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Textbooks / Business / Principles of Economics 6 / Chapter 28 / Problem Problems and Applications 28.8

Structural unemployment is sometimes said to result from a mismatch between the job

Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw ISBN: 9780538453059 472

Solution for problem Problems and Applications 28.8 Chapter 28

Principles of Economics | 6th Edition

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Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw

Principles of Economics | 6th Edition

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Problem Problems and Applications 28.8

Structural unemployment is sometimes said to result from a mismatch between the job skills that employers want and the job skills that workers have. To explore this idea, consider an economy with two industries: auto manufacturing and aircraft manufacturing. a. If workers in these two industries require similar amounts of training, and if workers at the beginning of their careers could choose which industry to train for, what would you expect to happen to the wages in these two industries? How long would this process take? Explain. b. Suppose that one day the economy opens itself to international trade and, as a result, starts importing autos and exporting aircraft. What would happen to demand for labor in these two industries? c. Suppose that workers in one industry cannot be quickly retrained for the other. How would these shifts in demand affect equilibrium wages both in the short run and in the long run? d. If for some reason wages fail to adjust to the new equilibrium levels, what would occur?

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University of Louisville College of Business BSTA 201- Business Statistics – Spring 2016 Section 03 - 7997 - Tuesday and Thursday 11:00 AM to 12:15 PM, BS 123 Updated 01/07/15 INSTRUCTOR: Melanie Fox, PhD Office: College of Business, Room 182 Office Hours: 9:30 – 10:30 AM Monday, Tuesday, Wednesday,...

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Textbook: Principles of Economics
Edition: 6
Author: N. Gregory Mankiw
ISBN: 9780538453059

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Structural unemployment is sometimes said to result from a mismatch between the job

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