1.2.3 A more infectious and deadly COVID-19 variant is discovered 1.3 Do firms always pay wages that are equal to their workers' reservation wages? Why or why not?
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- Explain how the reservation wage is determined in the one-sided search model.Select whether True or False An example of economic discrimination is the creation of "ethnic" neighborhoods. In this example, econornic discrimination allows for society to keep "undesirable" elements and people out of certain ares of a city. Therefore, it is a means of keeping certain areas of the city more economically valuable, especially in terms of property values. True FalseA firm is considering adopting a plan in which it would pay employees less than their MRPL early in their careers and more than their MRPL late in their careers. For a typical worker at the firm MRPL = 10 + 0.1T, where T = the number of years which the worker has been employed at the firm and MRPL is measured in dollars per hour. The worker’s wage per hour is W = 8 + 0.2T. Assume that this wage is high enough to attract workers from alternative jobs, that the discount rate for the firm is zero, and that the expected tenure of a typical worker is 35 years. If workers retire after 35 years, will this plan be profitable for the firm? Explain. For how many years will the firm “underpay” it workers? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- You have the following equation relating job risk R to wages W: W = .01*R + XB, where XB indicates control for the following confounders: education, job experience, and income. Assume W= annual wages=50,000 A. If the change in R = a 1 in 10,000 higher chance of death in a year, how much more would an individual need to be paid to be willing to assume this risk? B. What is the implied statistical value of a year of life based on this model? C. What do you think would happen to the estimated relationship between R and W if none of the three confounders were included in this model? Explain.There are 81 white seniors graduating from high school and 27 black seniors. a. All of the students with high school degrees apply to UW – Milwaukee. The admissions office looks at their records, and finds that 30% of black students drop out after the first year, compared to 15% of white students. If they have 85 openings, how many of each type of student should the admissions office hire to maximize their graduation rate? b. Suppose there is no difference in graduation rates between black and white students. However, the admissions office wants students who will get good grades. They don’t have access to grade histories of different students, but they can see that all 26 of the 27 black applicants went to high school in Milwaukee, whereas 70 of the 81 white applicants went to schools in the suburbs. The schools in the suburbs have very good academic ratings, whereas the schools in Milwaukee do not. If they have 85 openings, how many of each type of student should the admissions…Suppose the labor market is segmented into two distinct markets: the market for low-skill workers and the market for high-skill workers. Furthermore, suppose the competitive equilibrium wage in the low-skill market is $7.00/hour, while the competitive equilibrium wage in the high-skill market is $20.00/hour. If the minimum wage is set at $10.00/hour, which market will exhibit the greatest amount of unemployment? Demonstrate it graphically.
- Years ago, the Spanish Airline – Iberia, was near bankruptcy. To get out of this situation, the company forced its pilots to take pay cuts. When the financial situation improved, the company refused to reverse the cuts and pay salary increases due to inflation. The pilots perceived that as unfair (as compared to other pilots in the industry) and staged a work slowdown (call in sick for 10 days in a row). From Equity theory perspective, the staged work slowdown is an example of which inequity response? Changing outputs Leaving the situation Choosing a different reference Distorting perceptions of self Changing inputs17 Medicaid work disincentive effffects. Consider Figure 18.7, which depicts the labor market disincentive effffects of Medicaid. In the fifigure: L is the number of hours worked per year. ¯I is the income threshold for Medicaid eligibility. If a worker earns less than I¯, he is eligible for C free units of health care, which cost p per unit on the open market. The solid line indicates the total compensation (wage plus Medicaid benefifits) that a worker earns as a function of L, hours worked. The slope of the solid line reflflects the hourly wage. a. The interval from L1 to L2 is called the Medicaid notch or, less colorfully, the Medicaid work disincentive region. Explain why an individual does not elect to work between L1 and L2 hours. Figure 18.7. The Medicaid notch.(Imaged is attached) b. In this model, the value of Medicaid to the worker is set to the price of health care times the quantity of health care transferred (pC). Is pC more than, less than, or equal to the value…b. Suppose that due to the opening of trade, the price of components falls by Δ PC/PC = –10%, and the price of R&D remains unchanged, ΔPR/PR = 0. Calculate the change in the wage of skilled and low-skilled labor. ΔWageHigh-skilled is __% ΔWageLow-skilled is __% c. What has happened to the relative wage of high-skilled/low-skilled labor? Does this match the predictions of the offshoring model in this chapter?
- Discuss the need for ethical frameworks in the employment sphere.Presently, there is a minimum and maximum social security benefit paid to retirees. Between these two bounds, a retiree’s benefit level depends on how much she contributed to the system over her work life. Suppose Social Security was changed so that everyone aged 65 or older was paid $12,000 per year regardless of how much she earned over her working life or whether she continued to work after the age of 65. How would this likely affect hours worked of retirees?Why do efficiency wages generate involuntary unemployment? What factors prevent the market from clearing in efficiency wage models?
