Suppose that a Labour Market determines the Quantity of Labour (L) as functions of the wage rate (w), according to the following Supply and Demand functions: Supply: L = w Demand: L=210 - 2w 9. [2 points] What is the free-market wage rate (w*) and Labour quantity (L*)? Now suppose that the Labour Force forms a union, and collectively bargains to a price floor of W = $80. 10. [3 points] What would be the Labour Decline and the Unemployment caused by this union policy? 11. [2 points] Who wins and who loses from this union policy? Suppose now that this union finds a way to push out the Demand for Labour to reduce this Labour Decline. 12. [3 points] How much does the union need to increase the Demand function by in order to reduce this Labour Decline to zero?
Suppose that a Labour Market determines the Quantity of Labour (L) as functions of the wage rate (w), according to the following Supply and Demand functions: Supply: L = w Demand: L=210 - 2w 9. [2 points] What is the free-market wage rate (w*) and Labour quantity (L*)? Now suppose that the Labour Force forms a union, and collectively bargains to a price floor of W = $80. 10. [3 points] What would be the Labour Decline and the Unemployment caused by this union policy? 11. [2 points] Who wins and who loses from this union policy? Suppose now that this union finds a way to push out the Demand for Labour to reduce this Labour Decline. 12. [3 points] How much does the union need to increase the Demand function by in order to reduce this Labour Decline to zero?
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 13P
Related questions
Question
![Suppose that a Labour Market determines the Quantity of Labour (L) as functions of the wage
rate (w), according to the following Supply and Demand functions:
Supply: L = w
Demand: L=210 - 2w
9. [2 points] What is the free-market wage rate (w*) and Labour quantity (L*)?
Now suppose that the Labour Force forms a union, and collectively bargains to a price floor of
W = $80.
10. [3 points] What would be the Labour Decline and the Unemployment caused by this union
policy?
11. [2 points] Who wins and who loses from this union policy?
Suppose now that this union finds a way to push out the Demand for Labour to reduce this
Labour Decline.
12. [3 points] How much does the union need to increase the Demand function by in order
to reduce this Labour Decline to zero?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F89c5a593-d93b-4074-bd97-e89bfb57a867%2F57ab45e7-7c85-434f-b2a2-a7418450eefa%2Fz2kc81_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose that a Labour Market determines the Quantity of Labour (L) as functions of the wage
rate (w), according to the following Supply and Demand functions:
Supply: L = w
Demand: L=210 - 2w
9. [2 points] What is the free-market wage rate (w*) and Labour quantity (L*)?
Now suppose that the Labour Force forms a union, and collectively bargains to a price floor of
W = $80.
10. [3 points] What would be the Labour Decline and the Unemployment caused by this union
policy?
11. [2 points] Who wins and who loses from this union policy?
Suppose now that this union finds a way to push out the Demand for Labour to reduce this
Labour Decline.
12. [3 points] How much does the union need to increase the Demand function by in order
to reduce this Labour Decline to zero?
Expert Solution
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
Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning