unemployed, not in the labor force, or not in…

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