1. What is meant by job search? How does it lead to frictional unemployment? 2. What is the difference between efficiency wage and market-clearing wage? 3. Sometimes new technology in production...

1. What is meant by job search? How does it lead to frictional unemployment?

2. What is the difference between efficiency wage and market-clearing wage?

3. Sometimes new technology in production reduces the time that a worker takes to complete a task. Technological innovations can also completely replace a factory worker. Does this mean that technological progress will lead to large-scale unemployment? Explain your answer.

4. What is wage rigidity? List and explain two factors that can increase wage rigidity in the labor market.