Chapter_4

Chapter_4 - Chapter4 LaborMarketEquilibrium 1...

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1 Chapter 4 Labor Market Equilibrium
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2 Demand, Supply, and the  Equilibrium Wage   For a firm For a Market w E E w S = Market clearing wage D D S A wage change is a movement along a curve. A technology change and input price changes (other than for labor) are examples of curve shifts.
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3 Payroll Tax Assessed on Firms w E S D E E’ w w’ D’ w’+t
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4 Payroll Tax Assessed on Workers w E S D E E’ w w’ S’ w’-t
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5 Who Pays More? The Worker or  the Firm? w E S D E E’ w w’ w-t D’ Payroll tax assessed on firm worker firm
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6 Who Pays More? The Worker or  the Firm? w E S D E E’ w w’ w+t S’ Payroll tax assessed on worker worker firm
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7 Who Pays More? The Worker or  the Firm? w E S D E E’ w w’ w-t D’ Payroll tax assessed on firm worker firm
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8 Who Pays More? The Worker or  the Firm? w E S D E E’ w w’ w+t S’ Payroll tax assessed on worker worker firm
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9 in labor market: Theory   (A) Perfectly competitive labor market (employers cannot  influence the wage rate paid) If the minimum wage impose a binding constraint in the labor 
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Chapter_4 - Chapter4 LaborMarketEquilibrium 1...

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