Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 20, Problem 4QR
To determine
Whether the minimum wage is a reason for structural
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Are minimum-wage laws a better explanation forstructural unemployment among teenagers or amongcollege graduates? Why?
Explain why wage rigidity due to labor unions may lead to structural unemployment.
Why is the optimal rate of unemployment, from an economic perspective, never zero?
Chapter 20 Solutions
Essentials of Economics (MindTap Course List)
Ch. 20.1 - Prob. 1QQCh. 20.2 - Prob. 2QQCh. 20.3 - Prob. 3QQCh. 20.4 - Prob. 4QQCh. 20.5 - Prob. 5QQCh. 20 - Prob. 1CQQCh. 20 - Prob. 2CQQCh. 20 - Prob. 3CQQCh. 20 - Prob. 4CQQCh. 20 - Prob. 5CQQ
Ch. 20 - Prob. 6CQQCh. 20 - Prob. 1QRCh. 20 - Prob. 2QRCh. 20 - Prob. 3QRCh. 20 - Prob. 4QRCh. 20 - Prob. 5QRCh. 20 - Prob. 6QRCh. 20 - Prob. 7QRCh. 20 - Prob. 1PACh. 20 - Prob. 2PACh. 20 - Prob. 4PACh. 20 - Prob. 5PACh. 20 - Prob. 6PACh. 20 - Prob. 7PACh. 20 - Prob. 8PACh. 20 - Prob. 9PACh. 20 - Prob. 10PA
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- What type of wage rigidity is most likely to affect the unemployment rates of the following types of workers: a. workers with low marginal labor productivity? b. workers in the auto industry? c. workers engaged in creative work that is not easily monitored?arrow_forwardHow does the amount of unemployment created by an increase in the minimum wage depend on the elasticity of labor demand? Do you think an increase in the minimum wage will have a greater unemployment effect in the fast-food industry or in the lawn-care/landscaping industry?arrow_forwardHow can seasonal unemployment be alleviated? Should it be alleviated? Why or why not?arrow_forward
- Minimum-wage laws a. create unemployment. b. do not apply in states with right-to-work laws. c. affect highly-educated workers more than high school dropouts. d. cause labor shortages, which further raise wages above equilibrium.arrow_forwardWhy is the optimal rate of unemployment, from an economic perspective, never zero?Explain.arrow_forwardWhy do efficiency wages generate involuntary unemployment? What factors prevent the market from clearing in efficiency wage models?arrow_forward
- Suppose in India, a minimum wage is instituted in the urban sector above the market clearing wage, whilst the rural traditional wage is market determined at a lower level than in the urban sector. Discuss and show the impact of this policy on the rural traditional wage, the rural labour force, and the urban sector unemployment. Can we expect the urban sector wage to equal to the traditional sector wage after the markets equilibrate through migration? What effects might the relocation costs and the introduction of factories in rural areas have on the equilibrium discussed in part (a)?arrow_forwardDiscuss the historical patterns of unemployment of any chosen economy.arrow_forwardThe number of adults not in the labor force of a country equals 6 million, and the number of individuals employed is 5 million. If there are 12 million potential adult workers in the economy, what is the current unemployment rate in this country? 45 percent 67 percent 21 percent 55 percent If the opportunity cost of working outside the home increases, then ________ the labor supply curve, assuming all else equal. there will be a left shift in there will be a right shift in there will be an upward movement along there will be a downward movement along Which of the following statements is true? Technological innovation always leads to unemployment in an economy as a whole. Technological innovation can cause wages to fall for some workers in an economy. Technological innovation increases wages for all workers in an economy. Technological innovation reduces the demand for goods and services in an economy. If the annual inflation rate in an economy is i, then $1 borrowed at the…arrow_forward
- When unemployment exists in the supply and demand labor market model, there is an adjustment that brings the model back into equilibrium—back to full employment. Orthodox economists cite two mechanisms that cause the adjustment. Explain each of these.arrow_forwardDiscuss and show the impact of this policy on the rural traditional wage, the rural labour force, and the urban sector unemployment. Can we expect the urban sector wage to equal to the traditional sector wage after the markets equilibrate through migration?arrow_forward
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