"Consider the labor market in year 2021 but now assume that wages are totally rigid and cannot adjust during 2021. In this year business owners predict low sales for the years to come. As a result, they reduce labor demand. Draw the new equilibrium in a diagram and label it as point C. Use the following equations to find the new equilibrium: LD-70.000 w. LS-b+2w where b-10,000. What is the unemployment rate? Keep in mind that wages are totally rigid and use the diagram to help you understand what is going on. 43 percent 22 percent 20 percent None of the other options

"Consider the labor market in year 2021 but now assume that wages are totally rigid and cannot adjust during 2021. In this year business owners predict low sales for the years to come. As a result, they reduce labor demand. Draw the new equilibrium in a diagram and label it as point C. Use the following equations to find the new equilibrium: LD-70.000 w. LS-b+2w where b-10,000. What is the unemployment rate? Keep in mind that wages are totally rigid and use the diagram to help you understand what is going on. 43 percent 22 percent 20 percent None of the other options

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.12P

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12. "Consider the labor market in year 2021 but now assume that wages are totally rigid and cannot adjust during 2021. In this year business owners predict low sales for the years to come. As a result, they reduce labor demand. Draw the new equilibrium in a diagram and label it as point C. Use the following equations to find the new equilibrium: LD=70,000-w, LS=b+2w, where b=10,000. What is the new level of employment? Keep in mind that wages are totally rigid." 13. "Consider the labor market in year 2021 but now assume that wages are totally rigid and cannot adjust during 2021. In this year business owners predict low sales for the years to come. As a result, they reduce labor demand. Draw the new equilibrium in a diagram and label it as point C. Use the following equations to find the new equilibrium: LD=70,000-w, LS=b+2w, where b=10,000. What is the unemployment rate? Keep in mind that wages are totally rigid and use the diagram to help you understand what is going on."
Explain how equilibrium wages and employment change in the economy when there is an increase in the number of working-age immigrants. Be clear on the short-run and long-run response.
Please adjust the graph to show the impact of a recession, where the theoretical market equilibrium wage rate falls to $10/h. Then, answer the two questions assuming wages are sticky downward. Wage rate (per hour) 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0 0 S 1 2/ D 6 7 8 9 10 11 12 13 14 15 2 3 4 5 Labor quantity (in millions of workers) increase or decrease in unemployment After the effects of the recession are felt, what is the size of the increase or decrease in unemployment? S = What is the actual wage rate that predominates in the market? million people
Table 24.4 describes Santhers economy. Plot the AD/AS curves and identify the equilibrium. Would you expect unemployment in this economy to be relatively high or low? Would you expect prices to be a relatively large or small concern for this economy? Imagine that input prices fall and so AS shifts to the right by 150 units. Identify the new equilibrium. How will the shift in AS affect the original output, price level, and employment?
Consider an economy with the Cobb-Douglas production function: Y = 3K0.2L0.8 K = 140000; L=8000 Round answers to two places after the decimal when necessary. c. Now suppose that Congress, concerned about the welfare of the working class, passes a law setting a minimum wage that is 9 percent above the current equilibrium wage. Assuming that Congress cannot dictate how many workers are hired at the mandated wage, calculate what happens to the real wage, employment, output, and the total amount earned by workers. Real wages = $ Total output = d. Does Congress succeed in its goal of helping the working class? O Yes, Congress does succeed in its goal of helping the working class. units No, Congress does not succeed in its goal of helping the working class. Employment = Total earned by workers = $ workers e. Does this analysis provide a good way of thinking about a minimum-wage law? O No, this analysis does not provide a good way of thinking about a minimum-wage law. Yes, this analysis does…
Suppose that a consulting firm has generated the following information about the economy of Growville: (i) The current employment in export industries is 50,000; (ii) The current total employment in the city is 150,000; (iii) Export employment is expected to grow by 10,000 jobs. Is there enough information to accurately predict the effect of the increase in export employment on total employment? If you have enough information, predict the employment effect and illustrate your answer with a graph. If there is insufficient information, proceed with the analysis as far as you can and list the additional information you need to complete the analysis. Illustrate your answer with a graph.
Now consider the following economic conditions. (?) LRAS 140 130 SRAS 120 110 100 06 80 AD 70 60 60 65 70 75 80 85 90 95 100 OUTPUT Given the economic conditions depicted by the graph, answer the following questions. True or False: The economy is currently in long-run equilibrium. PRICE LEVEL
Given the input-output matrix Industry Oil 180 Final Demand Industry Health 240 120 Housing 144 Health 36 Oil 36 48 156 240 Housing Other 120 72 48 120 72 240 Suppose final demand changes to 77 for Health, 154 Oil, and 231 for Housing. Find the output matrix for the economy. (The entries are in billions of pesos).
onsider the economy described by the following equations: C = 1,600 + 0.9 (Y – T) I p = 800 G = 1,600 NX = 200 T = 1,600 Y* = 29,000 a. Complete the table shown below to find short-run equilibrium output. Consider possible values for short-run equilibrium output as they are given in the table below.Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. OutputY Planned aggregate expenditure (PAE) Y – PAE Y = PAE? 27,200 (Click to select) Yes No 27,400 (Click to select) No Yes 27,600 (Click to select) No Yes 27,800 (Click to select) No Yes 28,000 (Click to select) No Yes b. Short-run level of equilibrium output: c. What is the output gap for this economy? Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. The actual unemployment rate should…
Scenario 1 Suppose the marginal product of labor in the economy is given by MPN-200-0.5N, while the supply of labor is 300+8w Refer to Scenario 1. What is the equilibrium level of employment? ON-420 ON-380 ON-320 ON-120
Explain how equilibrium wages and employment change in the economy when there is an increase in thenumber of working-age immigrants. Be clear on the short-run and long-run response.b) Suppose that some of the immigrants set up businesses rather than become employees. Explain howyou expect this to affect the wage-setting curve, the price-setting curve and the labour market equilibrium.c) Answerbriey, do the results you have obtained in (a) and (b) suggest that immigration is good for theeconomy?
16. The input-output (million dollar) table for a two-sector economy is given as follows: |Input to sector AInput sector B Final Demand Total Output Output from Sector A Output from Sector B Other inputs Total Input 6 7 1 ? ? a. What is the basic assumption underlying the input- output model? b. Complete the above table (fill-entries denoted by ?). c. Write the matrix of technical coefficients. d. Calculate the total output required from each sector when the final demands are 12 and 9 respectively.