Number 5and 8
Chapter 19 The Labour Market: Wages and Unemployment 4. Here is a report from a not-very-efficient labour-force survey taker: 'There were 65 people in the houses I visited, 10 of them had children under 16 and 10 retired; 9. How would each 25 people had full-time jobs, and 5 had part-time jobs. There were 5 full-time home of unskilled work makers, 5 full-time students over age 16 and 2 people who were disabled and can- . Demand for not work. The remaining people did not have jobs but all said they would like one. b. A sharp inc One of these people had not looked actively for work for more than a year, how- public trans ever.' Find the labour force, the unemployment rate and the participation rate C. Because of implied by the report. work d. The plant 5. The US Bureau of Labor Statistics (http:// stats.bls.gov) reported the following data the produ (in millions) for January 2008 and January 2011: 10. Skilled or un that the wag Employed January 2008 January 2011 a. Suppose 146.2 Unemployed 139.3 product per hou 7.6 Not in labour force 13.8 Explain 78.8 85.5 the two b. Supp Calculate the unemployment labour force participation rates for January 2008 and wage January 2011. How does the later compare with the former? Expla 6. The demand for and supply of labour in a certain industry are given by the equations skill wha Demand: Na - 400 - 2w afte Supply: N, = 240 + 2w where N. is the number of workers employers want to hire, N, is the number of people willing to work, and both labour demand and labour supply depend on the wage w, which is measured in euros per day. a. Find employment and the wage in labour market equilibrium. b. Suppose government introduces a minimum wage of $50 per day. Find employ ment and unemployment. Is anyone made better or worse off by the minimum wage? In answering the last part of the question, consider not only workers but employers and other people in the society, such as consumers and taxpayers. c. Repeat part (b) except now assume that a union contract requires that workers be paid C60 per day. 7. Using the demand and supply equations in question 6, suppose that the cost of complying with new government regulations on workplace safety reduces labour demand to Na = 360 - 2w. Find the change in numbers employed and the equilib rium wage. 8. For each of the following scenarios, state whether the unemployment is frictional, structural or cyclical. Justify your answer. a. Ted lost his job when the steel mill closed down. He lacks the skills to work in another industry and so has been unemployed for over a year. b. Alice was laid off from her job at the car plant because the recession reduced the demand for cars. She expects to get her job back when the economy picks up. c. Lance is an unskilled worker who works for local removal companies during their busy seasons. The rest of the year he is unemployed. d. Gwen had a job as an office clerk but quit when her husband was transferred to another city. She looked for a month before finding a new job that she liked. e. Tao looked for a job for six weeks after finishing college. He turned down a couple of offers because they didn't let him use the skills he had acquired at college, but now he has a job in the area that he trained for. f. Karen's parents are injured in a road accident. She quits her job as a teacher to become a full-time carer
