Consider an economy that consists of a union and non-union sector. The labour demand in each sector is given by: E=600-25W The total supply of labour is 700 workers, and it does not depend upon the wage. Labour and jobs are homogeneous in both sectors. What is the market-clearing wage if both sectors are competitive? How many workers are employed in both sectors?
Consider an economy that consists of a union and non-union sector. The labour demand in each sector is given by: E=600-25W The total supply of labour is 700 workers, and it does not depend upon the wage. Labour and jobs are homogeneous in both sectors. What is the market-clearing wage if both sectors are competitive? How many workers are employed in both sectors?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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- Consider an economy that consists of a union and non-union sector. The labour demand in each sector is given by:
E=600-25W
The total supply of labour is 700 workers, and it does not depend upon the wage. Labour and jobs are homogeneous in both sectors.
What is the market-clearing wage if both sectors are competitive? How many workers are employed in both sectors?
Suppose a
What is the union wage gap in part (b)? What would the union wage effect be if one controlled for the spillover effect?
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