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How to calculate involuntary unemployment?

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How to calculate involuntary unemployment?

RichaS
97 posts


I suppose the answer's are a) l=16 and  b) is l=9 so I=36+4*9=72.
But how do we calculate the involuntary unemployment?

Is it 16-9=7?
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Re: How to calculate involuntary unemployment?

Abhitesh
162 posts
Involuntary unemployment is the L_s - L_d.
The answers are correct.
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Re: How to calculate involuntary unemployment?

Asd1995
286 posts
In reply to this post by RichaS
Hi,

Could you clarify your solution of the second part?

Solving the firm's optimising condition,

p*24sqrt(l)-4l is to be maximised which gives p=sqrt(l)/3, so purchases=revenue=8l

so that gives us 4l=earninngs=36 plus purchases=36 plus 8l,, which is redundant.

Help me out please?