A country is about to let refugees in, but current residents are strongly against it. They are afraid that the wages of low-skilled workers will fall if there is an increase in the available workforce. It is estimated that the country can let in 35,00035,000 refugees, but only 60%60% of them are expected to look for a job. The wage elasticity of labor demand is −0.5−0.5. In the country’s labor market, there are 689,500689,500 low-skilled workers. Calculate the expected wage drop as a percentage, using the midpoint method. Enter your answer as a negative number in the box below and round to one decimal place throughout your calculations.
A country is about to let refugees in, but current residents are strongly against it. They are afraid that the wages of low-skilled workers will fall if there is an increase in the available workforce. It is estimated that the country can let in 35,00035,000 refugees, but only 60%60% of them are expected to look for a job. The wage elasticity of labor demand is −0.5−0.5. In the country’s labor market, there are 689,500689,500 low-skilled workers. Calculate the expected wage drop as a percentage, using the midpoint method. Enter your answer as a negative number in the box below and round to one decimal place throughout your calculations.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A country is about to let refugees in, but current residents are strongly against it. They are afraid that the wages of low-skilled workers will fall if there is an increase in the available workforce. It is estimated that the country can let in 35,00035,000 refugees, but only 60%60% of them are expected to look for a job. The wage
Calculate the expected wage drop as a percentage, using the midpoint method. Enter your answer as a negative number in the box below and round to one decimal place throughout your calculations.
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