Econ past paper II 2006 Q 6

2007-04-19 9:22 pm

It was reported that in late 2004, there were millions of unemployed people in the countryside of the Chinese mainland. On the other hand, the firms in the Peral River delta faced a labour shortage problem.

Which of the following would reduce unemployment in the countryside?
(1) The social welfare benefit of workers in the Pearl River delta improves.
(2) Labour wages in the Peral River delta fall.
(3) Firms in the Peral River delta move to the countryside.

更新1:

A. (1) and (2) only B. (1) and (3) only C. (2) and (3) only D. (1), (2), (3) Ans. B Why statement 2 is incorret?

回答 (1)

Danny

2007-04-19 9:33 pm

✔ 最佳答案

(1) The improved social welfare benefit in the Pearl River Delta attracts more people, especially those unemployed people in the countryside to move to the region, thus reducing the unemployment in the countryside.

(2) Lowering labour wage in the Pearl River Delta would worsen the shortage problem in the region, because at a lower wage the quantity supplied for labour is even lower than the quantity demanded. This has nothing to do to the unemployment problem in the countryside or even worsens it as some people may choose to move back to the countryside as a result.

(3) Firms moving to the countryside will raise the demand for labour in the countryside. So the excess of quantity supplied over quantity demanded is narrowed at the prevailing wage rate level.

👍 0 👎 0