Graphical Analysis Image and 1 paragraph Must include an app

Graphical Analysis (Image and 1 paragraph)

Must include an approved economic model having the correct labels.

When applicable, the model must show the change implied by the article summary.

(Note: trend lines or graphs from the internet will not meet the requirement for this part of the paper)

Give a clear concise and accurate description of the change that occurs on the model. Discuss the concepts that define the model if a change is not applicable.

Unemployment Real Wage (W) W.F L2 L3 L Employment (or Labour, L)

Solution

In the diagram above labor market equilibrium is depicted . The equilibrium is determined by interaction of demand and supply of labor which gives the level of employment at a particular real wage rate .

Here , the there is leftward shift of labor demand curve from D1 to D2 . So equilibrium wage rate falls and equilibrium level of employment also falls . There is downward movement along supply curve . The wage rate that was previously prevalent in the market : W1 , hired L1 amount of labor but now it hires L2 . So unemployment is given by L1 - L2 .