Exploring Economics
Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Chapter 16, Problem 5P
To determine

To explain:

The impact on the equilibrium wage if on the job training and free insurance is given to the workers. The effect on the on the job training and health insurance if a certain minimum wage is made mandatory by the government.

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Assume that the supply of electrical technicians is low so a firm hires a group of them at $18 per hour. Two years later, due to a recession, the supply of technicians is high so the market rate for them is now $15 per hour. Should the firm pay new hires $18 or $15? Given that the firm bases pay on supply and demand, should it lower the pay of existing mechanics to $15
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