Consider the two labour market scenarios pictured. A. Fill in the chart if the union fixes...

 

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Consider the two labour market scenarios pictured. A. Fill in the chart if the union fixes wages $2 above the competitive level. Enter numerical values only. Market A Market B Unemployment created Adverse employment effect Deadweight loss created 2$ B. Fill in this chart for market A if the union fixes wages $2 above the competitive level. Enter numerical values only. Note that although 10 percent is represented as 0.10 when no percent sign is used, it is written as 10% when a percent sign is used. (So be careful how you report values before a percent sign: 0.10_% is entering "one tenth of a percent" not "ten percent.") Before After $ Total Surplus in A Firm Surplus in A 2$ Firm surplus as percent of total surplus: Worker Surplus in A % % 2$ Worker surplus as percent of total surplus: % In this case the deadweight loss is % of the original total surplus size. C. Now fill in this chart for market B if the union fixes wages $1 above the competitive level. Enter numerical values only. Note that although 10 percent is represented as 0.10 when no percent sign is used, it is written as 10% when a percent sign is used. (So be careful how you report values before a percent sign: 0.10 % is entering "one tenth of a percent" not "ten percent.") Before After $ $ Total Surplus in B Firm Surplus in B Firm surplus as percent of total surplus: Worker Surplus in B 2$ $ % % Worker surplus as percent of total surplus: % In this case the deadweight loss is % of the original total surplus size. D. Explain in markets A and B whether increasing by $2 is beneficial from the workers' perspective. What about by $1? Do you think unions raising wages (by some amount) in either of these markets is appropriate from a wider perspective? List what factors have you taken into account in determining why or why not. Graph for Q5: 10 W 9. 10 Market A S Market B 8 8 7 S 5 5 4 4 3 2 2 1 1 2 3 5 6 7 8 9. 10 3 4 5 6 7 8. 9 10 Consider the two labour market scenarios pictured. A. Fill in the chart if the union fixes wages $2 above the competitive level. Enter numerical values only. Market A Market B Unemployment created Adverse employment effect Deadweight loss created 2$ B. Fill in this chart for market A if the union fixes wages $2 above the competitive level. Enter numerical values only. Note that although 10 percent is represented as 0.10 when no percent sign is used, it is written as 10% when a percent sign is used. (So be careful how you report values before a percent sign: 0.10_% is entering "one tenth of a percent" not "ten percent.") Before After $ Total Surplus in A Firm Surplus in A 2$ Firm surplus as percent of total surplus: Worker Surplus in A % % 2$ Worker surplus as percent of total surplus: % In this case the deadweight loss is % of the original total surplus size. C. Now fill in this chart for market B if the union fixes wages $1 above the competitive level. Enter numerical values only. Note that although 10 percent is represented as 0.10 when no percent sign is used, it is written as 10% when a percent sign is used. (So be careful how you report values before a percent sign: 0.10 % is entering "one tenth of a percent" not "ten percent.") Before After $ $ Total Surplus in B Firm Surplus in B Firm surplus as percent of total surplus: Worker Surplus in B 2$ $ % % Worker surplus as percent of total surplus: % In this case the deadweight loss is % of the original total surplus size. D. Explain in markets A and B whether increasing by $2 is beneficial from the workers' perspective. What about by $1? Do you think unions raising wages (by some amount) in either of these markets is appropriate from a wider perspective? List what factors have you taken into account in determining why or why not. Graph for Q5: 10 W 9. 10 Market A S Market B 8 8 7 S 5 5 4 4 3 2 2 1 1 2 3 5 6 7 8 9. 10 3 4 5 6 7 8. 9 10

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Explanation Market A Minimum wageequilibrium wage2 Minimum wage224 Unemployment createdexcess supply of labor at the minimum wage Unemployment createdLSLD When wage is 4 LD3 LS8 Unemployment created83 ... View the full answer