Solve for the equilibrium of the labor market

Assignment Help Business Economics

Reference no: EM131424780

The parameters in this setup are a, l, and f. The parameter l represents the number of hours workers would supply to the market even if the wage were zero. It, therefore, reflects the inherent amount of time people like to work. The parameter f, on the other hand, reflects the amount of labor the firm would like to hire if the wage were zero. It might be thought of as some inherent capacity of the firm (perhaps because the firm owns a given amount of land and capital that cannot be altered). (a) What is the economic interpretation of a? (b) What are the endogenous variables in this model? (c) Solve for the equilibrium of the labor market. That is, solve for the endogenous variables as a function of the parameters of the model. (d) If l increases, what happens to the equilibrium wage and employment levels? Does this make sense?

Reference no: EM131424780

Questions Cloud

Monopoly in the operating system market : Many people say that Microsoft has a near monopoly in the operating system market, but argue that consumers are better off than if there were many competing operating systems. Why might they make such a claim?

Applying the expected utility formula : Can you please make a step by step on applying the Expected Utility Formula? The formula in the book is UTILITY of other Outcome= (p)(1)+(1-p)(0)=p. The example on the book (Quantitative Analysis for Management (11th)) is far simpler than this excerc..

Which of these is not a concept of the ecology of care : Thomas Hobbes, who is known as the father of the theory of social contract, believed that we subject ourselves to the community because: Which of these is not a secondary value of this lens? Which of these is not a concept of the ecology of care?

Some of companies that have now adopted that strategy : What are some of the factors that companies have learned which would have resulted in the transfer of operations from foreign locations back to the US? What are some of the companies that have now adopted that strategy? The United States has been des..

Solve for the equilibrium of the labor market : The parameters in this setup are a, l, and f. The parameter l represents the number of hours workers would supply to the market even if the wage were zero. It, therefore, reflects the inherent amount of time people like to work. What are the endogeno..

What types of exchange rate regimes may this describe : Refer to question one. Suppose we hold the nominal exchange rate constant now. Would we expect a real depreciation or appreciation of U.K.’s currency? Why? What types of exchange rate regimes may this describe?

How does this waiting suggest about supply and demand : In 2013 BusinessWeek Online reported that car sales in China had slowed and some car prices had dropped. The price cuts had had the unintended result of consumers waiting for deeper discounts. How does this waiting suggest about supply and demand?

What is the number of units of good : A consumer's utility is given by U(X,Y)=X^0.25*Y^0.75. (To be clear, ^ denotes exponentiation, so the utility function is X to the 0.25 power multiplied by Y to the 0.75 power.) Given this utility function, MUx=0.25X^(-0.75)*Y^0.75, and MUy=0.75X^0.2..

What is the total value of intermediate goods : An automobile manufacturer uses labor, capital, and a variety of intermediate goods in the production of cars. The car requires $4,000 of steel, $6,000 seats, $10,000 of electronics, $2,000 tires, $10,000 of labor, $5,000 of capital and has a 20% sal..

User Account

All Pages