2) In a city, the equilibrium employment is 100 000 workers, and the equilibrium wage is $100 per day. The absolute value of elasticity of demand for labor is 1.0 and the elasticity of supply is 5.0. The employment multiplier is 2.0. Suppose the demand for labor used in the production of exports increase by 6000 jobs. Calculate the new eqilibrium wage and employment levels.
2) In a city, the equilibrium employment is 100 000 workers, and the equilibrium wage is $100 per day. The absolute value of elasticity of demand for labor is 1.0 and the elasticity of supply is 5.0. The employment multiplier is 2.0. Suppose the demand for labor used in the production of exports increase by 6000 jobs. Calculate the new eqilibrium wage and employment levels.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter4: Labor And Financial Markets
Section: Chapter Questions
Problem 20RQ: Whether the product market or the labor market, what happens to line equilibrium price and quantity...
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