In the city of Fryeville, the equilibrium employment is 100,000 workers and the equilibrium wage is $100
Fantastic news! We've Found the answer you've been seeking!
Question:
In the city of Fryeville, the equilibrium employment is 100,000 workers and the equilibrium wage is $100 per day. The wage elasticity of demand for labor is -1.0 and the wage elasticity for supply is 5.0. Suppose the demand for labor increases by 18 percent.
a. What would be the impact on wages (in terms of percentages) as a result of an increase in demand of 18 percent?
b. What would be the new equilibrium wage in the city of Fryeville?
Related Book For
Macroeconomics Principles Applications And Tools
ISBN: 9780134089034
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
Posted Date: