The marginal product of labor in the econonomy is MPN=130-0.5N, and the supply of labor is 200+2w. N is the amount of labor and w is the real wage. What is the market clearing real wage and equilibrium employment What happens if the minimum wage is $9.00 How would a government imposed lump sum tax impact the real wage and labor market
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The marginal product of labor in the econonomy is MPN=130-0.5N, and the supply of labor is 200+2w. N is the amount of labor and w is the real wage.
What is the market clearing real wage and equilibrium employment
What happens if the minimum wage is $9.00
How would a government imposed lump sum tax impact the real wage and labor market
Market clearing real wage is the real wage rate at which the quantity of labor supplied is equal to the quantity of labor demanded. It is the wage rate that balances the market for labor and eliminates any surplus or shortage of labor.
Equilibrium employment is the level of employment at the market clearing real wage. It is the number of workers that firms are willing to hire at the market clearing wage, and the number of workers who are willing to supply their labor at that wage.
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- Suppose a firm’s hourly marginal product of labour is given by MPN = 0.2(200 − N), where N is the number of labour hours used in production. The amount of labour supplied by workers, NS, is given by NS = 100 + 5w, where w is the real wage. (a) Suppose the current real wage is equal to 20. How much labour will the firm want to hire? How much labour will the workers want to supply? Is there excess supply or excess demand of labour in the economy? Do you expect the real wage to go up or go down in this case? (b) Find the equation of the labour demand and calculate the equilibrium levels of real wage and full-employment. (c) If the government decides to tax the labour income, the equation of labour supply becomes NS = 100 + 5(1 − τ )w. Suppose τ = 40%. Repeat part (b). Compared to the results in (b), do the equilibrium levels of real wage and full-employment increase or decrease? Provide an intuitive explanation to your answers.Q) 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 laborConsider 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…
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- A proposal that is attracting increasing attention is a requirement that employers provide theirworkers with paid sick leave. This problem asks you to analyze the effects of such a policy on wages andemployment in normal times.a. How, if at all, would such a policy affect labor demand? (explain using MRP)b. How, if at all, would it affect labor supply? (explain using willingness to work)c. How, if at all, would the policy affect normal employment and the normal real wage (or is itnot possible to tell)? include graphsStatutory Minimum Wage (SMW) has come into force since 1 May 2011 in Hong Kong. The current SMW rate is $37.5 per hour. With the aid of a demand-and-supply diagram, illustrate the effect of aneconomic recession on a labour market with an effective minimum wage.Suppose the supply curve of physicists is given by w =10 + 5E, while the demand curve is given by w = 50 - 3 E. Calculate the equilibrium wage and employment level. Suppose now that the demand for physicists increases to w = 70 - 3 E. Assume the market is subject to cobwebs. Calculate the wage and employment level in each round as the wage and employment levels adjust to the demand shock. (Recall that each round occurs on the demand curve—when the firm posts a wage and hires workers.) What are the new equilibrium wage and employment level?
- "no shirking constraint" (NSC) curve never crosses the supply of labor curve, so: Question 15 options: A) there is always full employment in equilibrium. B) the gap between the NSC curve and the supply of labor curve equals the difference between the efficiency wage and the market-clearing wage. C) the efficiency wage is always lower than the market-clearing wage. D) there is always some unemployment in equilibrium. E) the market never reaches equilibrium. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.We are looking at a consumer who should choose how many hours she wants to work, and thus how much free time she gets. Let l symbolize working hours and f free time. The hourly wage is w, and there is a tax rate t on income. Let x be the amount of material goods, and p the price level. a) Explain how the consumer determines his work offer (desired number of working hours). b) What will be the effect on the labor supply of wage increases. Explain in particular what we mean by the substitution and income effect of the wage increase. c) The consumer receives a financial support of z kroner if the net market income is lower than a certain limit (y). Show on a figure what the budget line now looks like. How can the support be thought to affect the labor supply for (i) a consumer who without the support scheme would have an income below the limit, and (ii) a consumer who without the support would have an income above the limit.Assume in a two-sector economy made up of agriculture and manufacturing, the government introduces a subsidy of y per hour on labour in the manufacturing sector. What will be the effect of the policy on the equilibrium wage, total employment as well as employment in agriculture and manufacturing?