Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Here is my question: In lecture we talked about a simple supply demand model for an occupation: ad = a M 15,5 = [3 +

Here is my question:

image text in transcribed In lecture we talked about a simple supply demand model for an occupation: ad = a M 15,5 = [3 + yvir, where 11\" represents the demand of labor for the occupation, n5 the supply of labor to the same occupation, w represents wages paid to works in the occupation (relative to other occupations). 6 represents the demand elasticity and y the supply elasticity for the occupation and at and [3 represent demand and supply shifters measured as the percent change in the demand for and supply of labor in the occupation conditional on the given wage (i.e. conditional on vi; = 0). We made the claim that if at = O, . a]? . B n=an w=. 6+}! d 6+)! (1) Show these expressions are valid. (2) Derive general expressions for 1': and W. (Le. expressions that allow both d: at 0 and B i 0). (3) Comment on how 12 and 6 affect how equilibrium employment and wages respond to demand shifts

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Econometrics With Economic Applications

Authors: Dennis Halcoussis

1st Edition

0030348064, 9780030348068

More Books

Students also viewed these Economics questions