In the One-Sided Search Model, If the Job Offer Rate

question 25

Multiple Choice

In the one-sided search model, if the job offer rate goes down

• A)the reservation wage goes up and long-run unemployment goes down.
• B)the reservation wage goes down and the effect on long-run unemployment is ambiguous.
• C)the reservation wage goes up and long-run unemployment goes up.
• D)unemployed workers stop searching.
• E)the reservation wage and long-run unemployment are unchanged.

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Definitions:

Perfectly Inelastic

A situation in demand where the quantity demanded does not change regardless of the change in price.

Perfectly Elastic

This describes a situation where a small change in price leads to an infinite change in the quantity demanded or supplied.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.

Elastic Demand

A situation where the quantity demanded of a good or service changes significantly in response to a change in price.