17. Economics: Labor Economics Thank you for your help and support Academic Agent! O Workers with specific training know they do not need to work hard when employed.O Workers without specific training are never hired in the first place.O The laid-off worker with specific training is more valuable to the firm that laid her off thshe is to any other firm. Thus, it is in the worker's best interest to remain unemployed urecalled to work at her original firm.O Unemployment benefits are tied to specific training.O Specific training deteriorates quickly, so a laid-off worker with specific training is notvaluable to any firm.03:23escF1F280F3»06:45aF4gF5Il app.honorlock.com is sharing your screen. Stop sharingMacBook AirF6KF7DIIF8DDF9AF104F11F123 Temporary layoffs are common in the United States, especially among workers wheare heavily invested with specific training. Why?O Workers with specific training know they do not need to work hard when employed.O Workers without specific training are never hired in the first place.O The laid-off worker with specific training is more valuable to the firm that laid her off thanshe is to any other firm. Thus, it is in the worker's best interest to remain unemployed untilrecalled to work at her original firm.Unemployment benefits are tied to specific training.03:21esc!1:0FI2F2#380F306:45$4F4%5F5A6Il app.honorlock.com is sharing your screen.MacBook AirsiF6&78:F7* 008DIIF8(98:F9)0F10I'F11Stop sharing+=40F12delete

A layoff alludes to a temporary or permanent termination of employment by an employer because of…

O Workers with specific training know they do not need to work hard when employed. O Workers without specific training are never hired in the first place. O The laid-off worker with specific training is more valuable to the firm that laid her off she is to any other firm. Thus, it is in the worker's best interest to remain unemployec recalled to work at her original firm. O Unemployment benefits are tied to specific training.

O Workers with specific training know they do not need to work hard when employed. O Workers without specific training are never hired in the first place. O The laid-off worker with specific training is more valuable to the firm that laid her off she is to any other firm. Thus, it is in the worker's best interest to remain unemployec recalled to work at her original firm. O Unemployment benefits are tied to specific training.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.3P

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Follow-up questions. d. Let D be the difference in marginal product between an experienced worker and a new worker (MPe − MPn). Suppose that robust, experienced workers would prefer not to pool with sickly workers at their firm, and so they seek out a new job with an employer who does not offer health insurance. What will be the wage of the robust worker at the new job during the first year there? Keep in mind, these workers will no longer be experienced because they will be adapting to a new firm. Under what conditions will it make financial sense for the robust worker to change jobs? Your answer should be an inequality that includes D, θ, Vr, and Vs. e. D is a measure of job-specific human capital; as workers learn the job, they become more productive so D > 0. However, not every job or industry has the same value for D. In some lines of work D is low, while in others D is high, simply because of the nature of the work. Given the results, you have seen in this problem, in which…
hy does a measure of labor productivity—the output produced per worker– rise for many firms during recessions? During the boom years period of 2005through November 2007, the annual average output per worker was lower in U.S.manufacturing than during the Great Recession of 2007–2009 as well during therelatively low-demand years since then through 2013.Firms produce less output during recessions as demand for their products falls.Consequently, firms typically lay off workers during recessions. Thus, whetheroutput per worker rises or falls depends on whether output or employment fallsby more. The labor productivity pattern over the business cycle differs across in-dustries. If we know about a firm’s production process, can we predict whetheroutput produced per worker will rise or fall with each additional layoff?
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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?
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a) Present the Lagrangian (constrained maximisation) problem for the household under this modified specification and derive the first order conditions in this case. Hint: the household chooses c1, c2, ℓ1 and ℓ2. b) Use the first order conditions for ℓ1 and ℓ2 to derive an expression for the relative amount of leisure time chosen by the household over the two periods, i.e. derive an expression for (1–ℓ1)/(1–ℓ2). Explain how an increase in the relative wage (w2/w1) affects the household’s decision about how much leisure to enjoy in each period. c) Calculate the intertemporal elasticity of substitution between period 1 and period 2 leisure time in this case. Explain how the magnitude of this elasticity influences the household’s decision-making in the model. d) Use the first order conditions for c1 and c2 to derive an expression for the relative amount of consumption chosen by the household over the two time periods, i.e. derive an expression for c2/c1. Provide an economic interpretation…
Consider the representative consumer who decides consumption and leisure. Theenvironment is the same as in Lecture 5. Keep the same notation. The preference is givenby U (C,L) = αln C + (1 −α) ln L. Assume h = 1, i.e., the time endowment is one day.(a) Write down the utility maximization problem.(b) Derive the demand for consumption and the supply for labour.(c) Suppose the non-wage income π −T increases while the wage rate w falls at the sametime. The size of the changes can be different. Determine the effects on consumptiondemand and labour supply (i.e., leisure demand). Use the indifference map to explainyour results in terms of income and substitution effects for the following cases:(i) The increase in π −T exactly cancels out the drop in w, i.e., |∆ (π −T)|= |∆w|.(ii) The increase in π −T is greater than the drop in w, i.e., |∆ (π −T)|> |∆w|.(iii) The increase in π −T is smaller than the drop in w, i.e., |∆ (π −T)|< |∆w|.(d) Suppose the utility function is Cobb-Douglas: U…