In the labour market, suppose one-half of the labour supply has high skills and the other half has low skills. This means that the short run labour supply curve is vertical for the highly skilled at 0.5. The demand for highly skilled workers is W=60-30F, where W is the wage premium to the skilled workers and F is the fraction of workers who are skilled. The wage premium is measured in percentages. If the demand for labour rises to W=80-30F, what is the new wage premium for skilled workers? O a. 75% Ob. 65% O c. 55% Od. 45%

In the labour market, suppose one-half of the labour supply has high skills and the other half has low skills. This means that the short run labour supply curve is vertical for the highly skilled at 0.5. The demand for highly skilled workers is W=60-30F, where W is the wage premium to the skilled workers and F is the fraction of workers who are skilled. The wage premium is measured in percentages. If the demand for labour rises to W=80-30F, what is the new wage premium for skilled workers? O a. 75% Ob. 65% O c. 55% Od. 45%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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