In the labour market, suppose one-half of the labour supply has high skills and the other half has low skills. This means that the short run labour supply curve is vertical for the highly skilled at 0.5. The demand for highly skilled workers is W=60-30F, where W is the wage premium to the skilled workers and F is the fraction of workers who are skilled. The wage premium is measured in percentages. If the demand for labour rises to W=80-30F, what is the new wage premium for skilled workers? O a. 75% Ob. 65% O c. 55% Od. 45%
In the labour market, suppose one-half of the labour supply has high skills and the other half has low skills. This means that the short run labour supply curve is vertical for the highly skilled at 0.5. The demand for highly skilled workers is W=60-30F, where W is the wage premium to the skilled workers and F is the fraction of workers who are skilled. The wage premium is measured in percentages. If the demand for labour rises to W=80-30F, what is the new wage premium for skilled workers? O a. 75% Ob. 65% O c. 55% Od. 45%
Chapter11: Labor Markets
Section: Chapter Questions
Problem 18SQ
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