Q5. This question focuses on the price setting and wage setting relations.(a) Assume that the price setting equation is given by P =following values of the markup, u, calculate the real wage: p = 0.1, 0.2, 0.3, and 0.4.(1+) W. For each of theWhat happens to the real wage as u increases?(b) Suppose that all markets are perfectly competitive. What is the value of u when perfectcompetition exists? What will be the real wage paid by firms when all markets areperfectly competitive?==(c) Suppose that the markup of goods prices over marginal cost is 10% and the wagesetting equation is W = P(1 u); where u is the unemployment rate. What is the realwage, as determined by the price-setting equation? What is the natural rate ofunemployment?(d) Suppose that the markup of prices over costs increases to 20%. What happens to thenatural rate of unemployment? Explain the logic behind your answer.

PART a) PART b) PART c) PART d) As the markup increases from 10% to 20%, the price level P rises…

Answered: Q5. This question focuses on the price…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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E1 3. [Employment and Unemployment] Suppose a country has a working-age population of 500people. The demand and supply functions of its labor market are:w=300-0.5L w=60+0.1Lwhere w is the wage, L is the quantity of labor. The labor market has search friction so thatthose that are looking for a job may not immediately find one even when there are openings.Specifically, Assume the number of job matches (i.e. employment) is given by: 0.8L(a) Find the equilibrium wage and the actual number of employed people. Calculate thelabor force participation rate and unemployment rate. (b) The COVID-19 pandemic lowers the labor demand, and the new labor demand becomesw=240-0.5L. Assume that the wage can adjust quickly, find the equilibrium wage and theactual number of employed people during the pandemic. (c) Briefly explain in words, and with a specific example of each, the difference betweenstructural and frictional unemployment.
Q1: Suppose that the demand for the olives and supply of the olives both are declined by equal amountover some period of time. What you can conclude with this information? Explain and graphicallyshow the effect on equilibrium price and equilibrium quantity. Q1 B) Why is money not considered to be a capital resource in economics and why is entrepreneurialability considered to be a part of economic resource, distinct from labor? Please suggest two most important function of entrepreneurs? Q2: Danny “Dimes” Donahue is a neighborhood’s 9 year old entrepreneur. His most recent venture is sellinghomemade brownies that he bake himself. At price of $1.50 each he sells 100. At price $1.00 each he sells300. Is this demand elastic or inelastic in this range? If demand has the same elasticity for the price declinefrom $1.50 - $1.00, would cutting the price from $1.00 to $0.50 increase or decrease Danny’s total revenue.
Suppose that Congress passes a law which requires employers to provide employees some healthcare benefits that raises the cost to the employers by $5 per hour. a) What is the impact on the demand for labor? (Think quantitatively) b) If the employees value the benefit exactly equal to the cost, what will be the impact on the supply of labor? c) How will the law affect the wage and level of employment? Are the employers better off or worse off? Are the employees better off or worse off? d) Suppose before the implementation of the law, the wage in the market was $3 above the minimum wage. In this case, how the law will affect the wage and level of employment?
The demand for lobster is represented as follows, where Qis measured in pounds of lobster: Q, =100 – 75P+91P, – 80P. +25Y where P is the price per pound of lobster, Ps is the price per pound of shrimp, Pc is the price per dozen of corn ears, and Y is income, measured as the median hourly wage of consumers. Suppose that the price of a pound of shrimp is $10, the price of corn is $5 per dozen, and the median hourly wage for customers in this market is $25. Further, suppose that the current equilibrium price for lobster is $13 per pound. Find the equilibrium quantity demanded of lobster in this market. Now determine the following elasticities: price elasticity of demand for lobster; cross-elasticity of demand for lobster relative to shrimp; and income elasticity of demand for lobsters. Is demand for lobsters (relative to the price of shrimp) elastic, inelastic, or unit elastic? Based on the cross-elasticity of demand for shrimp you found, is shrimp a reasonably good substitute for…
Question 10 The equilibrium wage in a local labor market is $10 per hour. If a minimum wage of $15 per hour is imposed, which of the following will occur? O There will be a decrease in the quantity of labor supplied by households. O There will be an increase in the quantity of labor demanded by firms. O There will be an increase in unemployment. O All of the above will occur.
Consider the general supply function: Qs=60+5p-12Pl+10F Where Qs = quantity supplied, p = price of the commodity, pl = price of a key input in the production process, and F = number of firms producing the commodity. 1. Interpret the slope parameters on p, pl, ane F. 2. Derive the equation for the supply function when pI = $90 and F = 20. 3. Sketch the graph of the supply function in part b. At what price does the supply curve intersect the price axis? Give an interpretation of the price intercept of this supply curve. 4. Using the supply function from part b, calculate the quantity supplied when the price of the commodity is $300 and $500.
Why should a business owner be concern with the inflation rate in the Dairy products industry, and how might it have an impact on the Dairy products industry?
Use the following supply and demand equations: Pd-60 - 5Q Ps-20 + 30 +t Solve for P and Q as functions of t. Show your work. 60-SQ-2013Qrt Q-5-t y0-5Q=3Q+t Q=S-t.125 8Q-40-6 Write the derivative of P with respect to t.
Economics: Labor Economics Question: 1 Labor demand and supply of a market are given by w = 32 - 5Ed and w = 4 + 2Es. Please show work for each part. a.What is the equilibrium employment in this market? [a] b.What is the equilibrium wage in this market? [b] Question: 2 The marketplace is currently in equilibrium as indicated by the tangency condition shown below. Assume capital and labor are substitutes. Suppose technological improvements increase the productivity of capital but have no effect on the productivity of labor. In terms of its use of capital and labor what would you expect firms to do to re-establish equilibrium? (MPe/W) = (MPk/r) Thank you for your help and support Instructor Agent!
A new law requires employers to provide health benefits to all workers who are employed more than 10 hours per week. This law results in a $3 per hour increase in the cost of the equilibrium hiring workers. The law is likely to the demand for labor and wage paid to workers. O increase: decrease increase : increase decrease: decrease decrease: increase ASUS
The demand and supply schedules in this table list the quantity supplied and quantity demanded of steelworkers at different salaries. Provide your answer below: Annual Salary ($) 60000 40000 20000 Annual Salary $40,000 $45,000 $50,000 $55,000 $60,000 огсгт The highest and lowest points on the supply and demand curves have been plotted for you and are stationary. Using the demand and supply schedule provided above, move the other points on the graph to their correct coordinates to discover the equilibrium point where the demand curve of those employers who want to hire steelworkers intersects with the supply curve of those who are qualified and willing to work as steelworkers. 0 Demand and Supply of Steelworkers Quantity Demanded Demand 20, 000 15, 000 10, 000 (4000, 37-000) 5,000 0 (13000, 58000) (18000, 66000) Supply (11000, 50000) (6000, 27000) (13000, 32000) 20000 Quantity Supplied 10,000 15, 000 20, 000 40000 Quantity of Workers 25,000 30,000
V4. Suppose that you have the following information about the market for employees in your buisness: Supply: W=20+N Demand: W=40-N a. Suppose that the union negotiates a team size of only 5 employees. Draw this graphically and calculate the new equilibrium wage number of employees. b. Draw this graphically and calculate the equilibrium wage and number of employees hired.

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