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5. The labor market model (I): Suppose the following
equations characterize supply and demand in the
labor market model:
labor supply: L³ = 2 × w + 30
labor demand: Lª = 60 – w
Equilibrium occurs at an employment level L* and a
wage w*, so that the labor market clears. That is,
supply is equal to demand: L'= Lª
(a) What are the endogenous variables in the labor
market model?
(b) Solve for the equilibrium values of these
endogenous variables.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7b83038b-7d31-4661-bcc9-fddaa04a8a6b%2Fbecf4774-9c27-42d9-9c82-dfa0e4194617%2Fi6mwlxp_processed.png&w=3840&q=75)
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- The labor market model (II): Now we add some parameters to the labor market model: labor supply: Ls = × w + labor demand: Ld = - w The parameters in this setup are , , and . (Notice that parameters are denoted with an overbar, a convention we will maintain throughout the book.) The parameter represents the number of hours workers would supply to the market even if the wage were zero; it therefore reflects the inherent amount of time people like to work. The parameter , in contrast, reflects the amount of labor the firm would like to hire if the wage were zero. It might be thought of as some inherent capacity of the firm (perhaps because the firm owns a given amount of land and capital that cannot be altered). (a) What is the economic interpretation of ? (b) What are the endogenous variables in this model? (c) Solve for the equilibrium of the labor market. That is, solve for the endogenous variables as a function of the parameters of…help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingi Suppose that the economic model is wage = Bo+B₁exper+B₂exper² + ε. In the terminology of this class, is this a linear model? ii Suppose that the economic model is wage = 80+ experi Bo In the terminology of this class, is this a linear model? + E.
- Suppose that all social programs simultaneously become more generous. In particular, suppose that there is an increase in UI benefits, and also an increase in welfare benefits, which are represented in the two-sided search model as payments to everyone who is not in the labor force. What will be the effects on the unemployment rate, the vacancy rate, the labour force, the number of active firms, the aggregate output, and the labour market tightness? Draw the two-sided search model diagrams and explain the results and economics intuitions. Imagine you need to explain the mechanisms to your friends who do not seem to have learned the two-sided search model, so you may need to start with introducing key economic concepts very clearly. (Hints: for simplicity, assume the case when there is a uniform payment p to each person not in the labour force, and an increase by p in the employment insurance benefit.)The production function for an economy can be expressed as Y= F(K,L), where Y is real GDP, K is the quantity of capital in the economy, and L is the quantity of labor in the economy. If Y = K0.5 L0.5, what is real GDP if the quantity of capital is 900 and the quantity of labor is а. 400? b. What is/are the endogenous variable(s) in this model? What is/are the exogenous variable(s) in this model? с.Economics Consider the following one-period model. Consumer Utility function over consumption (C) and leisure (L) 1 1 U(C,L) = C2L2 Total hours: H = 40 Labour hours: NS = H-L Non-labour income: TT Lump-sum tax: T Hourly wage: W Firm Production function: Y = zF(Nd) = zNd Total factor productivitiy: z = 2 %3D Government Government spending (exogenous): G = 20 Suppose that the total factor productivity, z, increases to 4. What is the income effect of this wage change on labour supply(NS)? A. +6.89 B. +4.39 C. -6.89 O D. -4.39 O E. None of the above
- Consider a dynamic (two-period) macroeconomic model with a representative household, a representative firm, and a government. The representative household makes consumption- saving and labor supply decisions. The representative firm makes labor demand and invest- ment decisions. (a) Clearly write down the representative consumer's problem and the necessary assump- tions. (b) Clearly write down the representative firm's problem and the necessary assumptions. (c) Clearly definite the competitive equilibrium for this economy. (d) Derive (graphically) the output demand curve. State the necessary assumption(s).1. Given ln Qda = 2.35 – 0.12 ln Pa - 0. 25 ln Y + 0.18 ln Pb – 0.26 ln Pc, (all in logarithmic form), which of the following is correct? Note: Qda is the quantity demanded for product “a”, Pa is the price of product “a”, Pb is the price of product “b”, Pc is the price of product “c” and Y is the income, ln means natural logarithm. A. the demand for product “a” is price inelastic B. the demand for product “a” is price elastic C. a 1% increase in the Pa will cause a 0.12% decrease in the demand for product “a” D. A and C are correct E. B and C are correct 2. Given: ln Qda = 2.35 – 0.12 ln Pa - 0. 25 ln Y + 0.18 ln Pb – 0.26 ln Pc, (all in logarithmic form), which of the following is correct? The definition of the variables are found in #1. A. product “a” and product “b” are substitutes B. product “a” and product “b” are complementary C. a 1% increase in the Pb will increase the demand for “a” by 0.18% D. A and C are correct E. B and C are correct 3. Given: ln Qda = 2.35 – 0.12 ln Pa…Consider the simple (one period) production model. The production function is Cobb Douglas, exhibits constant returns to scale, and the exponent on capital equal to 0.25.
- Suppose the macroeconomic parameters are as follows in Turkey. Production: Y = A K1/3 L2/3 (A= 7 ) Factor supplies: K, L (K = 3000, and L= 1300) Government: 2200, Taxes: 2000 Consumer behavior C = 1000 + 0.6 (Y-T Investment behavior | = 3000 - 1000г Compute real interest rate in Turkey (Show the percentage value as numerical such as 15 for %15 or 0.15).A4Consider the simple (one-period) production model. The production function is Cobb-Douglas, exhibits constant returns to scale, and the exponent on capital equals 0.25. In year 2010, the economy's parameter values were A=50, K=600 and L=600? Compute the equilibrium wage. Pick the closest value. None of the other options Between 7 and 8 Between 15 and 18 Between 2.3 and 6.8 Between 12 and 13 Over the following decade, the economy experienced several flooding events that destroyed capital but, thankfully, did not kill people. As a result, in year 2020, the stock of capital has fallen to 300 (but the workforce remains unchanged). Compute the equilibrium wage in year 2020. Pick the closest value. Between 15 and 18 None of the other options Between 2.3 and 6.8 Between 12 and 13 Retween 7and 8