Attempts2 verage 27/4 Structural unemployment s sometimes sed to resit froma mon

Question

Attempts2 verage 27/4 Structural unemployment s sometimes sed to resit froma monotch between the rob skli that emplorers went and the Nb sklth-workers have. t To explore this idea, consider an economy with two industries: manufecturing and siroraft manufacturing ssme that workers in these two industries require sinilar amourts of training and they can choose which nduay to their careers. True cr True False ms would cause the demand for labor in the auto manufacturing "dustry to- ndustry to Suppose that workers in one industry cannot be quickly retrained for the other Wages in the aut tt O Type here to search

Explanation / Answer

1 the answer is False

Reason - Wages between the two industries would be equal. If not, new workers would choose the
industry with the higher wage, pushing the wage in that industry down.

2. Suppose the economy opens up to international trade and, as a result, starts importing autos and exporting aircraft.

This would cause demand for labor in auto industry to decline, and demand for labor in aircraft industry to increase

Importing autos would mean higher supply of goods thus less demand for manufacture resulting decline in demand for labor

Exporting aircraft would mean lower supply of goods thus more demand for manufacture resulting increase in demand for labor

3. Suppose workers in one industry cannot be quickly retrained for the other industry,

Applied options :

4. If for some reason wages fail to adjust to new equilibrium there will be shortage of workers in aircraft industry and surplus of labor in auto industry

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