MACROECONOMICS >C< W/MYECONLAB
18th Edition
ISBN: 9781323886038
Author: Pearson
Publisher: Pearson Custom Publishing
expand_more
expand_more
format_list_bulleted
Question
Chapter 21, Problem 2.3P
To determine
Identify the correlation between years of schooling and date of birth.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A recent trend in health insurance is the Health Savings Account (HSA). The idea behind Health Savings Accounts is that rather than providing employees with health insurance that makes visiting doctors cost little more than a simple $10 or $20 copay the employer gives the employee money to use to spend on health care, but the employee bares the entire cost of seeing the doctor. What money given for health care not spent by the employee can be withdrawn by the employee as if it was additional income.
It is believed that Health Savings Accounts will reduce the total amount of money spent on seeing doctors. Using Supply and Demand analysis, explain why there is the expectation that HSA’s will reduce spending on doctors.
Suppose the government of Marina decides to pay for public radio by taxing people on the basis of the number of hours they listen
to it. In order to determine the tax, it decides to conduct a survey. However, if the survey is based on voluntary self-reporting.
which of the following is likely to happen?
In order to evade taxes, individuals may shift from the formal, reported economy to an underground, "off the books"
economy.
Many individuals may understate the number of hours they listen to public radio to government in order to reduce their tax
bill.
c. People who report many hours of listening may pay a small proportion of their income in public radio tax.
Many individuals may overstate the number of hours they listen to public radio to government in order to receive a lower tax
bill.
e. Individuals with higher incomes may pay lower taxes than individuals with lower income.
Mr. Diether and Ms. Christine are both in the show business industry. Mr. Deither is a photographer and Ms. Christine is a model. After a few years of getting to know each other, they decided to live together. They started living together on June 1, 2001. Unfortunately, after a month, they have decided to go on their separate ways. During the period that they are still living together, Mr. Diether captured a beautiful photo of the sunset in Baguio on June 10, 2001. When Mr. Deither is doing the photoshoot, Ms. Yen helped him, as a friend, arrange the scene. On the other hand, Ms. Christine is doing her own modeling gig in Manila. Ms. Christine has no contribution to Mr. Deither's photoshoot. After 5 years of the beautiful photo being taken, it is awarded as the Best Photo in December 2006. The reward is valued to be of 100,000 Pesos. Does Ms. Yen have any claims to the reward?
Chapter 21 Solutions
MACROECONOMICS >C< W/MYECONLAB
Knowledge Booster
Similar questions
- You are considering taking an econometric software course: R or STATA. The tuition is $1000, and knowing one of these software will generate lifetime earnings of $100,000. (Assume that those earnings are all realized one year after getting the software certificate.) Firms are going to use either STATA or R. There is a 50% chance that all companies use STATA and a 50% chance that they use R; a hearing is scheduled for the coming year, and if they decide to use only R (STATA), learning STATA (R) leads to zero income. Should you enroll in an econometric software course today, or should you wait until companies reach their decision? Assume a nominal interest rate of 12% and an inflation rate of 2%. Explain all assumptions you use for your answer.arrow_forwardThe economic activity of a country is often quantified as the gross domestic product (GDP), which is the sum of private and government consumption, investments, and net exports (the value of exports minus the value of imports). For a developed country such as the United States, economists might see a GDP growth rate of 3% a year as reasonable. However, production and consumption create some pollution. By how much would pollution per dollar of GDP have to decline for pollution levels 50 years from now to be the same as current levels, assuming a 3% annual growth rate of GDP? In 75 years? In 100 years? (Hint: Let the current pollution level be 1 and find out what the future pollution level would be).arrow_forwardAccording to the Centers for Disease Control and Prevention, a 40-year-old woman has a 15 in 10,000 chance of dying in the next year. If a group of 670 women who are 40 years old wish to purchase a life insurance policy that will pay $1,000,000 if they die in the next year, how much will an insurance company charge each of these women this year for an actuarially fair policy? Assume that payouts on policies are the insurance company's only costs. Round your answer to the nearest whole dollar. charge per woman: $__arrow_forward
- Question Mary and Jason are a new couple trying to understand their family production plans. Suppose they conduct two types of production: household production (HP) and market production (MP). If Mary carries out household production, her production value is equivalent to $20 each hour. If she does market production, she gets paid $15 each hour. Jason's production value is $12 per hour if he does household production. If he does market production, he gets paid $25 per hour. Assume Mary and Jason each work 8 hours on a typical workday. a) Calculate and depict Mary and Jason's daily production possibilities. b) Assume Mary and Jason conduct market production, only. Calculate and depict the family production possibility. If they wish to keep some household production, who shall do it, and what will be the new production possibility? Show it in a graph. c) Alternatively, if Mary and Jason conduct household production only, what would be the family production possibility? If they wish to…arrow_forwardWith a certain medical insurance policy, the customer must first pay an annual $350 deductible, and then the policy covers 70% of the cost of x-rays. The first insurance claims for a specific year submitted by a person are for two