Consider an economy in which the marginal product of labor, MPN, is:MPN 500 -2N, where N is the amount of labor used.he amount of labor supplied, NS, is given by:NS = 18 + 10w + 3T, where w is the real wage, and Tis a lump-sum tax levied on individuals.Suppose that T= 41.The equilibrium value of employment is(round your answer to two decimal places).The equilibrium value of the real wage is (round your answer to two decimal places).Suppose in this situation, the government passes minimum-wage legislation that requires firms to pay a real wage greater than or equal to $10Which of the following best explains the effect on the labor market?O A. The increase in the wage rate will cause the supply of labor to increase, and thus employment will increase.O B. The minimum wage is below the equilibrium wage, so there is no effect on the labor market.C. The wage rises to $10.88, the quantity of labor demanded increases, and employment increases.O D. The wage will rise to more than $10.88 due to the resulting shortage of labor, and thus there will be no unemployment.O E. The wage rises to $10.88, the quantity of labor demanded decreases, and there is now unemployment.

The equilbrium of the labor market is determined by the forces of demand and supply. The equilbrium…

Answered: onsider an economy in which the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

If a labour market is in equilibrium and contracts are incomplete: Employers are willing to hire any unemployed workers willing to work at reservation wages. Select one: O True False
What is the "intertemporal labor substitution" effect (also known as the "Uber" effect)? Although you can use with a numerical example to illustrate your answer, make sure you explain it with words.
Consider an economy with production function given by Y = AK0:5L0:5 where A is the total factorproductivity (TFP), K is the capital stock and L is the labor input. For simplicity assume capital is xed and equal to 1. Assume A=100.a. Write the rm's problem of choosing labor demand. Derive the demand for labor as a functionof the real wage.b. Assume labor supply is inelastic and xed at L= 100. Find the equilibrium values of the wageand the employment level for this economy. Display graphically the labor supply and the labordemand curves. Carefully label your graph.c. Suppose the economy faces a positive productivity shock and TFP is now A=200. Displaygraphically the new labor demand function. What are the equilibrium values of employment andthe real wage?d. Compute the total output when A=100 and when A=200. What is the output's growth rate?Compare that growth rate with the growth rate in A. How does the growth rate of output percapita compares to the growth rate in A? Explain…
In a country called Uncle Sam Land (USL), the labor demand curve is given by:W = K- 4LWhere W is the wage rate, K is a variabledetermined by accumulated capital stock in thecountry, and L is the labor force in the country.K= 50 is supplied by the capitalists.If the labor force in this country goes up from 10 to 11, what happens to the national income in USL?National Income = income of all workers + income of all capitalists.Select one:a. Does not changeb. Goes down by 44c. Goes up by 8d. Goes up by 26e. None of the above.
The United States has established a progressive income tax system, where a worker’s tax rate onearnings increases as she earns more money. There are 168 hours in a given week. Assume thatfor the first 56 hours worked, the tax rate is t1, which means that the net real wage is w*(1-t1).After working the 56th hour, the worker jumps to a higher tax rate t2. After the 112th hourworked, the individual jumps to an even higher tax rate, t3.(a) During most election years, some politicians argue that a having a flat tax system isbetter. Assume that there is a proposal to institute a flat tax, where all workers pay a taxrate equal to t4, which is greater than t3. On the same set of axes, graph the budgetconstraints associated with the progressive tax system and the flat tax system. Make sureto label all of the slopes.(b) Would moving to this proposed flat tax system likely encourage more or fewer hoursworked for relatively high-wage workers? Make sure to explain your answer (a writtenexplanation…
Suppose a firm’s technology requires it to hire 100 workers regardless of the wage level. The firm, however, has found that worker productivity is greatly affected by its wage. The historical relationship between the wage level and the firm’s output is given byWage Rate Units of Output$ 8.00 65$10.00 80$11.25 90$12.00 97$12.50 102What wage level should a profit-maximizing firm choose? What happens to the efficiency wage if there is an increase in the demand for the firm’s output?
Use the figure below to answer the following question. Real wage rate (2002 dollars per hour) 25 LS 20 15 10 LD LDo O 50 100 150 200 250 300 Labour (billions of hours per year) From the figure, as a result of the rightward shift in the demand curve for labour from LDO to LD1, potential GDP , -- and potential GDP per hour of labour 1) increases; increases 2) decreases; increases 3) increases; decreases 4) decreases; decreases 5) increases; does not change
Consider a two-sector economy that employs a total of 105 units of a single input, labor. Ny of these units are allocated to sector 1, where the wage is 90 for the top five workers in that sector and zero for all others. (Both the wage for the top workers and the number who receive that wage are invariant to changes in Ng) The remaining N2= 105 - Ngunits of labor serve in sector 2, where every worker receives a wage of 10. All workers in sector 1 have an equal probability of being among the top five workers, 6/Ng. and all workers are risk neutral. Instructions: Round your answers to the nearest whole number. a. How many workers will work in sector 1? N1 = b. What will be the value of GNP for the economy? GNP = c. How would your answers differ if there were a 50% tax on the earnings of workers in sector 1? Workers in sector 1: GNP:
onsider the following production function: q=96LK + 25L2 13 sume capital is fixed at K=25. what level of employment does the marginal product of labor equal zero? e marginal product of labor equals zero when %1 (Enter a numeric response using

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS