04 Productivity, Output, and Employment, Part 2-1

04 Productivity, Output, and Employment, Part 2-1 - Agenda...

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1 4-1 Productivity, Output, and Employment, Part 2 4-2 Agenda ±Th e Supp ly o f L abo r ±L abo r M a r k e t Equ i l ib r ium ±Un em
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2 4-5 The Supply of Labor ±R e a l w ag e s and l abo r supp ly : ¾ An increase in the real wage has 2 effects: ± A substitution effect : A higher real wage increases the reward for working so more labor is supplied. ± An income effect : A higher real wage increases income for same amount of work time so a person can afford more leisure and will supply less labor. 4-6 The Supply of Labor ±R e a l w ag e s and l abo r supp ly : ¾ A pure substitution effect : a one-day rise in the real wage. ±A tempo ra ry
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3 4-9 The Supply of Labor ±R e a l w
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This note was uploaded on 07/29/2010 for the course UGBA 100b taught by Professor Wood during the Summer '10 term at Berkeley.

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04 Productivity, Output, and Employment, Part 2-1 - Agenda...

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