Solved

Consider the Following Model of the Labor Market:
Labor Supply L5=aˉ×w+ˉL ^ { 5 } = \bar { a } \times w + \bar { \ell }

Question 1

Multiple Choice

Consider the following model of the labor market:
Labor supply: L5=aˉ×w+ˉL ^ { 5 } = \bar { a } \times w + \bar { \ell }
Labor demand: Ld=fˉwL ^ { d } = \bar { f } - w
The values of the equilibrium quantity of labor, L, and wage, w, are:


A) L=(aˉfˉ+ˉ) /(ˉ+aˉ) ;w=(fˉˉ) /(ˉ+aˉ) L ^ { * } = ( \bar { a } \bar { f } + \bar { \ell } ) / ( \bar { \ell } + \bar { a } ) ; w ^ { * } = ( \bar { f } - \bar { \ell } ) / ( \bar { \ell } + \bar { a } )
B) L=(aˉfˉ+ˉ) /(ˉ+aˉ) ;w=(fˉˉ) /(ˉaˉ) L ^ { * } = ( \bar { a } \bar { f } + \bar { \ell } ) / ( \bar { \ell } + \bar { a } ) ; w ^ { * } = ( \bar { f } - \bar { \ell } ) / ( \bar { \ell } - \bar { a } )
C) L=(aˉfˉ+ˉ) /(ˉ+aˉ) ;w=(fˉ+ˉ) /(ˉ+aˉ) L ^ { * } = ( \bar { a } \bar { f } + \bar { \ell } ) / ( \bar { \ell } + \bar { a } ) ; w ^ { * } = ( \bar { f } + \bar { \ell } ) / ( \bar { \ell } + \bar { a } )
D) L=(aˉfˉ+ˉ) /(ˉaˉ) ;w=(fˉˉ) /(ˉaˉ) L ^ { * } = ( \bar { a } \bar { f } + \bar { \ell } ) / ( \bar { \ell } - \bar { a } ) ; w ^ { * } = ( \bar { f } - \bar { \ell } ) / ( \bar { \ell } - \bar { a } )
E) L=aˉfˉ+ˉˉ+aˉ;w=fˉˉˉaˉL ^ { * } = \frac { \bar { a } \bar { f } + \bar { \ell } } { \bar { \ell } + \bar { a } } ; w ^ { * } = \frac { \bar { f } - \bar { \ell } } { \bar { \ell } - \bar { a } }

Correct Answer:

verifed

Verified

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents