EconomicsSlade and Meredith had each been earning $600 per week before losing their jobs at Nardel Solutions. Slade and Meredith live in states with replacement ratios of1:3 (i.e., 33.33%), but Meredith's state caps unemployment compensation at $100 per week. The table below represents their marginal benefit and marginal cost ofsearch assuming no unemployment compensation.Reservation WageMarginal Benefit($/week)Marginal Cost100700500150600450200500400250400350300300300350200250400100200With unemployment compensation, what is Slade's optimal reservation wage?O $600 per weekO $300 per weekO $250 per weekO $500 per week

A reservation wage is the lower wage rate at which a labor is willing to work. Labors will be…

lade and Meredith had each been earning $600 per week before losing their jobs at Nardel Solutions. Slade and Meredith live in states with replacement ratios of :3 (i.e., 33.33%), but Meredith's state caps unemployment compensation at $100 per week. The table below represents their marginal benefit and marginal cost of earch assuming no unemployment compensation. Reservation Wage Marginal Benefit ($/week) Marginal Cost 100 700 500 150 600 450 200 500 400 250 400 350 300 300 300 350 200 250 400 100 200 Vith unemployment compensation, what is Slade's optimal reservation wage? O $600 per week O $300 per week O $250 per week O $500 per week

lade and Meredith had each been earning $600 per week before losing their jobs at Nardel Solutions. Slade and Meredith live in states with replacement ratios of :3 (i.e., 33.33%), but Meredith's state caps unemployment compensation at $100 per week. The table below represents their marginal benefit and marginal cost of earch assuming no unemployment compensation. Reservation Wage Marginal Benefit ($/week) Marginal Cost 100 700 500 150 600 450 200 500 400 250 400 350 300 300 300 350 200 250 400 100 200 Vith unemployment compensation, what is Slade's optimal reservation wage? O $600 per week O $300 per week O $250 per week O $500 per week

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Thank you for the promptly response. My question is why would they demand a higher wage and lengthen their job search when they know their unemployment benefits will run out soon. My intution would be the person would lower their asking wage because they no longer have unemployment benefits and thus their job search would be shortened.
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