Question Three. 1. Look at the diagram below. Consider the scenario where citizens have almost all the bargaining power. What will be the equilibrium outcome in this scenario (draw it on the graph)? (4) Slope - Business' MRS 100 Iso unit cost, firm's shutdown' condition In this region, the firm shuts down In this region citizens leave town Slope of citizens indifference curves MRS Citizens reservation indifference curve leave town condition Wages 2. What are some factors that could give citizen's more bargaining power? Why would it not be perfect (in other words why would they not have all the bargaining power)? (4) 3. Bonus. What is the economic logic for why w* stays fixed? (Not the mathematical reason). (2) Quality of the environment, E

Question Three. 1. Look at the diagram below. Consider the scenario where citizens have almost all the bargaining power. What will be the equilibrium outcome in this scenario (draw it on the graph)? (4) Slope - Business' MRS 100 Iso unit cost, firm's shutdown' condition In this region, the firm shuts down In this region citizens leave town Slope of citizens indifference curves MRS Citizens reservation indifference curve leave town condition Wages 2. What are some factors that could give citizen's more bargaining power? Why would it not be perfect (in other words why would they not have all the bargaining power)? (4) 3. Bonus. What is the economic logic for why w* stays fixed? (Not the mathematical reason). (2) Quality of the environment, E

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 5PA

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