Consider a one-period closed economy, i.e. agents (consumers, firms and government) live for one period, consumers supply labor and demand consumption good, whereas firms supply consumption good and demand labor, and government finances an exogenous spending via lump-sum taxes. Suppose that representative consumer's preferences change, in that 7 goes up. Suppose that the government subsidizes employment. That is, the government pays the firm s units of consumption goods for each unit of labor the firm hires. Determine the effect of the subsidy on the firm's demand for labor: N“(w).

Consider a one-period closed economy, i.e. agents (consumers, firms and government) live for one period, consumers supply labor and demand consumption good, whereas firms supply consumption good and demand labor, and government finances an exogenous spending via lump-sum taxes. Suppose that representative consumer's preferences change, in that 7 goes up. Suppose that the government subsidizes employment. That is, the government pays the firm s units of consumption goods for each unit of labor the firm hires. Determine the effect of the subsidy on the firm's demand for labor: N“(w).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

E4.......2
QUESTION 1 For the production function Q - K0.2L0.3 and the budget 141 = 8K + 2L find the NEW LEVEL in the optimal employment of capital (K) after wages change by a factor of 0.7 = while maintaining the same level of output. Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 1.2, 1.14 = 1.1).
This exercise applies the basic Ricardian model of one factor and two goods. The table below contains the output per unit of labor in Foreign and Home for each of two goods. Use this information to answer the question that follows. attached in ss below thanks
Assume that we are in a long-run environment and a firm employs two groups of workers, medium-skilled and low-skilled (there is no capital used by this firm). Low-skilled workers are paid $7.25 per hour, whereas medium-skilled workers are paid $17. Assume that both groups of workers are normal inputs into the production process and the government increases the minimum wage to $15. Workers in the medium-skilled group are happy because they believe that the firm will increase their work hours now. Are the medium-skilled workers correct in their assessment? Explain why or why not. Do firms respond differently in the long run to a change in the minimum wage if minimum wage workers are considered normal inputs or inferior inputs into the production process? Fully explain your answer.
Please dont provide answer in handwritten solution...
Consider an economy with production function given by Y = AK0:5L0:5 where A is the total factorproductivity (TFP), K is the capital stock and L is the labor input. For simplicity assume capital is xed and equal to 1. Assume A=100.a. Write the rm's problem of choosing labor demand. Derive the demand for labor as a functionof the real wage.b. Assume labor supply is inelastic and xed at L= 100. Find the equilibrium values of the wageand the employment level for this economy. Display graphically the labor supply and the labordemand curves. Carefully label your graph.c. Suppose the economy faces a positive productivity shock and TFP is now A=200. Displaygraphically the new labor demand function. What are the equilibrium values of employment andthe real wage?d. Compute the total output when A=100 and when A=200. What is the output's growth rate?Compare that growth rate with the growth rate in A. How does the growth rate of output percapita compares to the growth rate in A? Explain…
please help solve this question
Please get correct.
QUESTION 1 For the production function Q = K0.1L0.1 and the budget 124 = 5K + 2L find the NEW LEVEL in the optimal employment of capital (K) after wages change by a factor of 0.5 while maintaining the same level of output. Please enter your response as a positive number with 1 decimal and 5/4 rounding (e.g. 1.15 = 1.2, 1.14 = 1.1).
Please get correct, means a lot. Super important.
Given the production function, Y = AK "L(¹-a) assume that a = 1/3. The labor supply equation is LS = 60*w - R In TABLE ONE, each column represents a labor market in medium-run equilibrium. In column two, an increase in on-the-job-search (OJS) has shifted labor supply to the right. In column three, workers' awareness of higher productivity has shifted labor supply back to the left. 1. Complete TABLE ONE. [Round w to two decimal places.] W = 2/3Y L TABLE ONE Y A K L W R (u) 1 (a) (b) 6000 398 8.23 (c) 21 2 5444 (d) 6000 (e) 8.54 70 (u) = Bw-L-R 3 5.3 6000 415 (h) 75 (1)
Please get correct. thank you