2. Suppose that the government subsidizes employment. That is, the government pays the firm's units of...
2. Suppose that the government subsidizes employment. That is, the government pays the firm's units of consumption goods for each unit of labor the firm hires. For example, if firms hire Nd workers, the government gives subsidies qNd to the firm. The market wage is given by w. (a) Setup firm's prot maximization problem. (b) Derive firm's optimal labor demand Nd. Comparing to no-subsidy case, does firm hire more workers, less workers or remain unchanged? (c) How is the labor demand curve changed?
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2. Suppose that the government subsidizes employment. That is,
the government pays the firm's units of...
5. a) Suppose the government imposes a producer tax: the firm pays t units of consumption...
5. a) Suppose the government imposes a producer tax: the firm pays t units of consumption goods to the government for each unit of output it produces. Determine the effect of this tax on the firm’s demand for labour. b) Repeat (a) in the case of an employment subsidy, where the government pays the firm s units of consumption goods for each unit of labour that the firm hires.
2. Suppose one firm's labor demand function is: D(u) =-2w + 50; (a) if this firm...
2. Suppose one firm's labor demand function is: D(u) =-2w + 50; (a) if this firm hires in a competitive market with the marginal expense ME- 10, then what is the employment level for this firm? (b) if there are 100 firms that are exactly the same like this one hiring labor, what is the market labor demand function? Further, assume the market sup- ply function is S(w) -300w, then what is the equilibrium market wage and employment level?
From time to time, the government has raised the minimum wage. Some people suggested that a...
From time to time, the government has raised the minimum wage. Some people suggested that a government subsidy could help employers finance the higher wage. This example examines the economics of a minimum wage and wage subsidies. Suppose the supply of labor given by Ls=10W, where Ls is the quantity of labor (in millions of persons employed each) and w is the wage rate (in dollars per hour). The demand for labor is given by Ld= 80-10W. a) What will...
2. (60 points total) Please show all work Suppose the labor supply for a firm is...
2. (60 points total) Please show all work Suppose the labor supply for a firm is given by: and REAL Labor Demand is given by. ND 120 2N a)(5 points) What is the market clearing real wage and level of employment? b)lS points) Suppose the government imposed a minimum real wage of 30. How many workers are willing to work at a real wage of 30?
4. cosider a firm that produces a certain good. The demand is uncertain. There is 50%...
4. cosider a firm that produces a certain good. The demand is uncertain. There is 50% chance the demand is high, and 50% chance the demand is low. When the demand is high, its demand for labor is w- 12 -0.5L. When the demand is low, its demand for labor is w 8 - 0.5L. Here uw is wage for each worker and L is the total number of workers it hires. When the demand is high, the profit of...
4. cosider a firm that produces a certain good. The demand is uncertain. There is 50%...
4. cosider a firm that produces a certain good. The demand is uncertain. There is 50% chance the demand is high, and 50% chance the demand is low. When the demand is high, its demand for labor is w- 12 -0.5L. When the demand is low, its demand for labor is w 8 - 0.5L. Here uw is wage for each worker and L is the total number of workers it hires. When the demand is high, the profit of...
4. Cosider a firm that produces a certain good. The demand is uncertain. There is 50%...
4. Cosider a firm that produces a certain good. The demand is uncertain. There is 50% chance the demand is high, and 50% chance the demand is low. When the demand is high, its demand for labor is w 12-0.5L. When the demand is low, its demand for labor is w 8-0.5L. Here w is wage for each worker and L is the total number of workers it hires. When the demand is high, the profit of the firm can...
3. The Firm's Problem and Taxes (30 points total). Suppose the representative firm has a production...
3. The Firm's Problem and Taxes (30 points total). Suppose the representative firm has a production function given by Y = 2K" , where =K=4. The real wage equals 2. Suppose the firm is subject to a revenue lax. Specifically, the firm has to pay $l to the government for each Sl worth of output sold alternatively, pay units to the government for each unit of output sold). (a) (5 points) Write down the firm's maximization problem. (b) (5 points)...
