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How do you calculate the free market wage rate given the labor supply and demand functions?
In 1996 Congress raised the minimum wage from $4.25 to $5.15 per hour. Some people suggested that a government subsidy could help employers finance the higher wage. This exercise examines the economics of a minimum wage and wage subsidies IN A MAKE-BELIEVE COUNTRY.
Suppose the supply of low skilled labor is given by LABOR SUPPLY = 10*w millions where w is the wage rate [in dollars per hour]. The demand for labor is given by LABOR DEMAND = 80 - 10*w millions.
a) What will be the free market wage rate and employment level?
b) Suppose the government sets a $5.00 per hour minimum wage. What will be the employment level?
c) Suppose the government pays a subsidy of $1 per hour directly to the employee. What will be the market wage and employment level? How much will the government pay per week [suppose every laborer works 40 hours].
Compute real GDP for 2004 and 2005 using 2004 prices. By what percent did real GDP grow? Compute the value of the price index for GDP for 2005 by using 2004 as the base year. By what percent did prices increase?
Explain how large a sales increase can the company achieve without having to raise funds externally; that is, what is its self-supporting growth rate.
Critics have argued that if there are strong factor substitution effects, these subsides can reduce employment in the state.
Compute the own price elasticity of demand whenever the price goes from $5 to $4.
Suppose that Demand and Supply curves for coffee bean is given by-What value of t maximizes Government's tax revenue?
Illustrte what is the put premium on a December 25 PHLX pound contract with an exercise price of $1.81.
Illustrate what is the impact of shifts of the aggregate demand curve on potential output.
Provide separate arguments to support your claims as to their slope, curvature, and the direction of increasing utility.
Describe and graph (using AD/AS framework) an example in today's news of fine tuning economy. Assume the MPC in an economy is 0.8, the APC is 0.8 and disposable income is $9 billion. If disposable income increases to $14 billion, what is the new le..
Elucidate why intermediate goods and services usually are not included directly in GDP. Are there any circumstances under which they would be included directly.
Using algebra find out the effects of this change in cost on profit maximizing output and the optimal profit.
P stands for price Pr stands for price of related good also N stands for per capita disposable income.
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