Assume there are only two jobs and that both jobs use the skill set possessed by both Preferred (P) workers and Non-Preferred (NP) workers. Job 1 has only P workers; job 2 has Pand NP workers. Based on the Employee (Co-Worker) Taste Discrimination Model, if job 1 pays $18/hour and job 2 pays $24/hour, ceteris paribus: job 2 will employ more NP workers than P workers. a P worker with a dew 0.20 will choose job 1. O a P worker with a dew" 0.20 will choose job 2. O a P worker with a dew 0.20 will be indifferent between job 1 and job 2.
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- In the specific factor model with two goods 1 and 2 and labour as the mobile factor, in the autarky equilibrium it must hold that A P1MPL1=P2MPL2 for marginal labour productivities MPL1 and MPL2 B MPL1=MPL2 for marginal labour productivities MPL1 and MPL2 C the wage w is given by w=MPL1/MPL2 D the wage w is given by w=P1/P2Suppose there are two identical job offers in the same competitive labor market for a software developer position. Both offers have the same salary of $80,000 per year. However, Job A allows the employee to work from home, while Job B requires the employee to commute to the office daily. The average monthly commuting cost for Job B is estimated to be $400. Calculate the compensating differential in this scenario, and determine if it makes economic sense for the employee to choose Job B over Job A. Assume a working year consists of 12 months.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.
- 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 discrimination coefficient increases as the firm employs more black workers. In particular, suppose the discrimination coefficient is d = 0.01 EB where EB is the number of blacks hired by the firm so that each employer facing competitive wages of wW for whites and wB for blacks acts as if she faces competitive wages of wW for whites and wB(1 + d) for blacks. As usual, assume the labor market is competitive so that the firm faces wages of wB and wW. Lastly, assume that the firm must employ 200 workers. Define the wage ratio to be wW / wB and do the following:a. Solve for the number of blacks hired as a function of the wage ratio. Graph the number of blacks hired against the wage ratio.b. Solve for the number of whites hired as a function of the wage ratio. Graph the number of whites hired ( x-axis) against the wage ratio ( y-axis).After controlling for age and education, it is found that the average woman earns $0.80 for every $1.00 earned by the average man. After controlling for occupation to control for compensating differentials (i.e., maybe men accept riskier or more stressful jobs than women, and therefore are paid more), the average woman earns $0.92 for every $1.00 earned by the average man. The conclusion is made that occupational choice reduces the wage gap 12 cents and discrimination is left to explain the remaining 8 cents.a. Explain why discrimination may explain more than 8 cents of the 20-cent differential (and occupational choice may explain less than 12 cents of the differential).b. Explain why discrimination may explain less than 8 cents of the 20-cent differential.
- 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 FalseThere are 50 workers in the economy in which all workers must choose to work a safe or a risky job. When it comes to accepting a risky job, Worker 1’s reservation price is $5; worker 2’s reservation price is $6, worker 3's reservation wage is $7, and so on. Assume there are exactly 12 risky jobs. (a) What is the equilibrium wage differential between safe and risky jobs? Which workers will be employed at the risky firm? (b) Suppose now that an advertising campaign, paid for by the employers who offer risky jobs, stresses the excitement associated with “the thrill of injury,” and this campaign changes the attitudes of the work force toward being employed in a risky job. Worker 1 now has a reservation price of $1, worker 2’s reservation price is $2, and so on. There are still only 12 risky jobs. What is the new equilibrium wage differential? c) What is the maximum the firm should be willing to pay for its ad campaign?Assume we are investigating gender differences in labor market outcomes and we are analyzing employee discrimination. When discussing employee discrimination, the typical assumption is that two groups of workers are perfect substitutes. Some research, however, suggests that worker productivity rises when the diversity of the workforce in a firm increases. This implies that the marginal productivity of male workers increases as more female workers are hired. If employee discrimination occurs against women, under what conditions will a gender-segregated workforce exist? Will a wage gap between men and women exist? Explain your answer.
- Consider a worker who is endowed with T hours of time and investment income V per week, faces a wage rate w per hour, and whose preferences over the consumption of goods, the price of a unit of which is p, and leisure can be represented by the utility function U(C,L) = C1/2L1/2. Find the worker’s labour supply. When is it positive? Will the worker ever work more than half their time endowment? (25%)Assume that the labour market for mechanics is competitive and that it is differentiated into two groups: male and female. Assume that the mechanics in this market have vehicle repair ability regardless of whether they are male or female. Currently, the equilibrium wage in the female market is lower than in the male market. Further assume that the market for vehicle repair is competitive. If some consumers in the market for vehicle repair have a strong preference for having their vehicle repaired by a male mechanic, what will result? Question 34 options: The difference in wages will eventually disappear since vehicle repair is a homogeneous good. Mechanic shops that hire male mechanics will be able to charge a higher price for vehicle repair. Mechanic shops that hire female mechanics will be much more profitable. Mechanic shops that hire male mechanics will be much more profitable.Consider worker 1 with non-labour income Y facing a wage offer w and a utility function defined over consumption and leisure. U(c,l) = lnC + 4lnl a) Compare worker 1 with worker 2 whose utility function is described by U(c,l) = cl. Which worker places a higher value on labour market work? b) Suppose the worker participates in the labour market. Derive worker’s compensated labor supply function and the compensated labour supply elasticity with respect to wage as a function of utility level and wage. c) Derive worker’s uncompensated labour supply function (for labour market participants and non-participants) and the uncompensated labour supply elasticity (for labor market participants) with respect to wage as a function of non-labour income and wage.