17. Ann prefers an improving sequence of annual wages 25K, 30K, 35K to the decreasing sequence 35K, 30K, 25K. Her behavior can be explained by (A) discounted utility model with positive discounting; (B) hyperbolic discounting model; (C) procrastination; (D) none of the above.
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- Ann prefers an improving sequence of annual wages 25K, 30K, 35K to the decreasing sequence 35K, 30K, 25K. Her behavior can be explained by (A) discounted utility model with positive discounting; (B) hyperbolic discounting model; (C) procrastination; (D) none of the above.1. The absolute value of the slope of the consumption-leisure budget line is the after-tax wage, W. Suppose some workers (L1) earn W for up to 40 hours of work each week, and then earn 2W for any hours worked thereafter (called overtime). Other workers (L2) earn W for up to 40 hours of work each week, and then only earn 0.5W thereafter as working more than 40 hours requires getting a second job which pays an hourly wage less than their primary job. Both types of workers experience a “kink” in their consumption-leisure budget line. A. Refer to graph. Which one of the statements below describes the consumption-leisure budget line for L1 and L2 a. L2 budget line is CBT-40 b. L2 budget line is ABT c. L1 budget line is CBT d. L1 budget line is ABT B. Refer to graph. Which type of worker is likely to work up to the point of the kink? a. L1 b. L2 C. Refer yo graph. Which type of worker is likely to choose a consumption-leisure bundle far away from the kink a. L1 b. L2What are the factors contributing to The Stolper-Samuelson Theorem’s discrepancies involving factor price equalization issues?
- , and you are considering a self-employment opportunity that may pay $10,000 per year or $40,000 per year with equal probabilities. What certain income would provide the same satisfaction as the expected utility from the self-employed position? a) $22,500 b) $15,000 c) $27,500 d) $25,00Optimal unemployment insurance: Consider the following two proposals toreform unemployment insurance. Explain the arguments for and against eachreform.(a) Te insurance payment would be increased so that it replaced 100% of aworker’s regular labor income for 26 weeks.(b) Each worker would be paid a lump sum equal to 10 weeks of his or herlabor income at the start of the spell of unemployment. Tere would thenbe no other payments.A 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.
- Consider a competitive economy that has four different jobs that vary by their wage and risk level. The table below describes each of the four jobs.Job Risk ( r ) Wage ( w)A 1/5 $ 3B 1/4 $12C 1/3 $23D 1/2 $25All workers are equally productive, but workers vary in their preferences. Consider a worker who values his wage and the risk level according to the following utility function:u(w, r) = w + 1/r2Where does the worker choose to work? Suppose the government regulated the workplace and required all jobs to have a risk factor of 1/5 (that is, all jobs must become A jobs). What wage would the worker now need to earn in the A job to be equally happy following the regulation?Consider an income guarantee program with an income guarantee of $5,000 and a benefit reduction rate of 40%. A person can work up to 2,000 hours per year at $10 per hour. a. Draw the person’s budget constraint with the income guarantee. b. Suppose that the income guarantee rises to $7,500 but with a 60% reduction rate. Draw the new budget constraint c. Which of these two income guarantee programs is more likely to discourage work? Explain. 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.A3 in the McCall partial equilibrium model, if unemployed individual can only live for 10 periods. In each period, she will receive $400 if unemployed. The offered wage is uniformly distributed in the range of [500,1000] 1.what will the reservation wage be in the period 9 if the discount rate is 0.9? 2.what will the reservation wage be in the period 8 if the discount rate is 0.9?
- (6) What does efficiency-wage theory suggest as an alternative to this decision of wage and/or headcount reduction?Derive the utility function of a worker who is aiming to maximize his utility in the market for risky jobs. Explain and illustrate graphically how this worker will be making his choice among different alternatives of risk/wage combinations.Explain how Hick's Paradox challenges the traditional assumption of monotonicity in consumer preferences and its implications for welfare economics.