12. "Consider the labor market in year 2021 but now assume that wages are totally rigid and cannot adjust during 2021. In this year business owners predict low sales for the years to come. As a result, they reduce labor demand. Draw the new equilibrium in a diagram and label it as point C. Use the following equations to find the new equilibrium: LD=70,000-w, LS=b+2w, where b=10,000. What is the new level of employment? Keep in mind that wages are totally rigid."
12. "Consider the labor market in year 2021 but now assume that wages are totally rigid and cannot adjust during 2021. In this year business owners predict low sales for the years to come. As a result, they reduce labor demand. Draw the new equilibrium in a diagram and label it as point C. Use the following equations to find the new equilibrium: LD=70,000-w, LS=b+2w, where b=10,000. What is the new level of employment? Keep in mind that wages are totally rigid."
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter4: Labor And Financial Markets
Section: Chapter Questions
Problem 31P: Table 4.6 shows the amount of savings and barrowing in a market for loans lo purchase homes,...
Related questions
Question
![12. "Consider the labor market in year 2021 but now
assume that wages are totally rigid and cannot adjust
during 2021. In this year business owners predict low
sales for the years to come. As a result, they reduce
labor demand. Draw the new equilibrium in a diagram
and label it as point C. Use the following equations to
find the new equilibrium: LD=70,000-w, LS=b+2w,
where b=10,000. What is the new level of
employment? Keep in mind that wages are totally
rigid."
13. "Consider the labor market in year 2021 but now
assume that wages are totally rigid and cannot adjust
during 2021. In this year business owners predict low
sales for the years to come. As a result, they reduce
labor demand. Draw the new equilibrium in a diagram
and label it as point C. Use the following equations to
find the new equilibrium: LD=70,000-w, LS=b+2w,
where b=10,000. What is the unemployment rate?
Keep in mind that wages are totally rigid and use the
diagram to help you understand what is going on."](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3d7f3e4b-ed45-47e1-b009-fc1c4c5184c8%2F6e74d742-16f4-4613-8de9-0d6812c163ed%2Faufqs6k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:12. "Consider the labor market in year 2021 but now
assume that wages are totally rigid and cannot adjust
during 2021. In this year business owners predict low
sales for the years to come. As a result, they reduce
labor demand. Draw the new equilibrium in a diagram
and label it as point C. Use the following equations to
find the new equilibrium: LD=70,000-w, LS=b+2w,
where b=10,000. What is the new level of
employment? Keep in mind that wages are totally
rigid."
13. "Consider the labor market in year 2021 but now
assume that wages are totally rigid and cannot adjust
during 2021. In this year business owners predict low
sales for the years to come. As a result, they reduce
labor demand. Draw the new equilibrium in a diagram
and label it as point C. Use the following equations to
find the new equilibrium: LD=70,000-w, LS=b+2w,
where b=10,000. What is the unemployment rate?
Keep in mind that wages are totally rigid and use the
diagram to help you understand what is going on."
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