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Explain How Each of the Following Events Affects the Equilibrium

question 36

Essay

Explain how each of the following events affects the equilibrium wage and the equilibrium quantity of labour (assume all else is constant with each event).Be sure to explain whether demand for or supply of labour has changed.
(1)The price of output a firm produces rises.
(2)A leisure-hour provides greater marginal benefit.
(3)The marginal tax rate rises.
(4)New immigration laws restrict the hiring of illegal workers.
(5)A reduction in welfare benefits.
(6)The cost of machines falls (labour and machines are substitutes).
(7)Technology makes labour more productive.
(8)The price of the product a firm produced falls.


Definitions:

Interest Rate

The rate at which a borrower is charged interest for the money borrowed from a lender.

Cash Rebate

A partial refund to someone who has paid too much money for tax, rent, or a utility, or as a promotional incentive from the purchase of goods or services.

Effective Rate

The actual interest rate earned or paid on an investment, loan, or savings account, taking into account the effect of compounding.

Annuitant

The individual who receives the benefits or payments from an annuity plan.

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