Question One

1. In this question you have to indicate whether you think the statement is true or false and explain why. You do not get any points if you only state whether the statement is true or false.

(a) Assuming consumption and leisure are normal goods, hours worked will fall when the wage increases if the income effect dominates the substitution effect. ( 1 mark )

(b) In order to use schooling as a signal, the signal must be more costly for low skilled workers than for high-skilled workers ( 1 mark)

(c) When the government imposes a payroll tax on workers, the effects are identical to the effects had the government imposed the tax on employers. ( 1 mark)

(d) Many hotel workers in Fiji suffer the full brunt of Covid 19 as many lost their jobs and remain in unemployment for a substantial amount of time. ( 1 mark)

(e)The labor market in the Pacific will recover as early as November 2021 (1 mark)