L7. Employment Relationship [10 marks]

In the labour-discipline model (LDM),the employer sets the wage to minimise the cost of effort.Using the LDM, illustrate and explain how a change in conditions affect the employee's best response function (BRF) in the following scenarios:

a)Being monitored by the boss using tracking technology to detect 'shirking' whilst working from home in urban Australia.

[suggested word limit: 270] [5 marks]

b)In relation to the hospitality sector (e.g. restaurant industry) in the US: a sharp increase in the pool of unemployed people due to a hiring freeze, combined with a rise in unemployment benefits.

[suggested word limit: 270] [5 marks]

To support your answer in (a), refer to following news article byEdwina Stott and Nick Wiggins(2020), "Being monitored by your boss while working from home necessary trade-off or 'stupid' surveillance?",ABC News, October 16, available:https://www.abc.net.au/news/2020-10-16/work-from-home-tracking-software-monitoring/12766020

To support your answer in (b), refer to following news article byNeil Irwin(2021), "'Unemployment Is High. Why Are Businesses Struggling to Hire?",The New York Times, May 11, available:https://www.nytimes.com/2021/04/16/upshot/unemployment-pandemic-worker-shortages.html