For example, the sticky-wage theory asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price , and the wages the firm pays its level of 100. If the actual price level turns out to be 110, the firm's output prices will the quantity of workers will remain fixed at the contracted level. The firm will respond to the unexpected increase in the price level by output it supplies. If many firms face similarly rigid wage contracts, the unexpected increase in the price level causes the quantity of output supplied to the natural level of output in the short run.
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- In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in the short run.Suppose the local economy experiences an influx of both skilled and unskilled workers, what will happen to prices of goods and services? Group of answer choices Since this increases the supply of labor, prices and wages both decrease. Since this increases the demand for labor, prices and wages both increase. Since this decreases the supply of labor, prices and wages both decrease. Since this increases the marginal product of labor, prices and wages both decrease. A worker on a Texas oil rig is likely to earn _______ than a reception because _________. Group of answer choices less; the job has unattractive characteristics. more; the job is more fun. more; the job is more prestigious. more; the job is more dangerous. please answer two questionsIn the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will(FALL, RISE, OR REMAIN THE SAME) , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by (REDUCING OR INCREASING) the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to (RISE ABOVE OR FALL BELOW)…
- In the short run, the quantity of output supplied by firms can deviate from the natural level of output if the actual price level deviates from the expected price level in the economy. A number of theories explain reasons why this might happen. For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will (decrease/not change/increase) , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by (raising/lowering) the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to (fall short of/exceed) the…V4. Suppose that you have the following information about the market for employees in your buisness: Supply: W=20+N Demand: W=40-N a. Suppose that the union negotiates a team size of only 5 employees. Draw this graphically and calculate the new equilibrium wage number of employees. b. Draw this graphically and calculate the equilibrium wage and number of employees hired.WAGE RATE Aplia Homework: Labor Markets and Labor Unions Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through collective bargaining, a labor union negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $24 to $32 per hour. The following graph shows the labor demand of an individual firm. On the following graph, show what happens at the firm level as a result of the union negotiations. Demand Demand Supply Supply 40 00 80 100 120 QUANTITY OF LABOR Now consider the effects of the wage change on the entire industry. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.…
- Suppose the labour market is summarised as: Demand: P = 100-Q Supply: P = Q The government imposes a minimum wage. However, consumers (firms) are unsurprisingly unhappy with the increase in wages and are negotiating with labour unions to return to the equilibrium wage. The union will agree to this if firms offer a lump sum transfer to producers (workers) equivalent to the maximum firms are willing to give, $1069.5. How much was the minimum wage? a. $97 b. $81. c. $73 d. $87Suppose a firm's labor demand equation is Ld=50-4(w), and the labor supply equation that it faces is L, -14 + 4(w), where w is the wage per hour worked. The government imposes a minimum wage that is 25% above equilibrium wage. As a result there will be O an increase in unemployment by 26. a decrease in unemployment by 10. an increase in unemployment by 16. a decrease in unemployment by 12. O no change in unemploymentThe following graph shows the labor market in the fast-food industry in the fictional town of Supersize City. In a labor market, workers supply their labor to the market in exchange for wages, and their behavior is represented by the supply curve. Similarly, firms pay wages to obtain labor, and thus their behavior is represented by the demand curve. In this way, wages are the price of labor. In this market, the equilibrium hourly wage is $_________, and the equilibrium quantity of labor is _________ thousand workers. Suppose a senator introduces a bill to legislate a minimum hourly wage of $6. This type of price control is called a _________ (options: quota, price ceiling, tax, price floor).
- Why does the collective behaviour of supply managers have such an impact on economic trends?Assume that the economy is in a recession and demand for labor is falling. Assume that wages are sticky. Draw a supply and demand graph that represents the labor market. Draw a graph that depicts what has happened to our demand and supply curves in the labor market, including our new equilibrium price and quantity of labor. Will the market experience an increase or a decrease in unemployment? Make sure you clearly label your graph, all of its components, and any curve shifts are clearly marked with the beginning and ending curves (you can use 0 and 1 or 1 and 2 to designate the first and the second curves).Suppose that the "wage distribution" in the economy improves: for the same level of the wage, a higher fraction of workers receive a wage offer (as depicted by the movement from H1(w) to H2(w) in the first picture). What is the effect on the long run equilibrium of the labor market, assuming that the reservation wage is unchanged? (a) PH,(w*) S(1-U) pH,(w*) H,(w) H,(W) (b) (c) pH,(w") S(1-U) pH(w*) PH,(w) S(1-U,) $(1-U,