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Labor Economics 6th Edition by George Borjas
Edition 6ISBN: 978-0073523200Labor Economics 6th Edition by George Borjas
Edition 6ISBN: 978-0073523200 Exercise 3
Suppose the marginal revenue from search is
MR = 50 1.5 w
where w is the wage offer at hand. The marginal cost of search is
MC = 5 + w
a. Why is the marginal revenue from search a negative function of the wage offer at hand
b. Can you give an economic interpretation of the intercept in the marginal cost equation; in other words, what does it mean to say that the intercept equals $5 Similarly, what does it mean to say that the slope in the marginal cost equation equals one dollar
c. What is the worker's asking wage Will a worker accept a job offer of $15
d. Suppose Unemployment Insurance benefits are reduced, causing the marginal cost of search to increase to MC = 20 + w. What is the new asking wage Will the worker accept a job offer of $15
MR = 50 1.5 w
where w is the wage offer at hand. The marginal cost of search is
MC = 5 + w
a. Why is the marginal revenue from search a negative function of the wage offer at hand
b. Can you give an economic interpretation of the intercept in the marginal cost equation; in other words, what does it mean to say that the intercept equals $5 Similarly, what does it mean to say that the slope in the marginal cost equation equals one dollar
c. What is the worker's asking wage Will a worker accept a job offer of $15
d. Suppose Unemployment Insurance benefits are reduced, causing the marginal cost of search to increase to MC = 20 + w. What is the new asking wage Will the worker accept a job offer of $15
Explanation
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Verified
a) Marginal revenue as a negative functi...
Labor Economics 6th Edition by George Borjas
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