Economics: Private and Public Choice (MindTap Course List)
15th Edition
ISBN: 9781285453538
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 26, Problem 9CQ
To determine
Differences in the wage earnings and the abilities of workers.
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Chapter 26 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- What is the opportunity cost associated with doing your homework and earning your degree? What have you sacrificed and what long-term gain is expected? How do these factors play into labor supply and demand, or what terminology is used in our readings to explain this phenomenon?arrow_forwardWho are the key actors in the labor market? What motives do economists typically assign to workers and firms?arrow_forwardSuppose Kara maximizes her profits by hiring workers to produce hand-made soaps. Her soaps sell for $1 each. How should Kara decide on how many workers she should hire? a.Hire workers up to the point when the price of her soaps starts to fall from $1 b.Hire workers up to the point when the total product of all her workers is at its maximum c.Hire up to the point when the wage rate equals to the value of the marginal product of the last worker hired d.Hire up to the point when the marginal product of the last worker hired is equal to zeroarrow_forward
- Use your knowledge of household production theory to indicate the following: a) The expected effect of a wage increase on women’s labour supply. b) The expected effect of an increase in the wage of a women on the demand for children. c) Why the substitution effect for labour supply may be larger for women than men. d) The effect of a spouse’s disability on the other person’s labour supply, where the spouse requires home (not institutional) care. e) The effect on the same spouse’s labour supply, as in (d), if the government (or private insurance) provided financial compensation to the family.arrow_forwardShort answer question. Discuss how a firm’s demand for labor and the wage rate might change if the market were to become imperfect.arrow_forwardUse the following graph, which depicts Mighty Max’s labor demand for his duffel bag business, to answer the following questions. The labor demand curve shown is calculated based on a duffel bag price of $10. Assume that the price per duffel bag rises from $10 to $20. What is the value of the marginal product of labor of the twentieth worker? A. $50 B. $70 C. $60 D. $30 E. $40arrow_forward
- What is labor economics? Which types of questions do labor economists analyze?arrow_forwardwhat is a labour related theoryarrow_forwardSuppose the following graph shows the earnings trajectory of college-educated workers (orange line) and of workers with only a high school diploma (blue line), through age 34. Use the grey quadrilateral (star symbols) to shade the area representing the direct costs of attending college for four years. Then use the purple quadrilateral (diamond symbols) to shade the area representing the opportunity cost of attending college for four years rather than entering the work force immediately after completing high school. Finally, use the green quadrilateral (triangle symbols) to shade the area representing the difference in earnings between college graduates and high school graduates between the ages of 22 and 34. Hint: Be sure that the coordinates of the end points of the quadrilaterals are exactly the same as the coordinates of the areas they are to cover. Once the quadrilateral is in place, dick on it to show the value of the shaded area. ? 100 8 8 8 8 EARNINGS AND COST (Thousands of…arrow_forward
- ''A firm should never employ another worker if the new person causes diminishing returns''. Is statement correct? if so why? if not explain why not?arrow_forwardhow will each of the following scenario impact the market for labour. workers become more concerned about the future and terefore wish to increase their hours of work, at the same time there is an increase in capital stock which makes workers more productive.arrow_forwardYou are given a scenario where this a change in a factor of production or a change in demand for an item. You need to explain in sentence form how this would change demand for labor. 1. Apple develops the iPhone and demand for it surges as people realize the benefits of this improved technology. You manufacture flip phones.arrow_forward
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