ps2 - Economics 102 Introductory Macroeconomics - Spring...

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Economics 102 Introductory Macroeconomics - Spring 2005, Professor J. Wissink Problem Set 2 – DUE at the start of class on Wednesday Feb 16 , 2005 Boxes will be removed ten minutes after the start of class. Remember: We will NOT accept problem sets late. Period. Thanks for minding this policy and not asking if you can hand it in late. 1. The labor market in Tompkins County is given by the following table: Salary per worker per year (thousand $) Workers supplied per year (thousands) Workers demanded per year (thousands) 10 10 70 20 30 60 30 50 50 40 70 40 50 90 30 a) Graph the demand and supply curves of this market. What are the equilibrium price and quantity? b) Using your graph, show the impact of a minimum salary law set by the government at $40 thousand per year. Calculate any surplus or shortage that occurs because of this policy. c) Suppose the government decides to offer unemployment compensation of $7,000 per year to any unemployed worker. To receive this unemployment benefit, a worker must: (a) have been employed before the floor price was introduced; and (b) have become unemployed because the salary floor was introduced. Estimate the number of workers that will receive unemployment compensation and the cost of this program to the
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This note was uploaded on 03/10/2009 for the course ECON 102 taught by Professor Kyle during the Spring '08 term at Cornell University (Engineering School).

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ps2 - Economics 102 Introductory Macroeconomics - Spring...

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