Efficiency wage theory suggests that workers will be paid less than their reservation wage. OA. O B. unskilled workers will have a lower turnover rate than skilled workers. O ,productivity might drop if the wage rate is too low. O D, the government can only set tax rates so high before people will prefer not to work. firms will be more resistant to wage increases as the labor market tightens. OE.

Efficiency wage theory suggests that workers will be paid less than their reservation wage. OA. O B. unskilled workers will have a lower turnover rate than skilled workers. O ,productivity might drop if the wage rate is too low. O D, the government can only set tax rates so high before people will prefer not to work. firms will be more resistant to wage increases as the labor market tightens. OE.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What would be the predicted impact on the labor market of a decrease in non-wage income, as well as an increase in the price of machines? a. An increase in equilibrium wage, and an indeterminate change in equilibrium quantity of labor. b. A decrease in equilibrium wage, and an indeterminate change in equilibrium quantity of labor. C. An indeterminate change in equilibrium wage, and an increase in equilibrium quantity of labor. O d. An indeterminate change in equilibrium wage, and a decrease in equilibrium quantity of labor.
Policymakers sometimes propose laws requiringfirms to give workers certain fringe benefits, such ashealth insurance or paid parental leave. Let’s considerthe effects of such a policy on the labor market.a. Suppose that a law required firms to give eachworker $3 of fringe benefits for every hour that theworker is employed by the firm. How does this lawaffect the marginal profit that a firm earns from eachworker at a given cash wage? How does the lawaffect the demand curve for labor? Draw your answeron a graph with the cash wage on the vertical axis.b. If there is no change in labor supply, how wouldthis law affect employment and wages?c. Why might the labor-supply curve shift inresponse to this law? Would this shift in laborsupply raise or lower the impact of the law onwages and employment?d. As discussed in Chapter 6, minimum-wage lawskeep the wages of some workers, particularlythe unskilled and inexperienced, above theequilibrium level. What effect would a fringebenefit mandate have…
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3. Why is there unemployment in a labor market with flexible wages? Explain.
In a perfectly competitive labor market, the worker will be paid: O Less than the value of his/her MRP. O Minimum wage. O More than the value of his/her MRP. O Exactly the value of his/her MRP.
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A country has two regions, the North and the South, which are identical in all respects except the hourly wage and the number of workers. The demand for labor in each region iswN = $20 - .5EN and wS = $20 - .5ESwhere EN and ES are millions of workers. Currently there are 6 million workers in the North and 18 million workers in the South.a. What is the wage in each region?b. If there are no shocks to the economy, migration over time will result in an equalization of wages and employment. What would be the long-run wage and employment level in each region?c. Return to the original setup where there are 6 million workers in the North and 18 million workers in the South. As a policymaker, you decide not only to allow 2 million immigrants of working age to enter your country, but you have the authority to resettle the immigrants wherever you want. How should you distribute immigrants across the regions to maximize the country’s immigration surplus? Besides maximizing the immigration surplus…
A certain amount of unemployment may be socially desirable because. O a Unemployed workers are able to benefit from employment insurance. Ob. A pool of unemployed workers drives down the average wage in the economy and keeps workers from becoming greedy Oc When some workers become unemployed, it provides a chance for others in the labour force to become employed Od. A pool of unemployed workers provides an incentive to those employed to remain productive. O e. The time the worker spends unemployed is valuable for finding the most appropriate match with firms
Referred to the above graph of the labor market. The government decides to impose a wage tax as shown on the graph. If the number of workers hired after the imposition of the tax is 800 then the total amount of tax is $___
The figure below represents the perfectly competitive market for pumpkins both before and after the imposition of a tax on suppliers, which is represented by the shift of the supply curve from Supply 1 to Supply 2. Price ($) 8.50 7.25 5.50 B 700 1,200 Supply 2 Supply 1 Demand Quantity of pumpkins Based on the figure above, who will pay a larger portion of the tax burden? a. Producers pay more of the tax burden than consumers b. Producers and consumers pay an equal amount of the tax burden C. Consumers pay more of the tax burden than producers d. There isn't enough information to determine the distribution of the tax burden