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Deakin MAE304 – Labor Economics Assignment

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Deakin MAE304 – Labor Economics Assignment

task 1 part C and task 2 parts b and cMAE304 Labor Economics Assignment, T2 2016Department of Economics, School of BusinessTask 1: Equilibrium in the Labor Market(c)Suppose that there are 10000 workers, and 100 firms. Derive the equilibriumwage and number of hours each worker works. Graph your answer.(2 Points)Task 2: Immigration and the New Equilibrium(b)Which group, domestic workers or immigrant workers, has more elastic laborsupply? Why? Compute: As you deem appropriate, either (i) choose one wage,and then compute the elasticity for each group at that wage; or, (ii) choose twowages and then compute the elasticity for each group between those two wages.(4 Points)(c)Let there be 5000 immigrants with the same preferences as the domesticworkers; however, for them, V = 0. Derive the new market labor supply and thenew equilibrium wage. What changes have the domestic workers experienced,both to the number of hours that they work and to the wage that they receive?(4 Points)

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