Use a model for the labour market to answer the following question: d) Use graphs to show the difference between involuntary unemployment and voluntary unemployment and then explain your answer in words.

Use a model for the labour market to answer the following question: d) Use graphs to show the difference between involuntary unemployment and voluntary unemployment and then explain your answer in words.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter15: Macroeconomic Viewpoints: New Keynesian, Monetarist, And New Classical

Section: Chapter Questions

Problem 12E

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Economists use labor-market data to evaluate how well an economy is using its most valuable resource—its people. Two closely watched statistics are the unemployment rate and the employment–population ratio (calculated as the percentage of the adult population that is employed). Indicate what happens to the unemployment rate and the employment–population ratio in each of the following scenarios. Scenario Effect On... Unemployment Rate Employment–Population Ratio An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs. After an unsuccessful search, some laid-off workers quit looking for new jobs. Numerous students graduate from college and immediately begin new jobs. Advances in health care prolong the lives of many retirees.
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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= 22 - 3LD Supply: w=4+3LS 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. C Wage ($ per hour) 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 0 Labour Market 2 3 4 1 Labour (thousands of hours per month) + 5
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=24-3LD S Supply: w=6+3L 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. Wage ($ per hour) 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 0 Labour Market 2 3 4 Labour (thousands of hours per month) 5