problem set 4 - ECON 202 Fall 2012 Ttnc Problem Set 4...

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ECON 202 / Fall 2012 / TütüncüProblem Set 4 Question (1)Consider the effects of education that increases the productivity of labor (measured by MPL, marginal product of labor) on the real wage rate, employment level, and aggregate output in a country if(a)workers think they deserve higher real wages than they did ten years ago but they have no other job alternatives then in the country, and(b)workers think they deserve higher real wages than they did ten years ago and some of them can find higher paying jobs in foreign countries.
Question (2)Consider an economy that initially has a labor force of 2000 workers. Of these workers, 1900 are employed and each worker works 40 hours per week. At this level of employment, ten units of output are produced by each hour of labor.(a)What is the total number of hours worked per week in the economy? What is the total output per week in the economy? What is the unemployment rate?(b)The economy enters a recession. Employment falls by 4%, and the number of hours per week

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