What happened to the elasticity of demand for american cars

Assignment Help Macroeconomics
Reference no: EM13319281

It can be shown that an industry’s demand for labor will become more elastic when the demand for the industry’s product becomes more elastic. Let’s consider the implications of this fact for the U.S. automobile industry and the auto workers’ union (the UAW).

a. What happened to the elasticity of demand for American cars when the Japanese developed a strong auto industry? What happened to the elasticity of demand for American autoworkers? Explain.

b. As the chapter explains, a union generally faces a tradeoff in deciding how much to raise wages, because a bigger increase is better for workers who remain employed but also results in a greater reduction in employment. How did the rise in auto imports from Japan affect the wage-employment tradeoff faced by the UAW?

c. Do you think the growth of the Japanese auto industry increased or decreased the gap between the competitive wage and the wage chosen by the UAW? Explain.

Reference no: EM13319281

Questions Cloud

Find the ultimate moment capacity according to aci : Given a reinforced concrete beam made with 3000psi concrete and grade 40 steel. The effective width is 12 inches, the beam depth is 24 inches and the reinforcement is 4#7 bars centered 2-1/2 inches
What matters more to bob and rita—the overall inflation : Let’s consider the effects of inflation in an economy composed only of two people: Bob, a bean farmer, and Rita, a rice farmer. Bob and Rita both always consume equal amounts of rice and beans. In 2000, the price of beans was $1, and the price of ric..
Determine the distance traveled before coming to a hault : an object of mass 1.00kg travels at 5.0m/s and enters a region of ice where the coefficient of friction is 0.10. determine the distance traveled before coming to a hault
Determine magitudes of horizontal and vertical reactions : If the man is always seated in an upright position, determine the magitudes of the horizontal and vertical reactions of the chair on the man at the instant \theta = 45^\circ. At this instant he has a speed of 6 {\rm m/s}
What happened to the elasticity of demand for american cars : What happened to the elasticity of demand for American cars when the Japanese developed a strong auto industry? What happened to the elasticity of demand for American autoworkers? Explain.
Determine what type of volcano is olympus mons : A-Olympus Mons, a 69,000-foot-tall mountain on Mars, is the largest volcano in the solar system. Its circumference at the base is large enough to cover almost the entire state of Colorado.
What are the three categories into which the bureau of labor : What are the three categories into which the Bureau of Labor Statistics divides everyone? How does it compute the labor force, the unemployment rate, and the laborforce participation rate?
Security plot above or below the security market line : Explain the importance of market efficiency for the assumed objective of maximizing shareholder wealth and does the security plot above or below the security market line (SML)?
Show the effect of an increase in the minimum wage : Using a diagram of the labor market, show the effect of an increase in the minimum wage on the wage paid to workers, the number of workers supplied, the number of workers demanded, and the amount of unemployment.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Assume that the price elasticity of demand for good

Assume that the price elasticity of demand for good. Describe how much consumption changes.

  Effect on interest rates and unemployment

Discuss how the Federal Reserve kept the United States from sliding into a deeper recession after September 11, 2001.

  What characteristic of demands is needed for bundling

An insurance company is considering issuing three types of fire insurance policies: (i) complete insurance coverage, (ii) complete coverage above and beyond a $10,000 deductible, and (iii) 90 percent coverage of all losses.

  What are the less conventional monetary policy tools

If the policy interest rate is near zero, what less conventional monetary policy tools might a central bank use to stimulate the economy? How do these tools work? In what way is central banking in the euro-zone area different from or similar to th..

  How high must the probability of being caught

Suppose the Lexington mayor caps the amount police can ne speeding motorists at $500. The police vow to step up enforcement in order to cintinue to deter speeding. How high must the probability of being caught speeding be in order to deter most pe..

  Airline decision to remain in business

Airway Express has evening flight from Los Angeles to New York with average of 80 passengers and return flight the next afternoon with average of 50 passengers. Should the airline remain in business?

  Do you support the proposed tax hike

How does this proposed tax hike affect the social cost of gasoline consumption in the short-run In the long-run d. Do you support this proposed tax hike If yes defend your position If not provide an alternative policy (Answer as an economists, n..

  Determine special but convenient case of linear demand

The demand schedule (or demand function or curve) for a good shows the total quantities (Q) that buyers are willing and able to buy at various prices (P) in some period of time. For example, here is a demand function illustrating the very special ..

  Describe some theories or explanations of why

Describe some theories or explanations of why the crime rate fell in the 1990. Murders are now on the rise again.

  To calculate the demand and supply elasticity

The market of laptops is given then take the range of values for the price from $1 to $30 and calculate corresponding demand and supply quantities.

  Calculate the economic growth rate

The approximate number of years it takes for real GOP pee person in Japan (0 double if the real GDP economic growth rate returns to 3 percent a year and the population growth race is maintained

  Illustrate what measures can the indian government

Illustrate what measures can the Indian government, international organizations, the mulitinationals take to help the industry revive.

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