Labour supply Wage-setting curve Average product of labour Price-setting curve N Nx N. Employment, N The figure depicts the labour market when there has been a negative aggregate demand shock. Which of the following statements are correct? a. The derived demand for labour is Nx at X, and is Ng at B. b. The demand-deficient unemployment at B is NL - Ng. c. The equilibrium level of unemployment is NL - Ng. d. N - Nx and N - Ng are the levels of involuntary unemployment at X and B, respectively. Real wage

Labour supply Wage-setting curve Average product of labour Price-setting curve N Nx N. Employment, N The figure depicts the labour market when there has been a negative aggregate demand shock. Which of the following statements are correct? a. The derived demand for labour is Nx at X, and is Ng at B. b. The demand-deficient unemployment at B is NL - Ng. c. The equilibrium level of unemployment is NL - Ng. d. N - Nx and N - Ng are the levels of involuntary unemployment at X and B, respectively. Real wage

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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According to the theory of efficiency wages,a. firms may find it profitable to pay above-equilibrium wages.b. an excess supply of labor puts downward pressure on wages.c. sectoral shifts are the main source of frictional unemployment.d. right-to-work laws reduce the bargaining power of unions
Structural unemployment is the unemployment that arises ____________. A. when wage rigidity creates a persistent gap between labor supply and labor demand. B. from workers' imperfect information about available jobs. C. during recessions when the unemployment rate is above the natural rate. D. from the average of the unemployment rates over an extended period of time.
The Suppose the world price of tobacco falls significantly. The demand for labor among tobacco-producing firms in Kentucky will demand for labor among cigarette manufacturing firms in Virginia, which use tobacco as an input, will The temporary unemployment that results from sectoral shifts such as the ones describes above is best categorized as unemployment. Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply. Offering recipients of unemployment insurance benefits a cash bonus if they find a new job within a specified number of weeks Increasing the benefits offered to unemployed workers through the government's unemployment insurance program Establishing government-run employment agencies to connect unemployed workers to job vacancies
Task 1 The salary curve is given by: W A° •W (u, ре The price curve is given by: P = (1+ price surcharge) · marginal cost w P = (1+µ) · A a) Explain how unemployment (u) and expected price level (P ^ e) affect nominal wages and expected real wages. Give an interpretation of the variable z^ w? b) Draw both the price and wage curve in a diagram where real wages (W/ P) are on the Y-axis and unemployment (u) is on the X-axis. Explain why the real wage in this model is not dependent on unemployment [Hint: Expected price is not the same as actual price. P^e + P] c) Take the Values in b) as a starting point and explain what we mean by equilibrium and equilibrium unemployment in price and wage setting. d) How will these cases affect the equilibrium in problem c? 1) Increased unemployment benefits 2) Increased productivity
4. Consider the Keynesian Efficiency Wage Model.
Give typing answer with explanation and conclusion
1) Assume that the real wage in an economy is held above equilibrium. a. Graphically illustrate how an increase in demand for labor will change the number of unemployed workers. Be sure to label the axes and the quantities of labor hired before and after the increase in demand. b. Explain in words what happens to the number of unemployed as a result of this change. 2) In an economy, if 5 percent of the employed lose their job every month (s = 0.05) while 15 percent of the unemployed find a job every month (f = 0.15), what is the steady rate (equilibrium rate) of unemployment of the economy?
The natural rate of unemployment is: found by dividing total unemployment by the size of the labor force. that rate of unemployment occurring when the economy is at its potential output. lower than the full-employment rate of unemployment. O higher than the full-employment rate of unemployment.
The diagram on the right shows a perfectly competitive labour market. The initial equilibrium is with wage w* and employment L*. a. Suppose the demand for labour decreases to D'L. If wages are perfectly flexible, what is the effect on the wages and employment? If wages are perfectly flexible, wages will decrease decrease and employment will Use the point drawing tool to plot the new equilibrium point. Carefully follow the instructions above, and only draw the required object. Real Wage Part a Employment OU