LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 5, Problem 10P
(a)
To determine
Explain the given statement.
(b)
To determine
Determine the relation between teachers’ salaries and school quality.
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Proponents of comparable worth justifies it on the ground that:
1. interaction of demand and supply correctly determines the wage rate.
2. as a result of personal prejudices the market is unable to assess marginal products.
3. interfering with the functioning of the labor market will lead to excess supplies of labor.
4. market correctly processes the innumerable information which is available.
5. interfering with the functioning of the labor market will lead to shortages of labor.
Boeing created, and recently expanded, an airplane manufacturing center in Charleston, South Carolina. One of the factors that likely influenced this location decision is that South Carolina is a "right to work" state. This represents
a) a place factor related to labor.
b) a transportation factor related to the market.
c) higher wages for Boeing workers in South Carolina relative to Washington.
d) a place factor related to the political environment.
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.
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- The imposition of a binding minimum wage makes all workers affected by it better off.Explain why above statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate.arrow_forwardtrue or false? The entrance of more workers into a particular labor market is likely to drive down the wage in that marketarrow_forwardThis figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D1 and D2 are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market.  Refer to Figure 18-4. Which of the following is a possible explanation of the shift of the labor-demand curve from D1 to D2?  Question 17 options:  The wage earned by automobile workers increased.  The opportunity cost of leisure, as perceived by automobile workers, decreased.  The price of automobiles increased.  Large segments of the population changed their tastes regarding leisure versus work.arrow_forward
- Which of the following is an example of an efficiency wage? a. A higher wage paid to a more experienced worker   b. A below-equilibrium wage paid by a small business exempt from minimum-wage laws   c. An above-equilibrium wage paid by a firm to reduce turnover costs.   d. A wage tied to participation in a government-sponsored job training programarrow_forwardMichael Scott owns a bakery and is considering hiring two more workers, Pam and Jim. Suppose that the market wage for another worker is $90 per day. Pam would generate a daily marginal product of 5 cakes, while Jim would generate a marginal product of 4 cakes. If cakes sell for $40 each and the ingredients for each cake cost $20, what should Michael Scott do? Group of answer choices Not hire either worker Only hire Jim Hire both Pam and Jim Only hire Pamarrow_forwardEmpirical studies on the effects of minimum wage increases in contiguous states: Find negative effects on employment for both teenagers and restaurant workers  Find no effect on employment for teenagers, but negative effects on restaurant workers  Find negative effects on employment for teenagers, but no effect for restaurant workers  Find no effects on employment for either teenagers or restaurant workersarrow_forward
- (Resource Demand and Supply) Answer each of the following questions about the labor market: a. Which economic decision-makers determine the demand for labor? What is their goal, and what decision criteria do they use in trying to reach that goal? b. Which economic decision-makers determine the supply of labor? What is their goal and what decision criteria do they use in trying to reach that goal? c. In what sense is the demand for labor a derived demand?arrow_forwardDemand and supply conditions in the market for unskilled labor are important concerns to business and government decision makers. Consider the case of a federally mandated minimum wage set above the equilibrium, or market clearing, wage level. Some of the following factors have the potential to influence the demand or quantity demanded of unskilled labor. Influences on the supply or quantity supplied may also result. Holding all else equal, describe these influences as increasing or decreasing, and indicate the direction of the resulting movement along or shift in the relevant curve(s). A) An increase in the quality of secondary education. B) A rise in welfare benefits. C) An increase in the popularity of self-service gas stations, car washes, and so on.arrow_forwardThe backward bending supply curve for labour:   depicts the decreasing labour costs involved in producing goods or services   reflects the costs relating to the hiring of employees   reflects the reaction to the minimum wage rate          shows that at a higher wage rate, the number of hours the worker is willing to work decreases - the income effect    all of the abovearrow_forward
- Suppose the demand for the Vietnamese inexpensive products from many countries over the world have increased by about 15 percent even under the Coronavirus pandemic in 2020 (from January through August). Suppose further that the demand for Vietnamese skilled workers by the Vietnamese companies producing new high-tech and advanced products have decreased by about 10 percent in 2020 compared to those in 2019. What has happened to the wage gap between Vietnamese skilled and unskilled workers in 2020? Which of the following is MOST appropriate for an answer? A. The wage gap is most likely to fall. B. It is hard to predict unambiguously how the wage gap changes given above information. C. The wage gap is most likely to rise. D. The wage gap is most likely to be little changed.  Perhaps b and c weren't the answer. Please let me know why the answer you chose is correct.arrow_forwardThe legislature in a state in the South passes strong "right-to-work" laws that make it very difficult for unions to organize workers, so the wage is always equal to the market-clearing value. Except for this difference in legislation, the northern and southern states are very similar.The initial position of a supply-and-demand graph corresponds to the initial labor market condition in the southern state before the labor union negotiated the new, higher wage for workers in the northern state.Suppose that after the wage goes up in the northern state, some workers in the northern state lose their jobs and decide to move to the southern state.  Which of the following groups are better off as a result of the union action in the northern state? (select all that apply) a) The original workers in the southern state b) Workers in the northern state employed at the union wage c) Employers in the northern state d) Workers who find new jobs in the southern statearrow_forwardHow would imposing a minimum wage below the market-clearing wage affect employment in a competitive labor market?  Group of answer choices a. Employment would be unchanged because the market forces drive the wage to a higher level.  b. Employment would decrease as some workers who are willing to work at the lower competitive wage would no longer be able to find work. there would be a shortage of labor  c. Employment would increase because setting a minimum wage below the market wage would increase the quantity of labor demanded  d. Employment would decrease because the quantity of labor supplied would decreasearrow_forward
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