Discuss the five important labor market trends and its effect on labor productivity.

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Answer 1

Question

Chapter 8, Problem 1RQ

To determine

Discuss the five important labor market trends and its effect on labor productivity.

Expert Solution & Answer

Explanation of Solution

There are five important trends in labor market. These are classified into two groups as trends in real wages and trends in employment and unemployment. The five trends are follows:

Extensive growth in real wage rate over the twentieth century.
Decreasing trend in real wage rate since the early 1970.
An increase in wage inequality in U.S.
Decreasing trend in the rapid employment growth in past 50 years.
High rates of unemployment in European countries during the past three decades.

Among these trends, the first three come under the category of trends in real wage and the remaining two comes under the category of trends in employment and unemployment. Extensive growth in real wage represents an increase in labor productivity and as a result, the demand for labor exceeds the supply of labor. A fall in real wage reduces labor productivity and the demand for and supply of labor grew equally. An increase in real wage among higher labor productivity increases the living standard of people. On the other hand, an increase in real wage for some workers increase the wage inequality while, in European countries potential laborers have been sidelined by a higher rate of unemployment.

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2. a) Consider a market where one firm (firm 1) currently produces, but a second firm (firm 2) is intending to enter and sell an identical product. The market has inverse demand given by p = 40 – Q, where Q is the total output sold in the market. Firm 1 has a marginal cost of 16 and firm 2 has a marginal cost of c < 16, with no fixed cost for either firm. Firm 2 has a choice of competing on price or quantity, with firms making their choices simultaneously (i.e. the market will be either a Bertrand or Cournot duopoly). If you were advising firm 2 on entering this market, how would you advise it to compete? To what extent would the size of firm 2’s cost advantage affect your advice? b) Now assume that firm 2 is aware that other firms are considering entering the market, so the market may over time change from a duopoly to an oligopoly with more than two firms. This would not change the nature of competition (i.e. any additional firms would set price or quantity in line with the first…

Answer 2

Question

Chapter 8, Problem 1RQ

To determine

Discuss the five important labor market trends and its effect on labor productivity.

Expert Solution & Answer

Explanation of Solution

There are five important trends in labor market. These are classified into two groups as trends in real wages and trends in employment and unemployment. The five trends are follows:

Extensive growth in real wage rate over the twentieth century.
Decreasing trend in real wage rate since the early 1970.
An increase in wage inequality in U.S.
Decreasing trend in the rapid employment growth in past 50 years.
High rates of unemployment in European countries during the past three decades.

Among these trends, the first three come under the category of trends in real wage and the remaining two comes under the category of trends in employment and unemployment. Extensive growth in real wage represents an increase in labor productivity and as a result, the demand for labor exceeds the supply of labor. A fall in real wage reduces labor productivity and the demand for and supply of labor grew equally. An increase in real wage among higher labor productivity increases the living standard of people. On the other hand, an increase in real wage for some workers increase the wage inequality while, in European countries potential laborers have been sidelined by a higher rate of unemployment.

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Answer 3

Question

Chapter 8, Problem 1RQ

To determine

Discuss the five important labor market trends and its effect on labor productivity.

Expert Solution & Answer

Explanation of Solution

There are five important trends in labor market. These are classified into two groups as trends in real wages and trends in employment and unemployment. The five trends are follows:

Extensive growth in real wage rate over the twentieth century.
Decreasing trend in real wage rate since the early 1970.
An increase in wage inequality in U.S.
Decreasing trend in the rapid employment growth in past 50 years.
High rates of unemployment in European countries during the past three decades.

Among these trends, the first three come under the category of trends in real wage and the remaining two comes under the category of trends in employment and unemployment. Extensive growth in real wage represents an increase in labor productivity and as a result, the demand for labor exceeds the supply of labor. A fall in real wage reduces labor productivity and the demand for and supply of labor grew equally. An increase in real wage among higher labor productivity increases the living standard of people. On the other hand, an increase in real wage for some workers increase the wage inequality while, in European countries potential laborers have been sidelined by a higher rate of unemployment.

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Answer 4

Question

Chapter 8, Problem 1RQ

To determine

Discuss the five important labor market trends and its effect on labor productivity.

