Question
In: Economics
Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services...
Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services are described by these equations:
Lm=200-6Wm
Ls=100-4Ws
where L is labor (in number of workers), W is the wage (in dollars), and the subscripts denote the sectors. The economy has 100 workers who are willing and able to work in either sector.
If workers are free to move between sectors, what relationship will there be between Wm and Ws?
Suppose that the condition in part (a) holds and wages adjust to equilibrate labor supply and labor demand. Calculate the wage and employment in each sector.
Suppose a union establishes itself in manufacturing and pushes the manufacturing wage to $25. Calculate employment in manufacturing.
In the aftermath of the unionization of manufacturing, all workers who cannot get the highly-paid union jobs move to the service sector. Calculate the wage and employment in services.
Now suppose that workers have a reservation wage of $15—that is, rather than taking a job at a wage below $15, they would rather wait for a $25 union job to open up. Calculate the wage and employment in each sector. What is the economy’s unemployment rate?
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services...
Consider an economy with two sectors: manufacturing and
services. Demand for labor in manufacturing and services are
described by these equations: L m = 320 − 8 Wm ,L s = 150 − 4 W s
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dollars), and the subscripts denote the sectors. The economy has
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Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services...
Consider an economy with two sectors: manufacturing and
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??=1321–20??
??=1204–22??
where L is labor (in number of workers), W is
the wage (in pesos), and the subscripts denote the sector. The
economy has 500 workers who are willing and able to work in either
sector.
Since the number of workers employed cannot be
fractions and must be whole numbers, round answers for the values
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Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services...
Consider an economy with two sectors: manufacturing and
services. Demand for labor in manufacturing and services are
described by these equations:
Lm = 400 –
12Wm
Ls = 200 –
8Ws
where L is labor (in number of
workers), W is wage (in dollars), and the scripts denote the
sectors. The economy has 200 workers who are willing and able to
work in either sector.
If workers are free to move between sectors, what relationship
will there be between Wm...
Problem 1: Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services are described by these equations:
Problem 1: Consider an economy with two sectors: manufacturing
and services. Demand for labor in manufacturing and services are
described by these equations:Lm = 200 - 6WmLs = 100 - 4Ws where L is labor (in number of
workers), W is the wage (in dollars), and the subscripts denote the
sectors. The economy has 150 workers who are willing and able to
work in either sector.a. If workers are free to move between sectors, what
relationship will there be between...
22. Consider a labor market with two sectors denoted by A and B. The demand and...
22. Consider a labor market with two sectors denoted by A and
B.
The demand and supply curves for labor in sector A are given by
the equations
Demand: LD A = 20 − W,
Supply: LS A = W.
The demand and supply curves in sector B are given by the
equations
Demand: LD B = 40 − 2W,
Supply: LS B = 2W.
22a. Find the market-clearing wage and employment level in each
sector.
22b. Is it likely...
Consider an economy with two sectors: agriculture and production of computers. There are two factors used...
Consider an economy with two sectors: agriculture and production
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industries: labor, mobile between the industries, land specific to
agricultural production and capital specific to the production of
computers. This economy is involved in international trade and
workers spend most of their earnings on computers. Now assume that
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A.Both nominal and real wages...
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specific to agricultural production and capital specific to the
production of fidget spinners. This economy is involved
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agricultural products decreases and price of fidget spinners does
not change, then
A. Nominal wage of...
Consider an economy that produces manufacturing goods and R&D services with two types of high skilled...
Consider an economy that produces manufacturing goods and
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If there is a sudden spike in demand across different sectors of the economy, as consumers...
If there is a sudden spike in demand across different sectors of
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Question 10 options:
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Prices increase
Prices decrease
Real GDP decreases
For each scenario, identify the primary shift that
occurs.
Earlier this year, shortly before COVID...
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