Suppose that a Labour Market determines the Quantity of Labour (L) as functions of the wagerate (w), according to the following Supply and Demand functions:Supply: L = wDemand: L=210 - 2w9. [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 ofW = $80.10. [3 points] What would be the Labour Decline and the Unemployment caused by this unionpolicy?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 thisLabour Decline.12. [3 points] How much does the union need to increase the Demand function by in orderto reduce this Labour Decline to zero?

Ans. ) Given the question is based on the market of labor.The labor market can be defined as the…

Answered: Suppose that a Labour Market determines…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 13P

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Consider an economy that consists of a union and non-union sector. The labour demand in each sector is given by: E=600-25W The total supply of labour is 700 workers, and it does not depend upon the wage. Labour and jobs are homogeneous in both sectors. What is the market-clearing wage if both sectors are competitive? How many workers are employed in both sectors? Suppose a monopoly union sets the wage at the union sector at £12. How many workers will be employed in the union and nonunion sectors? What wage will the workers in nonunion sector receive? What is the union wage gap in part (b)? What would the union wage effect be if one controlled for the spillover effect?
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Answer the following questions based on the diagram below, in which Ij and I2 are the indifferent curves of labour union, Tị and n2 are the isoprofit curves, and DL is the labour demand curve. Wc is the wage rate in a perfectly competitive market. I2 Wc DL Qc Quantity of labour Wage rate
Consider the market for workers in a cafe. Labor demand equation: Ld=40-2*w Labor supply equation: Ls=4*w-32 w=hourly wage; Ls and Ld are in numbers of workers 1) Suppose that the workers in Café Alice think that their wages are too low and go on a strike. As a result, Cafe Alice agrees to increase the hourly wage to $14. How many workers will remain unemployed after the increase?
LABOR DEMAND, PART 1 Suppose output, Q, is produced by labor, L, and capital, K, according to the following function: Q = K ½ L½.. Suppose the firm sells each unit of output in a competitive market for a price P = $100. Suppose the firm hires each unit of labor in a competitive market for a wage W = $25. Suppose the firm has to make do for now with a stock of capital K = 49; moreover, suppose each unit of capital costs R = $75. A. How much labor will be demanded by the firm? Demonstrate and explain. B. At the "optimal" quantity of labor, what is the capital-to-labor ratio K/L? Demonstrate and explain. C. Utilizing the "optimal" quantity of labor, how much profit will the firm earn?
Time remaining: 01:59:36 Economics Operum is a firm that hires unskilled laborers in a perfectly competitive factor market. (a) Draw side-by-side graphs for the whole labor market and for Operum. Label the market supply SL, the market demand DL, the equilibrium wage WE, the equilibrium quantity QE, the wage paid by Operum WO, and the quantity hired by Operum QO. (b) Is WE greater than, equal to, or less than the marginal factor cost of unskilled labor at QO? Explain. (c) The government institutes an effective minimum wage for unskilled labor. Illustrate this on your graphs from part (a). Label the minimum wage WMin. On the graph for Operum, label the new quantity of unskilled labor employed QMin. (d) Ceteris paribus, how will the minimum wage from part (c) affect the market's demand for unskilled labor and its quantity demanded unskilled labor—will each increase, decrease, or stay the same? Explain. (e) Will the minimum wage cause the marginal revenue product of Operum's last…
Consider two states that adopt different laws concerning labor unions. The following graph shows the labor market in a state in the North. Initially, the market-clearing wage there is $8.00 per hour. Suppose that the legislature in this northern state passes laws that make it easy for workers to join a union. Through collective bargaining, the union negotiates a wage of $10.00 per hour. Use the graph input tool to help you answer the following questions. *Attached* Enter $10.00 into the box labeled Wage on the previous graph. Hint: Be sure to pay attention to the units used on the graph. At the union wage, _________ union workers will be employed. The following graph shows the labor market in a state in the South. The legislature in this state passes strong "right-to-work" laws that make it very difficult for unions to organize workers, so the wage is always equal to the market-clearing value. Except for this difference in legislation, the two states are very similar.…
Q2 Imagine there are 100 firms in a competitive product market who hire labour in a perfectly competitive labour market. Assume that the value of the marginal product of labour for a single firm is: VM Py = 10-4N Derive the market labour demand curve Nd. + Drag and drop an image or PDF file or click to browse... Q2 Suppose the labour supply curve is: NS = 10+ W Draw the labour market for this industry and calculate equilibrium. Q2 c Suppose the government institutes a payroll tax of $3 an hour on employers. How does the influence the labour market? Draw a diagram and calculate the new equilibrium. + Drag and drop an image or PDF file or click to browse... Q2 d Who actually pays the majority of this payroll tax? Why? + Drag and drop an image or PDF file or click to browse...
Look at Figure. In the union sector, the union’s ability to raise wages from Wn to Wu decreases total employment from N1 to N2. Thus N1 − N2 workers are displaced from the union sector and will seek employment in the nonunion sector. But suppose that wages in the nonunion sector cannot fall (perhaps because of a minimum wage law). Suppose, more specifically, that they are fixed at Wn in the nonunion sector. If the union and nonunion sectors are the only two sectors in the economy, how many workers will become unemployed because of the union’s ability to raise wages in the union sector? (Hint: N1 − N2 in the union sector is the same number of workers as N3 − N1 in the nonunion sector.) a. N1 . b. N2 . c. N3 . d. N1 − N2 . e. N1 + N2
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Consider a simple demand-and-supply model of a competitive labour market in a small town. The demand and supply curves for labour are given by Demand: w=20-4LD S Supply: w=4+4L` where w is the wage ($ per hour) and L is the number of hours of employment (measured in thousands of hours per month). a. Use the line drawing tool to plot the demand and supply curves in the graph at the right. Use points with labour hours value of 0 and 5 to draw the lines. Label the lines properly. Carefully follow the instructions above, and only draw the required objects. D Wage ($ per hour) 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0+ 0 Labour Market 1 2 3 4 Labour (thousands of hours per month) 5 ON

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