x-rays. The first x-ray cost $600, and the second x-ray cost $900. How much, in total, will he need to pay for these x-rays? He will be responsible for $arrow_forwardYou are the mayor of a small town with 2000 residents. The head of your economic development agency recently conducted a survey in which the 2000 residents said that a public concert in the centre of town would be worth $20 to each of them. Since it costs only $5000 to hold the concert, you organized and held the concert, which everyone in town enjoyed. But when you asked for donations to pay for the concert, you only collected $30 in total. What do you know? Question 88 options: The concert was an example of the Tragedy of the Commons. From the standpoint of total costs and benefits, the cost of the concert certainly exceeded the benefit. The survey certainly overstated how much the concert was worth to each resident. Residents of the town were probably free riders.arrow_forward
- Question 2Large majorities in the 11 emerging and developing countries surveyed either own or share a mobile phone, and in every country it is much more common to own one’s own phone than to share it with someone else. In seven of these countries, half or more now use smartphones – and smartphone use is especially common among younger and more educated groups. As an economist how will you evaluate the income effect on technology?arrow_forwardmacroeconomics Q2: Three students have each saved $1,000. Each has an investment opportunity in which he or she can invest up to $2,000. Here are the rates of return on the students’ investment projects: Harry 5 percent Ron 8 percent Hermione 20 percent If borrowing and lending is prohibited, so each student uses only his or her saving to finance his or her own investment project, how much will each student have a year later when the project pays its return? Now suppose their school opens up a market for loanable funds in which students can borrow and lend among themselves at an interest rate r. What would determine whether a student would choose to be a borrower or lender in this market? Among these three students, what would be the quantity of loanable funds supplied and quantity demanded at an interest rate of 7 percent? At 10 percent? At what interest rate would the loanable funds market among these three students be in equilibrium? At this interest rate, which…arrow_forwardSuppose that Timmy lives in a neighborhood where graffiti is common. People's cars and the sides of houses are often vandalized with graffiti In response to the vandalism, the people in the neighborhood have proposed a voluntary community fund to pay for extra police patrols. There are 1000 people in Timmy's neighborhood, and each is recommended to contribute $10 a month Timmy's car has recently been vandalized and he is concerned it may happen again. Although he believes that he will benefit from the extra police patrols, Timmy has decided to take a free-rider approach Given his thinking, how much will Timmy contribute to the fund? Timmy's contribution: $ Assume that the entire neighborhood has the same mentality as Timmy. What will occur? The rate of graffiti in the neighborhood will increase significantly Everyone will contribute money towards the community fund, yielding higher rates of police patrol and less graffiti No one will contribute to the community fund, resulting in no…arrow_forward
- 5. 7) Fifteen years ago, the town of Easton decided to increase its annual spending on education so that its high school graduates would be able to earn higher wages. Now Easton has asked you to evaluate the effectiveness of the spending increase. Their data show that before the spending increase, the average salary of recent high school graduated was $25,000 and that now the average salary has risen to $28,500. Fortunately for your analysis a neighboring community did not change its annual spending on education. In the other town 15 years ago high school graduates earned an average of $22,500, and now the average is $23,750. a) Use a differences-in-differences estimator to determine whether Easton’s spending increase potentially caused the wages of high school graduates to rise. b) What underlying assumption do you have to make in order for your estimate to be valid? What might cause that underlying assumption to not be valid?arrow_forwardAli is a member of a family that consists of him, his father, his mother and his older brother. Each member of the family has his own mobile phone. Each mobile phone is on a post-paid plan, for which a monthly bill is received at the end of each month. The electricity, on the other hand, is provided to the entire house in general, with one bill is received at the end of each month. The father has recently received the phone bill of Ali and wishes to do some analysis of the phone consumption. Assuming that the value of the phone bill is calculated based on the number of minutes consumed with no subscription fees. In the above information, the cost of the phone bill to Ali is: a. An indirect fixed cost O b. An indirect, variable cost C. An indirect mixed cost d. A direct fixed cost A direct, variable cost O e.arrow_forwardA bank has $5 million in capital that it can invest at a 5 percent annual interest rate. A group of 50 workers comes to the bank wishing to borrow the $5 million. Each worker in the group has an outside job available to him or her paying $50,000 per year. If the group of workers borrows the $5 million from the bank, however, they can set up a business (in place of working their outside jobs) that returns $3 million in addition to maintaining the original investment. a. If the bank has all of the bargaining power (that is, the bank can make a take-itor- leave-it offer), what annual interest rate will be associated with the repayment of the loan? What will be each worker’s income for the year? b. If the workers have all of the bargaining power (that is, the workers can make a take-it-or-leave-it offer), what annual interest rate will be associated with the repayment of the loan? What will be each worker’s income for the year?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning