HOD_2260_HW4_Fall2007

HOD_2260_HW4_Fall2007 - HOD 2260. Homework Assignment No.4...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
HOD 2260. Homework Assignment No.4 Due: Friday, November 09 1. (15) Brief essay questions. Include graphs when required. a) (5) Based on the reading of “Policy Application 4-1”, pp.205-209 (in our textbook), what are the alternative explanations for hard-core unemployment to the marginal productivity theory of demand? How does the marginal productivity theory understand the problem? What are the solutions (policies) that are proposed next to wage subsidy programs? An alternative explanation to the marginal productivity theory of demand is that the hard-core unemployed face a combination of discrimination and a shortage of jobs. The marginal productivity theory of demand understands the problem as that firms do not find it profitable to hire those people because they have low levels of productivity (due to their general lack of education and good work habits) and minimum wages make it so that the firms can’t lower their wages to a level where it is profitable to hire those workers. Other than wage subsidy programs, it has been suggested are to train the hard-core unemployed so that they have job skills or to lower the cost for firms to hire those people (such as a subminimum wage). b) (10) Show with a graph that the more inelastic the labor demand curve, the smaller will be the increase in employment that will result from the reduction in
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/09/2008 for the course HOD 2260 taught by Professor Basay during the Fall '07 term at Vanderbilt.

Page1 / 4

HOD_2260_HW4_Fall2007 - HOD 2260. Homework Assignment No.4...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online