Labor economics

Assume that the demand curve for labor in country Y is w = 100 - 4E, where E is measured as millions of workers. Prior to immigration, there are 20 million workers in the country. Suppose that there is an influx of 1 million immigrants into country Y. Assuming that labor accounts for 80% of country Y's gross domestic product, calculate immigrant surplus as a share of national income.

Graphs

Show graphically why someone paid an annual salary might be likely to shirk if monitoring is incomplete at the firm.

Labor econ

Suppose that it is more difficult to monitor workers at larger firms than at smaller firms. According to the delayed payment compensation model, would workers at smaller firms have flatter or steeper age-earnings? Explain how an empirical test of this argument would be problematic.

Workers start at firm A when they are 18...

Workers start at firm A when they are 18. The VMP of each worker remains $18 throughout their work life. Given the firm's concern that workers shirk, they start workers at $10 and increase the pay by $0.40 each year they are on the job. Assume that the firm does not have a pension plan and r=0 for all workers. (i) For what ages will workers be paid above their VMP? (ii) Show whether this firm opposes legislation prohibiting mandatory retirement for workers under 65. (iii) At what age would they begin to oppose legislation?

ECONOMIES OF SCALE

What are some facors that give rise to economies of scale? and Diseconomies?