Consider the following competitive labour market. There are many identical firms that can hire workers. Each firm produces the same output using a constant returns to scale tech- nology and the price of output is £1. The market determines a wage level w for labour. Let O denote the number of units of output (equal to revenue) that a worker can produce. There is asymmetric information. Worker productivity levels are privately known, and are uni- formly distributed between 5 and 35. Let r(0) denote the reservation wage of an employee with productivity 0. More productive workers are more demanding, in the following sense. If 0 < 15, then r(0) = , but if 0 > 15 then r(0) = a) Derive the competitive equilibrium of this labour market. b) Suppose that, instead of a continuum of types, the labour force is comprised of equal amounts of only four types: 5, 10, 20, and 35. How would this change the results?

Consider the following competitive labour market. There are many identical firms that can hire workers. Each firm produces the same output using a constant returns to scale tech- nology and the price of output is £1. The market determines a wage level w for labour. Let O denote the number of units of output (equal to revenue) that a worker can produce. There is asymmetric information. Worker productivity levels are privately known, and are uni- formly distributed between 5 and 35. Let r(0) denote the reservation wage of an employee with productivity 0. More productive workers are more demanding, in the following sense. If 0 < 15, then r(0) = , but if 0 > 15 then r(0) = a) Derive the competitive equilibrium of this labour market. b) Suppose that, instead of a continuum of types, the labour force is comprised of equal amounts of only four types: 5, 10, 20, and 35. How would this change the results?

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Chapter1: Making Economics Decisions

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When workers move from one industry to another in response to demand changes, this is an example of Multiple Choice O factor mobility. the decreasing investment in human capital. capital stock. factor quality.
Quantity Wage Rate Supplied 1 2 3 4 5 $5 10 15 20 S5855 25 Refer to the given supply information facing a single firm in a particular labor market. This labor supply curve demonstrates that Multiple Choice O the firm is selling its output under imperfectly competitive conditions. the firm is selling its output under purely competitive conditions. higher wage rates must be paid to successive workers to overcome their higher opportunity costs. the firm is hiring labor under purely competitive conditions.
6. A worker with a marginal value product of can earn w, = k√e in self- employment. Marginal value products vary across the population according to the uniform distribution, i.e., 0~U[0, 2]. Firms cannot measure individual productivity, so all workers are paid a wage equal to the average of the marginal value products of those employed. & (a Find the condition for k under which every worker will choose self- employment. Also, find the condition for k under which all the workers will choose to be employed. Assume that k = 1. And, each worker can take a free test which can only te whether his marginal value product is in [0,1] or in [1,2]. Who will take the test and who will not? Also, who will be'self-employed and who will be employed? (c) Assume that k = 1. And, each worker can take a test at the expense of c which can reveal his marginal value product exactly. Who will take the test and who will not? Also, find the condition for c under which there exist some workers who will choose…
When talking about compensating wage differentials and the market for risky jobs, we assume that the marginal utility of risk is O positive O negative O zero
Suppose a firm’s technology requires it to hire 100 workers regardless of the wage level. The firm, however, has found that worker productivity is greatly affected by its wage. The historical relationship between the wage level and the firm’s output is given byWage Rate Units of Output$ 8.00 65$10.00 80$11.25 90$12.00 97$12.50 102What wage level should a profit-maximizing firm choose? What happens to the efficiency wage if there is an increase in the demand for the firm’s output?
Consider a firm withd> 0, under all the assumptions we made in class. If W_F (1 + d) > W_M, then the firm will hire:●Only men●Only women●More women than men●More men than women●Equal numbers of men and women
Consider a two-sector economy that employs a total of 105 units of a single input, labor. Ny of these units are allocated to sector 1, where the wage is 90 for the top five workers in that sector and zero for all others. (Both the wage for the top workers and the number who receive that wage are invariant to changes in Ng) The remaining N2= 105 - Ngunits of labor serve in sector 2, where every worker receives a wage of 10. All workers in sector 1 have an equal probability of being among the top five workers, 6/Ng. and all workers are risk neutral. Instructions: Round your answers to the nearest whole number. a. How many workers will work in sector 1? N1 = b. What will be the value of GNP for the economy? GNP = c. How would your answers differ if there were a 50% tax on the earnings of workers in sector 1? Workers in sector 1: GNP:
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Cowles Foundationfor Research in Economicsat Yale UniversityCowles Foundation Discussion Paper No. 2021ARE WE APPROACHING AN ECONOMIC SINGULARITY?INFORMATION TECHNOLOGY AND THE FUTUREOF ECONOMIC GROWTHWilliam D. NordhausSeptember 2015An author index to the working papers in theCowles Foundation Discussion Paper Series is located at:http://cowles.yale.edu/This paper can be downloaded without charge from theSocial Science Research Network Electronic Paper Collection:http://ssrn.com/abstract=2658259Electronic copy available at: http://ssrn.com/abstract=2658259Are We Approaching an Economic Singularity?Information Technology and the Future of Economic GrowthWilliam D. Nordhaus1September 1, 2015AbstractWhat are the prospects for long-run economic growth? The presentstudy looks at a recently launched hypothesis, which I label Singularity.The idea here is that rapid growth in computation and artificialintelligence will cross some boundary or Singularity after whicheconomic growth will…
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