24. Consider the Mortensen-Pissarides model studied in class. Suppose the wage, w, is constant. The firms' profits are taxed at rate T. The matching function is the same as the one used in class, the job destruction probability is s, labor productivity is y, and the cost to open a vacancy is k. Then, market tightness in equilibrium is: d. a. 1/2 [(1 + r) (y − w)₁¹. w) C. sAk [STK (Y - W) 1²/2 A [s(1 + r)(y-w)] Ak ² b. [stk( e. W (1-7) [SA(v=w) 1¹/² k 2 y-w)√² [A(1 – t)(y − w) sk
24. Consider the Mortensen-Pissarides model studied in class. Suppose the wage, w, is constant. The firms' profits are taxed at rate T. The matching function is the same as the one used in class, the job destruction probability is s, labor productivity is y, and the cost to open a vacancy is k. Then, market tightness in equilibrium is: d. a. 1/2 [(1 + r) (y − w)₁¹. w) C. sAk [STK (Y - W) 1²/2 A [s(1 + r)(y-w)] Ak ² b. [stk( e. W (1-7) [SA(v=w) 1¹/² k 2 y-w)√² [A(1 – t)(y − w) sk
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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![**Economic Models and Equilibrium Analysis**
24. **Market Tightness in the Mortensen-Pissarides Model**
Consider the Mortensen-Pissarides model studied in class. Assume the wage, \( w \), is constant. The firms' profits are taxed at rate \( \tau \). The matching function is the same as the one used in class. The job destruction probability is \( s \), labor productivity is \( y \), and the cost to open a vacancy is \( k \). The market tightness in equilibrium is given by one of the following expressions:
a. \[
\left( \frac{(1 + \tau)(y - w)}{sAk} \right)^{1/2}
\]
b. \[
\left( \frac{stk(y - w)}{A} \right)^{1/2}
\]
c. \[
\frac{s(1 + \tau)(y - w)^2}{Ak}
\]
d. \[
(1 - \tau) \left( \frac{sA(y - w)}{k} \right)^{1/2}
\]
e. \[
\frac{A(1 - \tau)(y - w)^2}{sk}
\]
This set of expressions represents different formulations of market tightness in the model under consideration. Each option reflects different variables and parameters like taxation, productivity, and costs associated with labor markets, and aims to demonstrate the conditions required to achieve market equilibrium.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1f1874bf-4db6-459f-988b-8fa0a32e0b46%2F30deed2a-c643-4fcd-8c1e-68bccc506f70%2Ff37abkh_processed.png&w=3840&q=75)
Transcribed Image Text:**Economic Models and Equilibrium Analysis**
24. **Market Tightness in the Mortensen-Pissarides Model**
Consider the Mortensen-Pissarides model studied in class. Assume the wage, \( w \), is constant. The firms' profits are taxed at rate \( \tau \). The matching function is the same as the one used in class. The job destruction probability is \( s \), labor productivity is \( y \), and the cost to open a vacancy is \( k \). The market tightness in equilibrium is given by one of the following expressions:
a. \[
\left( \frac{(1 + \tau)(y - w)}{sAk} \right)^{1/2}
\]
b. \[
\left( \frac{stk(y - w)}{A} \right)^{1/2}
\]
c. \[
\frac{s(1 + \tau)(y - w)^2}{Ak}
\]
d. \[
(1 - \tau) \left( \frac{sA(y - w)}{k} \right)^{1/2}
\]
e. \[
\frac{A(1 - \tau)(y - w)^2}{sk}
\]
This set of expressions represents different formulations of market tightness in the model under consideration. Each option reflects different variables and parameters like taxation, productivity, and costs associated with labor markets, and aims to demonstrate the conditions required to achieve market equilibrium.
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