Explain why the reduction in employment would be less

Assignment Help Business Economics
Reference no: EM13741770

Most industrial farms hire migrant workers, so the market for such workers is reasonably taken to be perfectly competitive. Suppose that all farms individually have a short-run elasticity of labor demand of –0.5. In other words, if the wages of migrant workers in a local labor market rose by 10% (say, because many of those workers decided to work at a recently-opened nearby factory), the farms in the area would want to hire 5% fewer workers. Nevertheless, it is true that if the wages of migrant workers rose by 10% everywhere, employment of migrant workers would fall by less than 5 percent in the short run.

A. Explain why the reduction in employment would be less than 5 percent in the latter case.

B. In light of the short-run elasticity of demand for migrant workers, how easy do you think it would be for the industrial farms to replace the workers’ efforts by using the existing stock of farm machinery more intensely?

C. If the nationwide 10% wage increase were permanent, would the employment of migrant workers fall more in the short run or in the long run? Why?

Reference no: EM13741770

Questions Cloud

Implemented a farm savings plan called agriinvest : Agriculture and Agri-Food Canada implemented a farm savings plan called AgriInvest that would help farmers navigate ‘shallow losses’ (differences between revenues and expenses that are not extreme).
Explain how the quantity of money drastically declined : Explain how the quantity of money drastically declined after WWI and partly caused the Great Depression.
What was the workers marginal product last year : The HRB Corporation is the world’s only manufacturer of air filters for Zamboni engines. Last year, HRB charged $20 per filter and sold 1 million of them, and it paid all of its production workers $10 per hour. What was the workers’ marginal product ..
Present and future values-expected returns : We examined two important topics in finance this week: (a) present and future values and (b) security valuation.
Explain why the reduction in employment would be less : Most industrial farms hire migrant workers, so the market for such workers is reasonably taken to be perfectly competitive. Suppose that all farms individually have a short-run elasticity of labor demand of –0.5. Explain why the reduction in employme..
Using the existing stock of farm machinery more intensely : Explain why the reduction in employment would be less than 5 percent in the latter case. In light of the short-run elasticity of demand for migrant workers, how easy do you think it would be for the industrial farms to replace the workers’ efforts by..
What does treasure of the sierra madre tell about americans : What does The Treasure of the Sierra Madre tell us about Americans' sense of national identity, comparable to what we saw in John Steinbeck's work.
Define constitute a violation of the antitrust laws : In 2011, AT&T attempted a merger with T-Mobile. The Justice Department sued under the act, claiming that the merger would constitute a violation of the antitrust laws. In 2012, AT&T dropped its attempt at the acquisition.
Firms short-run demand for labor downward-sloping : Recall that the Law of Demand states that demand curves are always downward-sloping. That is, people want to buy more of some good when its price is lower. Why is a firm’s short-run demand for labor downward-sloping?

Reviews

Write a Review

Business Economics Questions & Answers

  Elucidate how each of the following people would talk about

Elucidate how each of the following people would talk about scarcity and trade-offs. The President of the United States and the leader of a developing nation.

  Savings rate needed to achieve golden rule level of capital

Assume the U.S. government implements a policy that achieves the savings rate needed to achieve the golden rule level of capital.

  Kaufmanns offers only an hourly wag

Kaufmann's offers only an hourly wage. Do you expect Kaufmann's hourly wage to be higher or lower than Farleigh's.

  Include any important points or conversions

Make sure to include any important points or conversions. Please provide a copy of the article when turning in the paper so it can be reviewed.

  How can you justify existence of government-granted monopoly

How can you justify existence of government-granted monopolies for such public utilities as local telephone service, natural gas.

  What is the equivalent present amount of prospective future

A petroleum engineer estimates that the present production of 400,000 barrels of oil during this year from a group of 10 wells will decrease at the rate of 15% per year for years 2 through 10. Oil is estimated to be worth $25 per barrel. If the inter..

  Independently negotiating pollution deductions

B involves the polluters in each region independently negotiating pollution deductions, assuming the other region is not undertaking pollution reduction.

  Q1 bobs lawn-mowing service is a competitive firm at the

q1. bobs lawn-mowing service is a competitive firm. at the current level of production the firm mows 10 lawns a day.

  Qbased on the production function parameter estimates

q.based on the production function parameter estimates reporteda. which industry or industries appears to exhibit

  Graph the old equilibrium price and quantity

During the last year, the demand for books has been falling. At the same time, some industry observers expected that several smaller book manufacturers might exit the market due to the strong competition imposed by Kindle. Use a demand and supply gra..

  1 explain the difference between the stackelburg and the

1. explain the difference between the stackelburg and the cournot duopoly models. outline the process by which a

  Describe the effect you have on this process when you visit

Discuss and describe the effect you have on this process when you visit the ATM to get some cash to pay for your late-night pizza.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd