Suppose government mandates required firms to make 'safety expenditures' on behalf of workers that did not improve labor productivity. Describe the scale and substitution effects these mandates would have in the labor market.
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- Describe how each one of these recent trends in labor markets might reflect allocation of labor supply responses -- labor force participation or desired work hours (applying the net substitution and income effects, reservation wage rates, nonwage income): B) Declining rates of labor force participation among teenagers, but then stabilizing;In a competitive labor market, an increase in theminimum wage results in a(n) _________ in thequantity of labor supplied and a(n) _________ in thequantity of labor demanded.a. increase; increaseb. increase; decreasec. decrease; increased. decrease; decreaseThe labor supply curve is the relationship between the wage level and the quantity of labor that workers are willing to provide. Why is applying the usual ceteris paribus assumption more complicated in this case than when weapply it to the product market?
- Determine whether each of thefollowing would increase or decrease the opportunity costs formothers who choose not to work outside the home. Explain youranswers.a. Higher levels of education for womenb. Higher unemployment rates for womenc. Higher average pay levels for womend. Lower demand for labor in industries that traditionally employlarge numbers of womenHow each of the following situations will affect labour demand, i.e. if it will cause amovement along the labour demand curve or a shift (state left or right) in the labour demandcurve. i) An increase in the minimum wage. ii) An increase in the efficiency of labour. iii)Use your knowledge of household production theory to indicate the following: a) The expected effect of a wage increase on women’s labour supply. b) The expected effect of an increase in the wage of a women on the demand for children. c) Why the substitution effect for labour supply may be larger for women than men. d) The effect of a spouse’s disability on the other person’s labour supply, where the spouse requires home (not institutional) care. e) The effect on the same spouse’s labour supply, as in (d), if the government (or private insurance) provided financial compensation to the family.
- What happens to hours of work when the wage rate falls? Decompose the change in hours of work into income and substitution effects.What does the assumption of market clearing imply?(Explain) and Howapplicable is this assumption to the labour market in the longrun as well as the shortrun?how will each of the following scenario impact the market for labour. workers become more concerned about the future and terefore wish to increase their hours of work, at the same time there is an increase in capital stock which makes workers more productive.
- 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?Explain the dual labor market?How each of the following situations will affect labour demand, i.e. if it will cause amovement along the labour demand curve or a shift (state left or right) in the labour demandcurve. i) A decrease in the price of capital where labour and capital are substitutes. ii)