Expert Solution & Answer

Explanation of Solution

There are five important trends in labor market. These are classified into two groups as trends in real wages and trends in employment and unemployment. The five trends are follows:

Extensive growth in real wage rate over the twentieth century.
Decreasing trend in real wage rate since the early 1970.
An increase in wage inequality in U.S.
Decreasing trend in the rapid employment growth in past 50 years.
High rates of unemployment in European countries during the past three decades.

Among these trends, the first three come under the category of trends in real wage and the remaining two comes under the category of trends in employment and unemployment. Extensive growth in real wage represents an increase in labor productivity and as a result, the demand for labor exceeds the supply of labor. A fall in real wage reduces labor productivity and the demand for and supply of labor grew equally. An increase in real wage among higher labor productivity increases the living standard of people. On the other hand, an increase in real wage for some workers increase the wage inequality while, in European countries potential laborers have been sidelined by a higher rate of unemployment.

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Answer 5

Chapter 8, Problem 1RQ

To determine

Discuss the five important labor market trends and its effect on labor productivity.

Expert Solution & Answer

Explanation of Solution

There are five important trends in labor market. These are classified into two groups as trends in real wages and trends in employment and unemployment. The five trends are follows:

Extensive growth in real wage rate over the twentieth century.
Decreasing trend in real wage rate since the early 1970.
An increase in wage inequality in U.S.
Decreasing trend in the rapid employment growth in past 50 years.
High rates of unemployment in European countries during the past three decades.

Among these trends, the first three come under the category of trends in real wage and the remaining two comes under the category of trends in employment and unemployment. Extensive growth in real wage represents an increase in labor productivity and as a result, the demand for labor exceeds the supply of labor. A fall in real wage reduces labor productivity and the demand for and supply of labor grew equally. An increase in real wage among higher labor productivity increases the living standard of people. On the other hand, an increase in real wage for some workers increase the wage inequality while, in European countries potential laborers have been sidelined by a higher rate of unemployment.

Answer 6

Chapter 8, Problem 1RQ

To determine

Discuss the five important labor market trends and its effect on labor productivity.

Expert Solution & Answer

Explanation of Solution

There are five important trends in labor market. These are classified into two groups as trends in real wages and trends in employment and unemployment. The five trends are follows:

Extensive growth in real wage rate over the twentieth century.
Decreasing trend in real wage rate since the early 1970.
An increase in wage inequality in U.S.
Decreasing trend in the rapid employment growth in past 50 years.
High rates of unemployment in European countries during the past three decades.

Among these trends, the first three come under the category of trends in real wage and the remaining two comes under the category of trends in employment and unemployment. Extensive growth in real wage represents an increase in labor productivity and as a result, the demand for labor exceeds the supply of labor. A fall in real wage reduces labor productivity and the demand for and supply of labor grew equally. An increase in real wage among higher labor productivity increases the living standard of people. On the other hand, an increase in real wage for some workers increase the wage inequality while, in European countries potential laborers have been sidelined by a higher rate of unemployment.

Answer 7

Chapter 8, Problem 1RQ

To determine

Discuss the five important labor market trends and its effect on labor productivity.

Answer 8

Expert Solution & Answer

Explanation of Solution

There are five important trends in labor market. These are classified into two groups as trends in real wages and trends in employment and unemployment. The five trends are follows:

Extensive growth in real wage rate over the twentieth century.
Decreasing trend in real wage rate since the early 1970.
An increase in wage inequality in U.S.
Decreasing trend in the rapid employment growth in past 50 years.
High rates of unemployment in European countries during the past three decades.

Among these trends, the first three come under the category of trends in real wage and the remaining two comes under the category of trends in employment and unemployment. Extensive growth in real wage represents an increase in labor productivity and as a result, the demand for labor exceeds the supply of labor. A fall in real wage reduces labor productivity and the demand for and supply of labor grew equally. An increase in real wage among higher labor productivity increases the living standard of people. On the other hand, an increase in real wage for some workers increase the wage inequality while, in European countries potential laborers have been sidelined by a higher rate of unemployment.