In: Economics
(a) Covid-19 pandemics has caused disruptions in economic
activities in most
affected countries. One of the worst effects is the increase in
unemployment.
(i) Explain one recovery measure that can help ease the
unemployed
workers.
(ii) Using the Beveridge curve and WS-PS model, explain the impact
of the
recovery measure during the downturn on economy’s vacancy and
unemployment rate.
(b) (i) Discuss why a firm pays higher wages to its workers as
compared to the
other similar firms in the market.
(ii) Using an efficiency wage model, derive the optimal wage
equation and
explain factors affecting it.