Task 1 The salary curve is given by: W pe A. W (u, The price curve is given by: P = (1 + price surcharge) · marginal cost W A P = (1 +μ).. a) Explain how unemployment (u) and expected price level (P^e) affect nominal wages and expected real wages. Give an interpretation of the variable z ^ w? b) Draw both the price and wage curve in a diagram where real wages (W/P) are on the Y-axis and unemployment (u) is on the X-axis. Explain why the real wage in this

Task 1 The salary curve is given by: W pe A. W (u, The price curve is given by: P = (1 + price surcharge) · marginal cost W A P = (1 +μ).. a) Explain how unemployment (u) and expected price level (P^e) affect nominal wages and expected real wages. Give an interpretation of the variable z ^ w? b) Draw both the price and wage curve in a diagram where real wages (W/P) are on the Y-axis and unemployment (u) is on the X-axis. Explain why the real wage in this

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2 In The Hightower Lowdown (Voiume 12, Number 5, May 2010) you could read: 5 MILLION PEOPLE (about 10% of the workforce) are out of work • UNEMPLOYMENT IS HEAVILY SKEWED BY CLASS. Among the wealthiest 10% of American families (incomes above $150,000), only 3% are unemployed - a jobless rate that rises as you go down the income scale. Among the bottom 10%, more than 30% are out of work. [R178] What average unemployment rate for the middle 80% of families fits with the given values for the top and bottom 10% to work out to the overall (weighted) average unemployment rate of 10%?
Consider the labour market represented in the following graph: real wage W P equilibrium employment WS PS Employment rate Where WS represents the Wage Setting relationship, and PS represents the Price Setting relationship. Which of the following statements are INCORRECT? Changes in the marginal product of labour will change the equilibrium level of unemployment because it makes the wage setting (WS) curve shift. A non-labour related increase in cost of production, will shift the PS curve downwards. The PS curve is horizontal because changes in prices do not affect the rate employment in the economy. A positive demand shock that increases actual output will move the equilibrium employment to the right of the point E in the graph.
May i know the correct ans from 6-8. Thank you
(a) Explain the difference between the nominal wage and the real wage. Using a wage setting curve and a price setting curve illustrate how the real wage determines the equilibrium level of employment in the economy. (b) On a new diagram use a wage setting curve and a price setting curve to illustrate the change to the equilibrium level of employment if there is a reduction in the degree of competition faced by firms. Clearly state what will occur to the real wage and the level of unemployment.
6. "You mi ght as well say that the unemployment rate would be zero if everyone just quit looking for work." Explain what the author means by this.
Question 73 of 80 If a firm finds that, at its current level of employment, VMP > W, it will A. be minimizing profits. B. be maximizing profits. C. decrease the amount of labor it hires. D. increase the amount of labor it hires. 1
) Suppose there are two inputs in the production function-labor and capitaland that these two inputs are perfect substitutes. Suppose that the price of capital is 750 GHC per machine per week and that the weekly salary of each . worker is 300 GHC . i) Draw the isocost line ii) With the aid of a graph, explain the effect of a wage decrease on flrm-level employment and output holding initial cost ouday constant.
4. Consider the Keynesian Efficiency Wage Model.
1) Assume that the real wage in an economy is held above equilibrium. a. Graphically illustrate how an increase in demand for labor will change the number of unemployed workers. Be sure to label the axes and the quantities of labor hired before and after the increase in demand. b. Explain in words what happens to the number of unemployed as a result of this change. 2) In an economy, if 5 percent of the employed lose their job every month (s = 0.05) while 15 percent of the unemployed find a job every month (f = 0.15), what is the steady rate (equilibrium rate) of unemployment of the economy?
Book: MacroeconomicSteinar, holden, osloCappelen damm academic,2016
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