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What can make wages be set at a level above equilibrium therefore creating unemployment?
Wiki User
∙ 10y ago
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Wiki User
∙ 10y ago
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When a surplus of a product will arise when price is above equilibrium or below equilibrium?
above equilibrium
What is natural rate of unemployment?
The natural rate of unemployment is the rate that holds over the long-run in equilibrium. In Classical economics, this rate is 0%. With other assumptions, such as frictional and structural unemployment, you will get a natural unemployment rate above 0%. Source: http://www.transtutors.com/homework-help/macro-economics/unemployment/full-employment/
How do unions affect the natural rate of unemployment?
Unions may affect the natural rate of unemployment via the effect on insiders and outsiders. Because unions raise the wage above the equilibrium level, the quantity of labor demanded declines while the quantity supplied of labor rises, so there is unemployment.
What is the difference between equilibrium and disequilibrium price?
Equilibrium is when supply and demand is balanced or equivalent, whereas disequilibrium doesn't attain equilibrium which is either above or below equilibrium.
Why price ceiling and price floor is binding?
A price ceiling is binding when it is below the equilibrium price. It is the legal maximum price, so the market wants to reach equilibrium (which is above that) but can't legally. If it were above the equilibrium price it would not be binding because the market would reach equilibrium and the ceiling would have no effect. A price floor is binding when it is above the equilibrium price. You can use similar reasoning to that above. It is the legal minimum price. the market wants to reach equilibrium below that but can't legally.
What happens to consumer surplus if the price is above equilibrium?
When the price is above equilibrium, there is a surplus because supply is greater than demand. The price of the good will naturally decrease back to its equilibrium price where demand and suppy interesect, thus eliminating the surplus.
What is the highest point above the equilibrium position called?
crest
What happens when wages are set above the equilibrium level by law?
Firms employ fewer workers than they would at the equilibrium wage.
What is the gas pressure above a liquid at equilibrium called?
Vapor pressure
When market price is above equilibrium price?
When supply and demand are balanced
Is Florida extending weeks above the six months of unemployment?
No
Is minimum wage a price floor or ceiling?
Price floor- Minimum wage, if above the market equilibrium then unemployment Price ceiling- rent control, so more people are able to live comfortably. but this can be negative when the too high of price is confused with the too low of supply.
