Assumptions of a Simplified Firm Hiring Model
In a simplified model of the labor market, several assumptions are made about how a firm hires workers. It is assumed that the firm hires exclusively from the pool of unemployed individuals, ignoring job-to-job transitions. All potential workers are considered equally productive. Furthermore, the employer offers a non-negotiable ('take it or leave it') wage, and this wage is the same for all workers.
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Introduction to Macroeconomics Course
Ch.1 The supply side of the macroeconomy: Unemployment and real wages - The Economy 2.0 Macroeconomics @ CORE Econ
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- Curve B (for City B): Starts at a higher wage than Curve A and rises much more gradually. A large increase in the wage is needed to attract a similarly large number of additional workers.
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