Answer to Question #208721 in Macroeconomics for Juhi

Question

Economics

1. If the !"! > 𝑤 holds at T= L for the person i , and !"! < 𝑤 holds at T= L !"" !""
2. for the person j what you can conclude about the level of market wage for person i and j . Discuss about their labor force participation rates? (5 points) (T: Number of hours available, L: Number of hours spent for leisure)

Answer 1

The level market wage rate for I and J tend to be the same based on the fact that both people have equal Number of hours for leisure and the ones they are available. Therefore, the level can be said to be equilibrium market wage rate.

The labor force participation rate is known to be a measure of the active labor force within an economy. The formula for calculating the number of people is the sum of all employed or actively seeking jobs divided by the overall non-hospital working age civilian population.

The labor force participation rate= (Labor Force/Civilian Noninstitutional Population )x 100.

For I and J, their labour force participation rate tends to be the similarly the same considering the fact that the labour force ratio to civilian Noninstitutional population tends to be constant.