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 2 years 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
where L is labor (in number of workers), W is the wage (in
dollars), and the subscripts denote the sectors. The economy has
248 workers who are willing and able to work in either sector. If a
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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:
??=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
of employment to...
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
of computers. There are two factors used in the production of both
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
the world price of agricultural products increases and the price of
computers does not change, then
A.Both nominal and real wages...
Consider an economy with two sectors: agriculture and production of fidget spinners. There are two factors...
Consider an economy with two sectors: agriculture and production
of fidget spinners. There are two factors used in the production of
both industries: labor, mobile between the industries, land
specific to agricultural production and capital specific to the
production of fidget spinners. This economy is involved
international trade andworkers spend most of their earnings on
agricultural products. Now assume that the world price of
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
R&D services with two types of high skilled workers (Engineers
and Scientists) and one type of low-skilled workers. The production
technology for R&D services is high-skill-labor intensive,
while manufacturing is low-skill intensive. In the medium-run,
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the two sectors. In the long-run, however, all factors are mobile.
Suppose that this economy opens...
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Explain your working and answer in words
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
the economy, as consumers anticipate future shortages, what will
happen to prices and real GDP in the short run, if nothing else
occurs? ( <---That last phrase is important! This makes it not
exactly like what we've seen with COVID)
Question 10 options:
Real GDP increases
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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