The following problem consist of two parts. First, a short description of a certain microeconomic concept is presented. Second, two statements are made about the
The following problem consist of two parts. First, a short description of a certain microeconomic concept is presented. Second, two statements are made about the concept. You have to identify whether each statement is true or false and laborate why you assess each statement the way you do. Consider the labour discipline model from the lecture. If unemployment benefits increase: Statement 1: Effort decreases because the disutility of effort decreases. Statement 2: The employment rent will fall unless the firm raises the wage
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