Suppose that the markup of goods prices over marginal cost is 10%, and that the wage setting equation is w = p (1 - .5u + z), where u is the unemployment rate and z is a variable that reflects the impact of minimum wage policy and unemployment benefits on the wage setting relations.

a. what is the real wage, as determined by the price-setting equation?

b. what is the natural rate of unemployment if z=0.009?

c. suppose that due to the competition the markup of prices over costs decreases to 2%, and z increases to 0.01 due to the changes in minimum wage policy. what happens to the natural rate of unemployment? explain the logic behind your answer.

using the ws and ps relations explain separately the impacts of a reduction and of an increase in the unemployment rate on the real wages.

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.