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- If the unemployment rate is 6% before a rise in government purchases, and if a rise in government purchases induces the typicalunemployed person to search 10% longer in the hopes of finding ahigh-paying government job, what will the unemployment rate beafter the rise in government purchases? Only consider the impactof this waiting-for-a-good-job effect.A government passes a family-friendly law that no companies can have evening, nighttime, or weekend hours, so that everyone can be home with their families during these times. Analyze the effect of this law using a demand and supply diagram for the labor market: first assuming that wages are flexible, and then assuming that wages are sticky downward.The college graduates of 2000 could hardly have asked for better luck. The unemployment ratedropped to 4.1 % in May 2000- roughly, the lowest level in a generation- and employers wereliterally scrambling for new hires. Starting salaries rose, many graduating seniors had numerousjob offers, and some firms even offered $10,000- $20,000 bonuses to students who signed thedotted line. Three years later, the job market for the Class of 2003 was rather different. U.S. economic growth had slowed to a crawl, and then to a halt. Companies that had stocked up on recent college grads in the tighter labour markets of 1998-2000 found themselves with more than they knew what to do with in 2002 and 2003. They were not eager to hire more. Bonuses and other “perks” disappeared; job offers became scarcer. With the unemployment rate around 6% in May and June of 2003, the job market was far from the worst ever. But it was nothing like the glory days of 2000. Discussion:(i) Briefly explain and justify…
- In a particular industry, labor supply is ES = 10 + w and labor demand is ED = 40 - 4w, where E is the level of employment and w is the hourly wage. a. What are the equilibrium wage and employment if the labor market is competitive? What is the unemployment rate? b. Suppose the government sets a minimum hourly wage of $8. How many workers would lose their jobs? How many additional workers would want a job at the minimum wage? What is the unemployment rate?1)Plot the following markets on a graph: Labor market: using 5 laborers and $5.00 for wage as point A (equilibrium). AD/AS graph: using 19.1 trillion for RGDP and 1.9% for inflation as point A (equilibrium). How will our AD/AS graph look like when Congress implements an income tax hike in the labor market?) Suppose that 20,000 of the employed switches to jobs in the undergroundeconomy. When interviewed by STATIN, 50% of these switchers report that theyare not working and not seeking work, while the other 50% report that they arenot working but seeking work. Explain what happens to the officialunemployment rate and the “true” unemployment rate. (d) Illustrate and carefully explain the impact of an increase in the income tax ratefrom 25 percent to 35 percent on the demand for labour, supply of labour,equilibrium wage and level of employment.
- Suppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also that the supplies of both are fixed in the short run and \{(:Q_{C}=300)\} and that the demands for gold and silver are given by the following equations: P_{G}=960-Q_{G}+0.50P_{S} and P_{S}=600-Q_{S}+0.50P_{G} What the the equilibrium prices of gold and silver? The equilibrium price of gold is S and the equilibrium price of silver is S Please explain and show work.The minimum wage hike will mean a spike in unemployment: Study saysBy Jane Stevenson, Toronto Sun, September 19, 2017The Canadian Ontario government plans to set a minimum wage at $15 an hour. Currently, the median wage for low-skilled workers is $11.40. According to a study released Tuesday by the free enterprise Fraser Institute, the imposition of a minimum wage above current wages would lead to more unemployment for low-skilled workers. (A) (i) Below, complete the market for low-skill labor correctly labeling both axes and assuming the demand for labor has some elasticity; (ii) by the supply curve and demand curves, state who are the demanders and who are the suppliers; and (iii) from information in the article, set out in the market the current equilibrium “price” and depict the equilibrium quantity for low-skill labor. (B) (i) Depict in the market above in (A) the establishment of a $15/hour minimum wage by the Canadian Ontario government, and (ii) set out in the market the new…The minimum wage hike will mean a spike in unemployment: Study saysBy Jane Stevenson, Toronto Sun, September 19, 2017The Canadian Ontario government plans to set a minimum wage at $15 an hour. Currently, the median wage for low-skilled workers is $11.40. According to a study released Tuesday by the free enterprise Fraser Institute, the imposition of a minimum wage above current wages would lead to more unemployment for low-skilled workers. (D) (i) Below, complete the market for low-skill labor correctly labeling both axes and assuming demand for low-skill labor is perfectly inelastic; (ii) from information in the article, set out in the market the current equilibrium “price” and depict the equilibrium quantity for low-skill labor. (E) (i) Depict in the market above in (D) the establishment of a $15/hour minimum wage by the Canadian Ontario government, and (ii) set out in the market the new equilibrium “price” and the new equilibrium quantity for low-skill labor. (F) Is the graph…
- Suppose Friendly Airlines is considering signing a long-term contract with the union representing its pilots. Friendly Airlines and the union both agree that real wages should increase by 2%. Inflation is expected to be 5%, so they agree on a 7% nominal wage increase. Now, suppose inflation turns out to be lower than expected, coming in at 4%. This would ______ (options: benefit, harm) the union and _________ (options: harm, benefit) Friendly Airlines because the real wage increase would now be ________ (options: 2%, 1%, -3%, -1%, -2%, 3%).Suppose Friendly Airlines is considering signing a long-term contract with the union representing its pilots. Friendly Airlines and the union both agree that real wages should increase by 2%. Inflation is expected to be 3%, so they agree on a 5% nominal wage increase. Now, suppose inflation turns out to be higher than expected, coming in at 4%. This would______the union and ________Friendly Airlines because the real wage increase would now be ________ .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 graphs
