In the book, we reviewed the standard labor market model. In lecture we also learned the simple labor search model. Long Problems | Fall 2009 Final TFU 18: A minimum wage set above equilibrium wage reduces employment in the economy. This question implies a binding price floor. Drawing the standard labor supply model’s labor demand and supply curves: with w wages, w-under-bar the minimum wage. Note that “minimum wage set above equilibrium wage” implies w-under-bar is above w-star. Labor demand: firms are only willing to hirer TRUE. |
Teaching - Curtis Kephart > Econ 100B Intermediate MacroEconomics (Homework and exam examples) >