ECON 3341 UCLA Labour Economics Paper

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ECON 3341

University Of California Los Angeles

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Assignment One Labour Economics (Economics 3341) Winter 2020 Issued: February 4th, 2020 Due: February 13th, 2020 on BrightSpace Answer each of the following questions in full sentences. Use a graph if it helps with your explanation. 1. Define and explain Frictional, Structural and Cyclical unemployment. What is NAIRU? 2. Show the effect of a minimum wage on a labour market where the equilibrium wage is below the legislated minimum wage. Use the labour demand and supply model but don’t consider any effects outside of the basic model. 3. Explain the basic Consumption – Leisure choice model. Show what happens to the model if there is an increase in the wage rate. Include the income and substitution effects. 4. Show how to determine the cost minimizing mix of capital and labour using a graph. How would the graph change if the cost of labour rose relative to the cost of capital? Good Luck
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Assignment One
Labour Economics (Economics 3341)
Winter 2020
Issued: February 4th, 2020
Answer each of the following questions in full sentences. Use a graph if it helps with your
explanation.
1. Define and explain Frictional, Structural and Cyclical unemployment. What is NAIRU?
Frictional unemployment is a type of unemployment primarily caused by worker looking for
jobs and companies looking for workers but in a healthy economy. This means that workers feel
comfortable to leave and look for jobs depending on their situations. Similarly, employers are
also looking for employee because of the growing economy.
Structural unemployment is a chronic long-term unemployment that occurs when a country is
not in a recession. In this type of unemployment, the numbe...


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