3. This question is about worker-employee matching. a) Explain and represent graphically why if there is only one employer and one employee than a binary choice between either a short work week with a low wage and a long one with a high wage cannot lead to a Pareto efficient equilibrium? b) What needs to happen to the setup of the bargaining between the employer and the worker for a Pareto efficient equilibrium to emerge? c) Explain why a binary choice between either a short work week with a low wage and a long one with a high wage can lead to Pareto efficient equilibria, as long as there are at least 2 workers and 2 employers, with each of the employers looking for exactly one worker. Will there are always be Pareto efficient equilibria in this case?
3. This question is about worker-employee matching. a) Explain and represent graphically why if there is only one employer and one employee than a binary choice between either a short work week with a low wage and a long one with a high wage cannot lead to a Pareto efficient equilibrium? b) What needs to happen to the setup of the bargaining between the employer and the worker for a Pareto efficient equilibrium to emerge? c) Explain why a binary choice between either a short work week with a low wage and a long one with a high wage can lead to Pareto efficient equilibria, as long as there are at least 2 workers and 2 employers, with each of the employers looking for exactly one worker. Will there are always be Pareto efficient equilibria in this case?
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 13P
Related questions
Question
100%
![3. This question is about worker-employee matching.
a) Explain and represent graphically why if there is only one employer and one
employee than a binary choice between either a short work week with a low
wage and a long one with a high wage cannot lead to a Pareto efficient
equilibrium?
b) What needs to happen to the setup of the bargaining between the employer
and the worker for a Pareto efficient equilibrium to emerge?
c) Explain why a binary choice between either a short work week with a low
wage and a long one with a high wage can lead to Pareto efficient equilibria,
as long as there are at least 2 workers and 2 employers, with each of the
employers looking for exactly one worker. Will there are always be Pareto
efficient equilibria in this case?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2c10af17-3c34-4f43-bc24-f68ca102ca70%2F3fb28b40-526b-4564-9eab-22e7a3ed72f4%2Fumb08l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3. This question is about worker-employee matching.
a) Explain and represent graphically why if there is only one employer and one
employee than a binary choice between either a short work week with a low
wage and a long one with a high wage cannot lead to a Pareto efficient
equilibrium?
b) What needs to happen to the setup of the bargaining between the employer
and the worker for a Pareto efficient equilibrium to emerge?
c) Explain why a binary choice between either a short work week with a low
wage and a long one with a high wage can lead to Pareto efficient equilibria,
as long as there are at least 2 workers and 2 employers, with each of the
employers looking for exactly one worker. Will there are always be Pareto
efficient equilibria in this case?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![Principles of Microeconomics](https://www.bartleby.com/isbn_cover_images/9781305156050/9781305156050_smallCoverImage.gif)
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![Principles of Microeconomics](https://www.bartleby.com/isbn_cover_images/9781305156050/9781305156050_smallCoverImage.gif)
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning