Exercise 3 Consider the MPL is currently given by MPL=30/L. The supply of labor in the country is L=10. Consider that the current regulation requires a minimum real wage of 4. 1. What is the unemployment level ? What would be the unemployment level without the minimum wage? Is this a frictional or a structural unemployment? 2. Explain what frictional and structural unemployment are. Give some example and explain how would you address these issues if you were a policymaker.

Exercise 3 Consider the MPL is currently given by MPL=30/L. The supply of labor in the country is L=10. Consider that the current regulation requires a minimum real wage of 4. 1. What is the unemployment level ? What would be the unemployment level without the minimum wage? Is this a frictional or a structural unemployment? 2. Explain what frictional and structural unemployment are. Give some example and explain how would you address these issues if you were a policymaker.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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