In a competitive labor market,shirking on the job can be a problem.In this market for labor services,the demand for labor is expressed as:
W = where W is wage rate (dollars per hour)and L is number employed per unit of time.The no shirking constraint (NSC)is expressed as:
NSC = where NSC is the minimum wage workers need not to shirk,and L is the number employed per unit of time.Assume that the labor force L^* = 150,000.Determine the following:
a.the level of unemployment that would result when firms pay the efficiency wage
b.the market clearing wage
c.the efficiency wage

Question

In a competitive labor market,shirking on the job can be a problem.In this market for labor services,the demand for labor is expressed as:
W =

where W is wage rate (dollars per hour)and L is number employed per unit of time.The no shirking constraint (NSC)is expressed as:
NSC =

where NSC is the minimum wage workers need not to shirk,and L is the number employed per unit of time.Assume that the labor force L^* = 150,000.Determine the following:
a.the level of unemployment that would result when firms pay the efficiency wage
b.the market clearing wage
c.the efficiency wage

Quizplus · Accepted Answer

The Answer of In a competitive labor market,shirking on the job can be a problem.In this market for labor services,the demand for labor is expressed as: W = where W is wage rate (dollars per hour)and L is number employed per unit of time.The no shirking constraint (NSC)is expressed as: NSC = where NSC is the minimum wage workers need not to shirk,and L is the number employed per unit of time.Assume that the labor force L^* = 150,000.Determine the following: a.the level of unemployment that would result when firms pay the efficiency wage b.the market clearing wage c.the efficiency wage

In a Competitive Labor Market,shirking on the Job Can Be