In the one-sided search model, a decrease in the fraction of the unemployed receiving job offers
A)is irrelevant.
B)reduces the welfare of the unemployed.
C)increases the welfare of the unemployed.
D)reduces the welfare of the employed.
E)increases the welfare of the employed.

Question

Quizplus · Accepted Answer

In the one-sided search model, a decrease in the fraction of the unemployed receiving job offers means that fewer job opportunities are available in the market. This results in a reduction in the welfare of the unemployed, as they have fewer options to choose from and may have to settle for lower-paying or less desirable jobs. The welfare of the employed is not affected by this change.

In the One-Sided Search Model, a Decrease in the Fraction