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Under which of the following circumstances would a positive bargaining gap occur:
a) A downward shift of the wage-setting curve.
b) Downward pressure on the level of employment in an economy.
c) An upward shift in the price-setting curve.
d) An upward shift of the wage-setting curve.
e) None of the above options are correct.
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- The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City. In a labor market, workers supply their labor to the market in exchange for wages, and their behavior is represented by the supply curve. Similarly, firms pay wages to obtain labor, and thus their behavior is represented by the demand curve. In this way, wages are the price of labor. (a). For each of the wages listed in the following table, determine the quantity of labor demanded, the quantity of labor supplied, and the direction of pressure exerted on wages in the absence of any price controls. (b). True or False: A minimum wage above $10 per hour is a binding minimum wage in this market. (Hint: Economists call a minimum wage that prevents the labor market from reaching equilibrium a binding minimum wage.)Please align the letter with the closest related scenario that would allow for a similar action to occur in the shifting of the supply or demand curves as shown below. Improved technology in current product that the market was anxiously awaiting. ________ Vehicles increasing MPG from 20MPG to 40MPG, as it relates to gasoline usage. ________ Technology that allows for easier extraction of oil. ________ Increase in cost of materials to the seller. ________The equilibrium wage rate in an industry is determined by a) whether workers or management are better at negotiating. b) finding where the market supply curve indicates that the substitution effect and income effect of a wage increase are offsetting. c) the strength of the substitution effect relative to the elasticity of demand for labor. d) the intersection of the market demand curve for labor and the market supply curve for labor.
- The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City. In a labor market, workers supply their labor to the market in exchange for wages, and their behavior is represented by the supply curve. Similarly, firms pay wages to obtain labor, and thus their behavior is represented by the demand curve. In this way, wages are the price of labor. (a). Suppose a senator introduces a bill to legislate a minimum hourly wage of $8. This type of price control is called a ________ (options: price ceiling, quota, tax, price floor). (b). For each of the wages listed in the following table, determine the quantity of labor demanded, the quantity of labor supplied, and the direction of pressure exerted (upward or downward) on wages in the absence of any price controls. Wage (dollars per hour) Labor demanded (thousands of workers) Labor supplied (thousands of workers) Surplus or shortage of labor Pressure on wages (downward or upward) 14…(6, Katrina Decreases Labor Supply Consider the effects of a natural disaster like hurricane Katrina on a metropoli- tan economy. In the initial (prehurricane) equilibrium, total employment in the metropolitan area is 500,000 workers and the daily wage is $100. The price elasticity of supply of labor is 4.0 and the price elasticity of demand for labor is -1.0. Suppose the hurricane reduces labor supply (a horizontal shift of the supply curve) by 100,000 workers. a. Use a supply-demand graph of the urban labor market to show the effects of the hurricane. b. The equilibrium wage [increases, decreases] by percent (to $. computed as.... c. The equilibrium employment [increases, decreases] by workers), computed as.... (to d. The reduction in the equilibrium employment is [greater, less] than the ini tial decrease in labor supply because. ... percentSince the early 1970’s, the U.S. government has had a program called the Earned Income Tax Credit. A simplified version of this program works as follows: The government subsidizes your wages by paying you 50% in addition to what your employer paid you but the subsidy applies only to the first $60 (per day) you receive from your employer. If you earn more than $60 per day, the government gives you only the subsidy for the first $60 earned but nothing for anything additional you earn. For instance, if you earn $100 per day, the government would give you 50% of the first $60 you earned — or $30. Suppose you consider workers 1 and 2. Both can work up to 10 hours per day at a wage of $10 per hour, and after the policy is put in place you observe that worker 1 works 7 hours per day while worker 2 works 5 hours per day. Assume throughout that Leisure is a normal good. (a) Illustrate these workers’ budget constraints with and without the program. (b) Can you tell whether the program has…
- In the last 20 years, the copper market has undergone major changes. On the one hand, there have been important technological improvements aimed at increasing process productivity and, on the other hand, there has been a strong increase in demand, especially from emerging countries. Which of the following alternatives corresponds to what is explained in the text above?I. Explain that demand has increased more than supply has decreased for the period studied.II. The equilibrium price and quantity traded increased for the period studied.III. Demand increased by a greater magnitude than the increase in supply for the period studied.Select one:a. I and IIIb. I and IIc. I, II and IIId. III onlye. Only I Note: indicate in case your option is not among alternativesHow will each of the following affect the demand for resource A, which is being used to produce commodity Z? Where there is any uncertainty as to the outcome, specify the causes of that uncertainty. A technological improvement in the capital equipment with which resource A is combined.At a price of $2.28 per bushel, the supply of a certain grain is 7100 million bushels and the demand is 7700 million bushels. At a price of $2.35 per bushel, the supply is 7500 million bushels and the demand is 7600 million bushels. (A) Find a price-supply equation of the form p = mx +b, where p is the price in dollars and x is the supply in millions of bushels. (B) Find a price-demand equation of the form p=mx+b, where p is the price in dollars and x is the demand in millions of bushels. Р (C) Find the equilibrium point. (D) Graph the price-supply equation, price-demand equation, and equilibrium point in the same coordinate system. (A) The price-supply equation is p = (Type an exact answer.) (B) The price-demand equation is p =. (Type an exact answer.) (C) The equilibrium point is. (Type an ordered pair. Type an exact answer. Use integers or decimals for any numbers in the expression.) (D) Choose the correct graph below. O A. Ap 3- 2- 7000 8000 Q O B. Ap 7000 8000 Q O C. 3 Ap 7000…
- Suppose both buyers and sellers now expect that the price of homes will increase in the future (because "housing prices always go up!"). In terms of the predicted effects these expectations have on the equilibrium allocation today, which of the following must be true? (check all that apply) the equilibrium price of housing will decrease today in response to these expectations the equilibrium quantity of housing will increase today in response to these expectations the equilibrium quantity of housing will decrease today in response to these expectations the equilibrium price of housing will increase today in response to these expectationsConsider Ann, who has a project that would be worth $270 to her if performed by a hard worker and $70 if performed by a loafer, but that she cannot do herself. She considers hiring Bob to perform the task. If hired, Bob’s utility is given by: U(w,a) = w1/2 – a where w is the wage Bob receives and a = 5 if bob works hard on the project and a = 0 if Bob loafs on the job. Furthermore, bob would rather sit at home where he obtains a utility of 9, if he can’t do at least that well on the job. A. What is the smallest wage Ann can offer that will get Bob to accept the job? At that wage will Bob work hard or loaf? Why? Will Ann hire Bob at this wage? Explain. B. What is the smallest wage Ann can offer that will make it worth Bob’s while to accept the job and work hard? If she makes an unconditional offer to Bob at that wage is he likely to work hard? Explain. C. What kind or contract might Ann offer that would end up with Bob being hired and Ann benefiting? What problems might there be…THIS IS FOR MATHEMATICAL ECONOMIC CLASS Question (2): The market for disposable cell phones: Q = 2300 – 16p and Q = 1850 + 14p. Find the equilibrium price and quantity. Suppose that a new technology has emerged that will enable firms to mass produce the cell phones at a reduced cost. Which curve will be affected and what will be the general outcome? Going back to question (b), if the new equilibrium price of a disposable cell phone is $11.25, how many disposable cell phones will be demanded by consumers? Derive the new function based on your analysis.
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