Economics 381
Spring 1988
D. Maki
                     FINAL EXAMINATION

Instructions:  Answer any four of the following six
questions.  Questions are equally weighted.  This is a
closed book examination.  Total time allowed:  2 hours.

1.   Explain how a Phillips curve could be negatively sloped
in the short run, but vertical in the long run.  Is it
possible to have a negatively sloped curve if workers fully
adjust to short-run price level changes?  Explain.

2.   Evaluate the following argument:  "Large firms take
longer to discover the 'talents' of their employees than
small firms.  Therefore, anyone who is of above average
ability should seek a first job in a small firm".

3.   Explain how a graph in unemployment rate-vacancy rate
space (sometimes called a Beveridge curve) can be useful in
depicting a disaggregation of unemployment which is policy-
relevant.  Does the rationale for this construct agree with
Reder's theory of frictional unemployment?  Explain.

4.   Discuss the possible effects of the government
provision on Canada Employment Centres on the number of
people who experience some unemployment each year.

5.   If some group (e.g. women) is discriminated against in
the labour market, that group presumably "loses".  What
determines who "gains"?  Does it matter whether
discrimination is based on tastes or beliefs?  Explain.

6.   Assume a group of workers which is presently not
covered under minimum wage legislation has an opportunity to
become covered.  If you are asked to advise them regarding
whether they should accept coverage, what advice would you
give?  Explain.