Suppose that the markup of goods prices over marginal cost is 10%, and that the wage setting equation is w = p (1 - .5u + z), where u is the unemployment rate and z is a variable that reflects the impact of minimum wage policy and unemployment benefits on the wage setting relations.

a. what is the real wage, as determined by the price-setting equation?

b. what is the natural rate of unemployment if z=0.009?

c. suppose that due to the competition the markup of prices over costs decreases to 2%, and z increases to 0.01 due to the changes in minimum wage policy. what happens to the natural rate of unemployment? explain the logic behind your answer.

using the ws and ps relations explain separately the impacts of a reduction and of an increase in the unemployment rate on the real wages.

Roi analysis using dupont model. charlie? s furniture store has been in business for several years. the firm? s owners have described the store as a ? high-price, highservice? operation that provides lots of assistance to its customers. margin has averaged a relatively high 32% per year for several years, but turnover has been a relatively low 0.4 based on average total assets of $800,000. a discount furniture store is about to open in the area served by charlie? s, and management is considering lowering prices in order to compete effectively. required: a. calculate current sales and roi for charlie? s furniture store. b. assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same roi as they currently earned. c. suppose that you presented the results of your analysis in parts a and b of this problem to charlie, and he replied, ? what

In allentown, pennsylvania, in the summer of 2014, the average price of a gallon of gasoline was $3.68long dasha 22-cent increase from the year before. many consumers were upset by the increase. one was quoted in a local newspaper as saying, "it's crazy. the government should step in." source: sam kennedy, "valley feeling pain at the pump," (allentown, pa) morning call, june 21, 2014. suppose the government had stepped in and imposed a price ceiling equal to old price of $3.46 per gallon. a. using the line drawing tool, draw and label the price ceiling. carefully follow the instructions above, and only draw the required object.

Demand increases by less than supply increases. as a result, (a) equilibrium price will decline and equilibrium quantity will rise. (b) both equilibrium price and quantity will decline. (c) both equilibrium price and quantity will rise