Assume that an employer believes that the “efficiency” (
) it can get from a particular worker,
as a function of the hourly wage (
), is given by function
least up to a wage of 30.
Create a table of
for wages equal to 5, 10, 14, 15, 16,
20, and 25.
Which wage gives the highest ratio of efficiency per unit of labor cost?
Once the firm has hit on an optimal
, whatever it is, would cutting
wages whenever demand falls off increase or decrease wages per unit
c. Cutting wages (any wage lower than 15) would increase wages per unit of efficiency.
Assume that a society consists of two types of workers. For type A, 3 million workers lose
their jobs each year, and each one takes a year to find a new one. For type B, 36 million workers
lose their jobs each year (3 million per month), and each takes one month to find a new job.
Thus, at any given time, 6 million are unemployed in this economy.
How many “spells” of unemployment occur each year in this
What percentage of the “spells” are only one month long?
If you take all the workers unemployed each year and multiply each by
the length of his or her unemployment “spell,” how many “months” of
unemployment would there be in this economy each year?
Of all the “months” of unemployment, how many are accounted for by
the workers unemployed a year at a time?