roseberriesx
Badges: 2
Rep:
?
#1
Report Thread starter 3 years ago
#1
Name:  Screen Shot 2018-04-30 at 00.38.13.png
Views: 39
Size:  75.3 KB

Question: Suppose that X is the wage ceiling and the rural wage is not allowed to rise above X. The wage in the urban sector is flexible and is allowed to move freely. Labor is allowed to move freely between the urban and rural sectors.

At equilibrium, what is the
(a) wage in the rural sector (X)
(b) amount of labor employed in the rural sector (C)
(c) wage in the urban sector (X)
(d) amount of labor employed in the urban sector (A+B)

I am pretty confused as to how the amount of labor employed in the rural and urban sector is determined from this graph, and would appreciate any help at all! Thank you so much :-)
0
reply
jpt4749
Badges: 14
Rep:
?
#2
Report 3 years ago
#2
From what I understand

In rural sector the wage can’t be above X so at price X when it crosses demand curve (rural) the quantity demanded for labor will be B+C.

That leaves the quantity demanded in urban sector = A and that corresponds to the wage of Z on demand curve (urban)
0
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Back
to top
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Should 'Mental health support' be included on league tables?

Yes (217)
74.57%
No (74)
25.43%

Watched Threads

View All
Latest
My Feed