1. Describe the traditional economic view of a perfectly competitive labor market. What are the key characteristics?
2. Identify at least three supply-side factors that can impact on the availability of labor.
3. Identify at least three demand-side factors that can impact on the availability of labor.
4. What are barriers to entry for labor supply (specific to health care)?
5. What is the traditional economic view of complements versus substitution with respect to the health care workforce? What is the relationship between the nonprofessional and professional workforce? How is the “relative pay of care work” related?
6. What are the two types of production inputs and the two time periods addressed in the production process model? How do inputs vary across time periods?
8. Consider an economy where, consumer’s utility function is given as U(C,L)=C-(1/2)L2 . where C is consumption and L is labor. The production technology is Y=(1.6)L-(1/2)L2. The turnover cost per labor is (0.36)/(w/p)
(a) What happens to t as real wage increases? Give a clear intuition
(b) What happens to t as labor increases? Give a clear intuition
(c) Write down the firm’s maximization problem and solve it. Find real wage, labor.
(d) Write down consumer maximization problem and solve it. Derive labor supply curve
(e) Find real wage, employment, output and unemployment in this economy.