below is the key figure of the labour market model that we considered in the lectures labour for

Step 1: Innovation in home electronics leads to the adoption of new equipment that reduces the d

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Below is the key figure of the labor market model that we considered in the lectures: Labour force Wage-setting curve Average product of labor, 8 2 Price-setting curve Employment; N Employed Unemployed Imagine that there are innovations in home electronics. Assume that the innovations do not affect the size of the labor force or labor productivity, but they do make unemployment less unpleasant. Also, assume that the innovations do not affect firms' profit margins. Now, using the figure above, explain what happens to unemployment.

          Below is the key figure of the labor market model that we considered in the lectures:
Labour force Wage-setting curve
Average product of labor,
8 2
Price-setting curve
Employment; N
Employed
Unemployed
Imagine that there are innovations in home electronics. Assume that the innovations do not affect the size of the labor force or labor productivity, but they do make unemployment less unpleasant. Also, assume that the innovations do not affect firms' profit margins. Now, using the figure above, explain what happens to unemployment.

Added by Sonya M.

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