1. (10 marks) The Canada Summer Jobs program provides wage subsidies to employers from not-for-profit organizations, the public-sector, and private sector organizations with 50 or fewer full-time employees, to create quality summer work experiences for young people aged 15 to 30 years.
Not-for-profit employers are eligible to receive funding for up to 100% of the provincial or territorial minimum hourly wage. Public and private sector employers are eligible to receive funding for up to 50% of the provincial or territorial minimum hourly wage.
(https://www.canada.ca/en/employment-social-development/services/funding/canada-summer-jobs.html)
Assume that the demand for youth workers in the private sector of Nova Scotia’s economy is D = 210 – 2W and the supply of workers is S = 8W, where W is the hourly wage rate. Calculate the impact of the Canada Summer Jobs program on employment and wages of youth workers in Nova Scotia.
2. (5 marks) Analyze how a reduction in international trade barriers can affect the labour market in dairy production.
3.
a. (5 marks) Suppose an individual has Cobb-Douglas preferences: U = cβl1-β, where β is a constant that lies between zero and unity. Suppose that the individual has zero non-market income and faces the constant hourly wage W0. Determine his optimal choice of consumption and leisure. What happens to his choice of leisure as the wage increases? Why?
b. (5 marks) Commuting time costs are becoming an ever greater part of our lives, as road congestion continues to increase. Suppose that utility takes the standard form U = u(c,l) and that the budget constraint is c = A0
+ w.h where h is hours worked. Let Q denote the commuting time. What is the effect of increase in Q upon l and h?
c. (5 marks) Suppose that Daves receives a weekly welfare payment of $240, T = 168, and his utility is given by u = 3√(c.l). What is his reservation wage? Now suppose his welfare payment rises to $720. What is his reservation now?
4. Consider the market for online workers (Google, Amazon.com, etc.) to be monopsonistic (they appear to have an agreement not to compete for workers, (https://equitablegrowth.org/monopsony-market-power-labor-market/)
based upon the following facts: The product market is competitive, with p = $100, f(L) = 1.2L -0.01L2, and W(L) = 2L.
a. (5 marks) How does the monopsony outcome compare with a competitive one?
b. (5 marks) Suppose a minimum wage is set at $50. What will happen to employment of pharmacists?
(5 marks) Do a quick search online to discover if the market for workers in ride sharing industries appear to be competitive or monopsony type. Explain how you arrived at your conclusion