HOMEWORK # 3 Productivity. Outeut and Employment #1 suppose the economy's production function is v-AK0.3 0.7...
HOMEWORK # 3 Productivity. Outeut and Employment #1 suppose the economy's production function is v-AK0.3 0.7 When K 2,000 N=50 what is r? (in % form and 1 decimal) #2 According to Okun's law, if actual output grew 3% and full-employment output rose 5%, what would be the change in the unemployment rate? #3 Cupcake Stand # Cupcakes Produced # workers 0 12 30 36 40 If Cupcakes sell for $5 each and the wage rate (nominal) is $40, how...
4. (20 points) Suppose that, in the basic one-period model, there is no government spending and...
4. (20 points) Suppose that, in the basic one-period model, there is no government spending and no taxes. Production by the representative firm produces pollution in proportion to the amount of output produced. Given any consumption bundle (a consumption-leisure pair), the consumer is worse of the more pollution there is. a. In a diagram, show the competitive equilibrium and the Pareto optimum. Show that the competitive equilibrium is not Pareto optimal, and explain why. Is more or less output produced...
2. Suppose one firm's labor demand function is: D(u) =-2w + 50; (a) if this firm hires in a competitive market with the marginal expense ME- 10, then what is the employment level for this firm? (b) if there are 100 firms that are exactly the same like this one hiring labor, what is the market labor demand function? Further, assume the market sup- ply function is S(w) -300w, then what is the equilibrium market wage and employment level?
2. (60 points total) Please show all work Suppose the labor supply for a firm is given by: and REAL Labor Demand is given by. ND 120 2N a)(5 points) What is the market clearing real wage and level of employment? b)lS points) Suppose the government imposed a minimum real wage of 30. How many workers are willing to work at a real wage of 30?
4. cosider a firm that produces a certain good. The demand is uncertain. There is 50% chance the demand is high, and 50% chance the demand is low. When the demand is high, its demand for labor is w- 12 -0.5L. When the demand is low, its demand for labor is w 8 - 0.5L. Here uw is wage for each worker and L is the total number of workers it hires. When the demand is high, the profit of...
4. cosider a firm that produces a certain good. The demand is uncertain. There is 50% chance the demand is high, and 50% chance the demand is low. When the demand is high, its demand for labor is w- 12 -0.5L. When the demand is low, its demand for labor is w 8 - 0.5L. Here uw is wage for each worker and L is the total number of workers it hires. When the demand is high, the profit of...
4. Cosider a firm that produces a certain good. The demand is uncertain. There is 50% chance the demand is high, and 50% chance the demand is low. When the demand is high, its demand for labor is w 12-0.5L. When the demand is low, its demand for labor is w 8-0.5L. Here w is wage for each worker and L is the total number of workers it hires. When the demand is high, the profit of the firm can...
3. The Firm's Problem and Taxes (30 points total). Suppose the representative firm has a production function given by Y = 2K" , where =K=4. The real wage equals 2. Suppose the firm is subject to a revenue lax. Specifically, the firm has to pay $l to the government for each Sl worth of output sold alternatively, pay units to the government for each unit of output sold). (a) (5 points) Write down the firm's maximization problem. (b) (5 points)...
HOMEWORK # 3 Productivity. Outeut and Employment #1 suppose the economy's production function is v-AK0.3 0.7 When K 2,000 N=50 what is r? (in % form and 1 decimal) #2 According to Okun's law, if actual output grew 3% and full-employment output rose 5%, what would be the change in the unemployment rate? #3 Cupcake Stand # Cupcakes Produced # workers 0 12 30 36 40 If Cupcakes sell for $5 each and the wage rate (nominal) is $40, how...
4. (20 points) Suppose that, in the basic one-period model, there is no government spending and no taxes. Production by the representative firm produces pollution in proportion to the amount of output produced. Given any consumption bundle (a consumption-leisure pair), the consumer is worse of the more pollution there is. a. In a diagram, show the competitive equilibrium and the Pareto optimum. Show that the competitive equilibrium is not Pareto optimal, and explain why. Is more or less output produced...
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