Problem1 suppose the supply curve for labor is backward, Ask an Expert

Economics

Problem

1. Suppose the supply curve for labor is backward bending over most of its range. The government now imposes a minimum wage in this labor market. What is the impact of the minimum wage on employment? Does it matter which of the two curves (supply or demand) is "more" downward sloping? Why?

2. The firm's elasticity of demand for labor is -0.4. Suppose the firm experiences an increase in productivity such that at every level of employment its output is 2 percent higher than before. What will happen to the number of workers hired by the firm?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92761888

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