Questions from Labor Economics

Q: What happens to employment in a competitive firm that experiences a technology

What happens to employment in a competitive firm that experiences a technology shock such that at every level of employment its output is 200 units per hour greater than before?

Q: What type of instrumental variable is needed to estimate the labor supply

What type of instrumental variable is needed to estimate the labor supply elasticity? Can you think of any historical instances that would allow for this?

Q: A firm’s technology requires it to combine 5 person-hours of

A firm’s technology requires it to combine 5 person-hours of labor with 3 machine hours to produce 1 unit of output. The firm has 15 machines in place and the wage rate rises from $10 per hour to $20...

Q: In a particular industry, labor supply is ES = 10 +

In a particular industry, labor supply is ES = 10 + w and labor demand is ED = 40 -4w, where E is the level of employment and w is the hourly wage. a. What are the equilibrium wage and employment if t...

Q: Figure 4-9 discusses the changes to a labor market equilibrium

Figure 4-9 discusses the changes to a labor market equilibrium when the government mandates an employee benefit for which the cost exceeds the worker’s valuation (panel a) and for wh...

Q: Figure 4-6 shows that a payroll tax will be completely

Figure 4-6 shows that a payroll tax will be completely shifted to workers when the labor supply curve is perfectly inelastic. In this case, for example, a new $2 payroll tax will lower the wage by $2,...

Q: In the cobweb model of labor market equilibrium (Figure 4-

In the cobweb model of labor market equilibrium (Figure 4-17), the adjustments in employment can be small with adjustment being fast, or the adjustments in employment can be large with adjustment bein...

Q: A monopsonist’s demand for labor can be written as VMPE = 40

A monopsonist’s demand for labor can be written as VMPE = 40 - 0.004ED. Labor is supplied to the firm according to w = 5 + 0.01ES. Thus, the firm’s marginal cost of hiring workers when it hires off of...

Q: Consider the policy application of environmental disasters and the labor market that

Consider the policy application of environmental disasters and the labor market that was presented in the text. a. How do labor demand and labor supply typically shift following a natural disaster? b....

Q: Suppose the Cobb-Douglas production function given in equation 4-

Suppose the Cobb-Douglas production function given in equation 4-1 applies to a developing country. Instead of thinking of immigration from a developing to a developed country, suppose a developed cou...