Determine the reservation wage

Reference no: EM131659787

Dolph, Jimbo, and Kearney are the only individuals participating in the very particular labor market for 'protective' services.

Dolph's labor supply is given by H_D = -46 + 0.87424.w, where H is the hours worked per week and w is the hourly wage rate. Jimbo and Kearney's labor supply functions are represented by H_J = -35 + 1.42842.w and H_K = -39 + 1.32464.w, respectively.

a.) First, determine the reservation wage for each of these individuals, showing every step of your work.

Please round to the second decimal point.

b.) Second, if the market wage is $37, how many hours does each individual supply? And, at which wage rate would each individual supply 40 hours per week? Please round to the second decimal point.

c.) Third, provide the market labor supply equation.

Note that this is more difficult than it may initially seem, as the proper conditions need to be fully stated.

d.) Lastly, in a separate figure, graph the market labor supply curve, labeling everything you can.

Reference no: EM131659787

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