Enter aggregate supply - Why is there unemployment in equilibrium? - Insiders and Outsiders
3 important questions on Enter aggregate supply - Why is there unemployment in equilibrium? - Insiders and Outsiders
What visual property do trade union indifference curves have when the trade union is only interested in the insiders?
They have a kink at the current employment level, the indifference curve turns horizontal in this point
How can the reversal of a supply shock create collective voluntary unemployment and involuntary individual unemployment when the union is interested in insiders?
The wages are determined on a certain supply of labour, when they are interested in insiders the indifference curve becomes horizontal and lowering wages is not an option. This way the union creates a group of voluntary unemployed workers because the wages are to high for the firms to employ new workers. This is equivallent to involuntary individual unemployment
What insider-outsider theory not relying on the existence of unions results in involuntary unemployment?
The fact that some knowledge that can only be acquired within the firm and the turnover costs (firing and hiring) can give insiders a situation where they receive a premium over outsiders
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
