Contemporary Labor Economics
11th Edition
ISBN: 9781259290602
Author: Campbell R. McConnell, Stanley L. Brue, David Macpherson
Publisher: McGraw-Hill Education
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Chapter 1, Problem 2QS
To determine
Reason for scarcity of labours even though the economy is experiencing
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According to an article by the Wall Street Journal, the U.S. is at risk of running out of occupational therapists, railroad engineers, mathematicians, machinists and other workers. As a result, In the next 10 to 15 years, we expect U.S. employers to demand more labour than will be available, which will, in turn, constrain overall economic growth. On the top of that, U.S. president Donald J. Trump has put executive orders to ban nationals of selected countries from entering the U.S. Meanwhile, the top economic analysts and leaders believe that the country is going to strengthen and tighten its immigration polices to a much greater extent in the coming days.
a) Referring to the above extract, briefly state in a line what do you think will happen to the U.S. labour market.
b) With the help of appropriate diagrams, graphically show and briefly comment on what will happen to the U.S. real wage rate, labour hours and real GDP, due to the changes in the U.S. labour market that you stated in…
Roughly speaking, what fraction of U.S. labor works in factories? In service businesses? In government?
Explain whether each of the following is labor. Capital, or a natural resource. A)an unemployed factory worker. B) a college professor. C) the library building on campus. D) Yellowstone national park. E) an untapped deposit or natural gas. F) the local power plant.
Chapter 1 Solutions
Contemporary Labor Economics
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- Economics Suppose that there are drastic technological improvements in shoe production at Home such that shoe factories can operate almost completely with computer-aided machines.Consider the following data for the Home country: Computers: Sales revenue = ?c?? = 100 Payments to labor = ??? = 50 Payments to capital = ??? = 50 Percentage decrease in the price = ∆??⁄?? = 0% Shoes: Sales revenue = ???? = 100 Payments to labor = ??? = 5 Payments to capital = ??? = 95 Percentage increase in the price = ∆??⁄?? = 50% a. Which industry is capital intensive? Is this a realistic scenario (i.e., are some industries capital-intensive in some countries and labor- intensive in others)?b. Given the percentage changes in output prices above, calculate the percentage change in the rental on capital.c. How does the magnitude of this change compare with that of labor?d. Which factor gains in real terms, and which factor loses?arrow_forwardAt low levels of production, marginal productivity of labor increases as labor increases. At high levels of production, marginal productivity of labor decreases as labor increases. Are these two statements contradictory? Explain.arrow_forwardSuppose that a person's life is divided into two periods. A period of poor economic times, when this person earns $28 per hour of work, and a period of good economic times when they earn $42 per hour. The person cannot work more than 2000 hours in a single period, but they want to earn $107,000 total across both periods. What is the minimum number of hours this person needs to work total? Round your answer to two decimal places. Then take a second and thing about what is happening to GDP in each time period and connect the dots to Real Business Cycle Theory.arrow_forward
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