Which of the following statements is false? Unions can have sufficient bargaining power to push wages above comp Sticky wage theories cannot explain frictional unemployment. The search and matching model is an example of a sticky wage theory. None of the above statements are false.
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- Which of the following statements is false? Sticky wage theories presume that the main cause of unemployment is the existence of wage rigidities. Sticky wage theories explain frictional, structural and cyclical unemployment. Union bargaining theory is an example of a sticky wage theory. None of the above statements are false.Why or how can you explain Card and Krueger's findings? i.e. that an increase in the minimum wage did not increase unemployment.When unemployment exists in the supply and demand labor market model, there is an adjustment that brings the model back into equilibrium—back to full employment. Orthodox economists cite two mechanisms that cause the adjustment. Explain each of these.
- Explain why wage rigidity due to labor unions may lead to structural unemployment.Explain the role union preferences play in determining unemployment.Technological innovation shifts upwards the productivity and price setting curves. This always results in a lower equilibrium unemployment rate both immediately and in the longer term. True. In the long run unemployment will fall. False, the outcome depends also on the wage setting process. If unions demand higher wages, then this may shift outwards the wage setting curve, resulting in higher unemployment, at least in the short run.
- Say the average increase in pay for non-union workers in 2011 is 2% across the U.S. If a workers' union successfully negotiates a 3-year collective agreement that provides a 4.5% raise in 2011, and a 4.3% raise in 2013, then the for-profit employer will typically Question 42 options: begin to fire its older union workers. replace union workers with non-union workers. curtail expansion of labor as a trade-off. replace union workers with foreign workers.Consider an economy that consists of a union and non-union sector. The labour demand in each sector is given by: E=600-25W The total supply of labour is 700 workers, and it does not depend upon the wage. Labour and jobs are homogeneous in both sectors. What is the market-clearing wage if both sectors are competitive? How many workers are employed in both sectors? Suppose a monopoly union sets the wage at the union sector at £12. How many workers will be employed in the union and nonunion sectors? What wage will the workers in nonunion sector receive? What is the union wage gap in part (b)? What would the union wage effect be if one controlled for the spillover effect?Firms in the country of Merka, which experiences varying levels of unemployment over time, face a very competitive labor market. Classify the given events according to how each would affect Merka's unemployment rate. Increase in the unemployment rate Decrease in the unemployment rate Answer Bank decreased unemployment benefits increase in the minimum wage introduction of employment-at-will doctrine increase in unions' influence
- According to the traditional theory of wages, wages are mainly determined by Group of answer choices the Fair Labor Standards Act supply and demand labor-management negotiations regional differencesConsider the labor market illustrated in the figure to the right. Suppose this market has a unionized sector and a nonunionized sector such that the demand for unionized workers is DU and the demand for nonunionized workers is DNU. Also assume that the supply of unionized and nonunionized labor is fixed at SL. In equilibrium, what is the market wage?Based on your understanding of the labor market model presented by the wage setting and price setting relations, explain what types of policies could be implemented to cause a reduction in the natural rate of unemployment. This is one of the questions from the Macroeconomics assignment. Thanks in advance :)